Who or what is a tax professional? And how do YOU know?
In HMRC’s guidance on the new penalties they refer to a taxpayer having taking reasonable care when they have sought and adopted the advice of a tax professional. It seems, however, that there is some confusion over the definition of a ‘tax professional. This article on the AccountingWeb web site highlights the difficulties, not just for the taxpayer but also for the professional adviser, particularly where they don’t have a formal qualification from one of the accounting profession’s institutes, e.g. Institute of Chartered Accountants in England and Wales, Chartered Institute of Taxation, etc.
According to the guidance issued by HMRC the taxpayer needs to be able to determine how competent the adviser is to provide the advice or do the work that is required. This suggests that the taxpayer needs to know as much about the tax issue in question as the adviser they are appointing. If that’s the case, why do they need a tax adviser?
One important thing to remember is that if you seek the advice of a tax adviser you make sure you provide them with the full facts. Don’t hold anything back. Don’t try to influence there answer by telling them what you think they want to hear. That way lies problems for you! The tax adviser will probably have a clause in their contract or engagement letter that requires you to provide the full facts and they can rely on what you provide to be correct.
If you don’t provide the full facts to your adviser you are probably not going to get the correct answer. The correct answer may not be the one you want, but is the one you need.
The new penalties apply to tax returns that have to be submitted after 31 March 2009.
Update – 5 September 2008
Here’s another article on AccountingWeb on this topic that is worth a read. It appears that HMRC are suggesting that using the Citizen’s Advice Bureau for tax advice will only be acceptable if the person giving the advice has knowledge of the subject.
Related posts:
