Raising standards in the tax advice market ??

Didn't find your answer?

Was this anticipated?  Think it's the first I've heard about the suggestion:

https://www.gov.uk/government/consultations/raising-standards-in-the-tax...

 

Replies (25)

Please login or register to join the discussion.

VAT
By Jason Croke
06th Mar 2024 14:53

I don't agree with the proposal to make paid tax advisors a member of a professional body....mainly because we already have the ICAEW and ATT and others and yet all of them are silent when it comes to expelling any fee paying members....you only need look to the Big 4 who drive a lot of the tax strategy work and also regularly get fined for poor audits and yet nothing happens.

If the membership bodies had teeth then I'd be more inclined to agree with the proposal, but for now, those R&D firms who know what they are doing is wrong, those umbrella set-ups and such will carry on as before.

Thanks (2)
avatar
By sjmaccounting
06th Mar 2024 15:03

Raise our standards? What about HMRC's service standards??

Thanks (10)
Replying to sjmaccounting:
avatar
By David Ex
06th Mar 2024 15:05

sjmaccounting wrote:

Raise our standards? What about HMRC's service standards??

Indeed. That thought occurred to me.

Thanks (1)
Replying to sjmaccounting:
avatar
By Tom+Cross
06th Mar 2024 16:54

I guess that the 'bar' will be set quite low, for them.

Thanks (2)
avatar
By FactChecker
06th Mar 2024 15:19

It's the first time I've heard that they're re-visiting this old chestnut (once more round the block for the old nag before the glue factory beckons), and it's a *long* read to get through on today of all days.
Coincidence over the timing, or just opportune, it certainly reeks of the old "a good day to bury bad news" approach to managing govt comms.

But aside of whether or not one agrees with either the objective or the suggested approach as a point of principle, there's the small matter of practicalities (on which it has always foundered previously).

To take but one simple example ... it is proposed that "payroll professionals" would be included within the group of tax advisers - on the basis that they "may receive or provide tax advice or offers services to third parties to assist compliance with HMRC requirements".
Well yeah, but:
a) how do you differentiate between a payroll professional providing a service where they simply process a payroll and notify the employer when the software won't let them do something ... and where their service 'advises' (aka informs) the employer when they are missing an opportunity to save money (claiming EA), and all the way on to where the service includes reviewing the mix of benefits that might be offered to employees (with an emphasis on tax efficiency rather than employee motivation)?
b) how would you control, if the proposal went ahead, the scope creep of what that individual advises on ... into areas that are not purely payroll (such as pensions)?
c) and in a sector that has operated happily without formal qualifications, let alone a PB, for around a century ... how would you solve the 'cart before the horse' issue of continuing provision of services whilst the slow process unfolds for establishment of recognised qualifications and exams (let alone the judicial reviews that would follow if someone is denied the ability to continue their trade as a respected professional).

Frankly I've neither the time nor the patience to plough through the whole document right now ... but the short early section on "Who should read this" suggests the breadth of their ambitions may exceed even the problems they had before with the depth.
That doesn't bode well for anyone hoping it will progress - but the devil will be in the details as always!

Thanks (5)
Replying to FactChecker:
paddle steamer
By DJKL
06th Mar 2024 17:10

Biggest Grandfathering Rights fudge we have ever seen. HMG are not interested as such in quality standards, they just want everything swept into nice little parcels that are someone else's problem, they have done their bit so it is now the problem for the professional bodies etc

Now, professional bodies will not likely want the great unwashed auto enrolled in their august bodies, so will there be a new body created to cater for these individuals not eligible for ICAS/ICAEW etc?

Thanks (0)
DougScott
By Dougscott
06th Mar 2024 15:21

I agree with Jason Croke, perhaps because I've come across many qualified accountants who know less about tax than I do (and I don't know a lot about a lot of tax) and I am QBE. I do however think that HMRC could supervise us QBEs like they do with MLR. No doubt the increased regulation will also increase costs for those of us who are semi-retired and just advise a few low-risk clients. And there are plenty of people out there, small charities, CABs, etc, who help people on low incomes - will they then not be able to advise on tax matters unless they are registered with professional bodies?

Thanks (2)
Replying to Dougscott:
avatar
By FactChecker
06th Mar 2024 15:26

Strangely, I did suggest something like this to HMRC nearly 15 years ago ... but they recoiled in horror.
Why? Because they'd spotted my 'hidden agenda' (or win:win as I preferred to think of it) - as in first they'd have to improve the standard/frequency of formal training in Tax amongst their own staff!

Thanks (6)
Replying to Dougscott:
avatar
By More unearned luck
06th Mar 2024 17:35

"I do however think that HMRC could supervise us QBEs like they do with MLR."

Really?

Why would anyone want an HMRC supervised agent to represent them? I think that any client of such an agent would suspect that the agent was not doing their best in defending them out of fear that the agent could loose their registration if they try too hard.

Standing up for the client's rights can be seen from the other side of the fence as "unscrupulous tax practitioners...exploit[ing] loopholes".

The language of agents exploiting loopholes (things I would call a safeguard) is also present in the current call for evidence into HMRC powers, penalties and safeguards.

This non-neutral language in two consultation documents is a giveaway. It shows how some HMRC officers react to being thwarted by a safeguard. These officers could seek revenge in having the agent's registration revoked. Fear of losing ones livelihood makes cowards of us all.

Thanks (1)
avatar
By Tax Dragon
06th Mar 2024 17:17

Are you surprised?

And, actually, don't you share the objective?

Thanks (0)
Replying to Tax Dragon:
avatar
By More unearned luck
06th Mar 2024 17:50

Yes, but not their method.

Consumer protection isn't the job of HMRC. If non-qualified agents are to be supervised it should not be by HMRC for the reason I've already given.

Thanks (1)
Replying to More unearned luck:
paddle steamer
By DJKL
06th Mar 2024 17:53

Yes- a bit too Post Office like.

Thanks (0)
Replying to More unearned luck:
avatar
By Tax Dragon
06th Mar 2024 19:26

More unearned luck wrote:

Consumer protection isn't the job of HMRC.

True, but their concern is protecting the treasury.

Thanks (1)
Replying to Tax Dragon:
avatar
By FactChecker
06th Mar 2024 22:57

Corporately? ... hopefully true; but
Individually? ... not always (humans being a variable commodity will always include, within a group of them, some with less pure attributes like job security & an easy life or even a smidgen of a power-complex).
None of which is a problem if the corporate culture truly reflects, endorses and rewards 'good behaviour' - but (in my experience) that culture has been under attack for nearly 15 years, and is now not much in evidence even at the very top.

Basically, at the risk of putting words in MUL's mouth but certainly what I 'fear', if they gain any further policing powers is ... 'Quis custodiet ipsos custodes'?

Without launching into one of my lengthy diatribes, I have actually heard (from a Senior Manager on a public platform after hostile questioning from the floor):
"If you're not with us then you're against us, and we can make life tough for you"!
And in a tri-partite meeting with Treasury and HMRC, a suggestion that Agents could be 'brought under control if we gave them Gold/Silver/Bronze ratings - so we could limit the services they can access according to that rating'!

Thanks (3)
Replying to FactChecker:
avatar
By kim.shaw-and-co.com
07th Mar 2024 00:28

FactChecker wrote:

Without launching into one of my lengthy diatribes, I have actually heard (from a Senior Manager on a public platform after hostile questioning from the floor):
"If you're not with us then you're against us, and we can make life tough for you"!
And in a tri-partite meeting with Treasury and HMRC, a suggestion that Agents could be 'brought under control if we gave them Gold/Silver/Bronze ratings - so we could limit the services they can access according to that rating'!

... indeed ... and what you can be sure of is that there will be a general let-out for the legal profession (who often cannot competently run any numbers beyond considering points of principle) under the guise of Privilege. So it's the accountancy profession, who on the whole have done the best part of HMRC's job for them for years now in helping taxpayers pay what they properly owe, who are in the firing line. Again.

Thanks (1)
Replying to kim.shaw-and-co.com:
avatar
By Tax Dragon
07th Mar 2024 09:33

Good accountants and tax agents shouldn't have anything to worry about.

Thanks (1)
Replying to Tax Dragon:
paddle steamer
By DJKL
07th Mar 2024 15:41

Not to disrespect those who lost their lives in the Holocaust, that is certainly not my intention, but the spirit of your response can be countered by the undernoted, which may be applied to lots of circumstances, such division/culling in any area of society can be a slippery slope.

"First they came for the socialists, and I did not speak out—
Because I was not a socialist.

Then they came for the trade unionists, and I did not speak out—
Because I was not a trade unionist.

Then they came for the Jews, and I did not speak out—
Because I was not a Jew.

Then they came for me—and there was no one left to speak for me."

Thanks (0)
Replying to FactChecker:
avatar
By Tax Dragon
07th Mar 2024 09:37

The official view seems to be that too little tax is being collected.

JH yesterday: "And I will provide HMRC with the resources they need to ensure everyone pays the tax they owe leading to an increase in revenue collected of over £4.5bn across the forecast period."

Thanks (0)
Replying to Tax Dragon:
avatar
By FactChecker
07th Mar 2024 12:47

I neither dispute that 'official view' nor the need (fiscally and morally) for every taxpayer to cough up the correct amount ... although I tend to view the numbers plucked out of the air by JH with the same wariness I reserve otherwise for the infamous/unquantified 'tax gap'.

But not sure how that relates to my previous post (assuming I'm following the thread correctly) with regard to the potential/likely problems if HMRC are given the power to regulate 'tax advisers' ... let alone my earlier point about the breadth of the net that is proposed in terms of which functions would be 'captured'?

My (increasingly limited) interactions with the senior bods within HMRC who wield real power (basically policy and operations) left me in no doubt that they neither trust nor wish to 'work with' the Agents over whom they already have some control - and without that foundation any further powers will not have the hoped-for outcomes.

Using one of my infamous poor analogies ... I wouldn't give the local Landowners Association the powers to licence the rights of Ramblers (although someone that oversaw both and their interactions might be productive).

Thanks (2)
Replying to FactChecker:
avatar
By Tax Dragon
07th Mar 2024 13:12

It relates insofar as the context for your previous post was protecting the treasury. HMRC is tasked with policing taxpayers. Is policing their advisors such a leap?

We might not like it. And I (believe I) understand MUL's and your point. But do you have a better suggestion? The profession hasn't rid itself of, for example, cowboy R&D practitioners. Who should take them on (out, even) if not HMRC?

Thanks (1)
Replying to Tax Dragon:
avatar
By More unearned luck
07th Mar 2024 14:30

One of the options in the consultation doc is for an independent (of HMRC, I trust) regulator. That would address my concern.

There is the bonus for us as it will reduce competition from unqualified agents.

I'm not sure that the measure will tackle the likes of R&D cowboys as the idea seems to be to restrict who can be an agent (ie someone who can act for clients in dealings with HMRC); not who can offer duff advice. At least, controlling who HMRC will interact with is a big part of the measure.

Thanks (2)
Replying to More unearned luck:
avatar
By FactChecker
07th Mar 2024 14:49

[posted response to TD here by mistake - now moved]

Thanks (0)
Replying to Tax Dragon:
avatar
By FactChecker
07th Mar 2024 14:54

As always, the devil will be in the detail ... and as I mentioned recently (maybe not in this specific thread?) I haven't yet thoroughly read all of this latest iteration of the series of consultations & proposals published over the last 5 years.

But, based on previous versions and as I see MUL has mentioned, one option is for an independent regulator (OFTA anyone?) ... which would bring other concerns (to do mainly with administrative processes and costs plus the need for things like a complaint/arbitration facility and so on), but would address my central concern here.

And I keep banging on about the loose breadth of coverage.
There should be room for a balance between regulation of those who primarily offer tax advice and act as agents for filing with HMRC - and those who do neither but are captured under the proposals (like a payroll provider - although having seen recent posts on here, I'm beginning to realise how poor the knowledge can be amongst some of those).

The R&D cowboys are just one within the long history of 'claim factories', for which I believe a different and more focused solution exists ... basically denying them the right to act like an agent in any capacity (and some moves have already started here with control over repayments and other ways to limit fraudulent behaviour).

Personally I'd be happy with much stricter rules for each of the appropriate claim areas ... starting with R&D being invalid unless notified and approved in principle in the year prior to the activities.
In my experience true R&D is planned/budgeted/resourced in advance - you don't expect to retrospectively decide that something you did last year could be thought as innovative research that led to a potential for change throughout your sector.

Thanks (2)
Replying to FactChecker:
avatar
By More unearned luck
07th Mar 2024 15:24

Restricting the unqualified compliance market could backfire on HMRC. On the assumption that unqualified agents on average charge less than qualified (and regulated) agents then their former clients will have to choose between higher fees and DIY. More DIY returns could mean more errors for HMRC to correct (or fail to detect).

Babies and bath water?

Thanks (1)
Replying to More unearned luck:
avatar
By FactChecker
07th Mar 2024 17:07

Very true ... but an organisation that doesn't even understand the cost-benefits of adequately training its own staff is unlikely to follow (as in understand) your point about DIY leading to more work for them - or, as you hint, even care about that.

From my perspective the root of the problem is the disregard held by HMRC top dogs for their own staff (who nevertheless they feel are at least 'ours' and so more reliable/controllable than those pesky independent Agents).
Couple this with a belief that has never been borne out (anywhere in history) that technology can eradicate problems of lack of resources/knowledge/procedures WITHOUT the need for first understanding what is desired and what are the problems to overcome - so that the system has a chance of delivering things that are measurable for fitness/efficiency.

But none of that is part of the armoury of those who live by short-term personal goals and without any concept of measurable deliveries in a constantly changing environment.

Sorry if this is descending into gloom rather than proposals, but it's hard to remain positive when 'self-serving' has become so prevalent ... not just within HMRC but amongst the PBs and elsewhere.

Thanks (2)