A new regulator won’t help the tax profession
Concerns about how the tax profession is regulated are justified says Ray McCann but, given the complex nature of tax, he feels that a new regulatory body is not the answer.
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I'd invite anyone to point me to an unqualified unregulated tax advisor who gives advice on dodgy tax avoidance schemes.
The question is always aimed at QBEs because for some reason accountants have this opinion that if you have letters on your name you could never possibly offer bad advice.
But in my expierence it is the big firms with highly qualified accountants that promote this stuff. Let's not forget also, the average person on the street doesn't see or care if someone is a member of a professional body when they have a bad expierence, all they see is the bad apple.
The majority of expierenced unqualified accountants just want to earn a living and make sure their clients pay the correct amount of tax. They are not concerned nor do they want to be bothered with all this crafty tax avoidance nonsense.
So yes, start with the regulated sector first, but keep some perspective.
Full marks for the questioning stance that makes assertions, only to swamp them in turn with enough unanswered questions to drown them. But I can't see any kind of conclusion?
Completing/submitting a Tax Return is not a choice made entirely at the discretion of individual taxpayers, so you can't (realistically or morally) make it an action that is restricted to people with specific qualifications/membership (as per solicitors for certain documents).
So if the individual continues to be allowed to deal with their own returns, then there will always be a market for people who can 'help' them.
Whether that help is pure assistance (with software & technology) or added-value ('you could do x or y, the results being ...) or full-blown advice (right through to promoting schemes) is merely a matter of degree - and legislating to define & control those aspects will be like watching Angels holding a disco on the head of a pin!
Regulating the tax profession should not be ‘hard’. ‘Tax Agent’ is already defined in tax legislation and is a good starting point. Groups such as unpaid advisers, payroll agents, charities etc can initially be exempted but at least that gives us a framework to build on. As I suggested in the other thread after allowing for grandfathering I would have all future tax practitioners required to at least be members of a professional body like AAT or ATT. The exams are technician level and should not be a barrier to entry. I can’t see that existing QBE’s have anything to fear from being grandfathered into a new PB. Many will already undertake CPD, have PI and act in a professional manner which is compliant with PCRT etc so making this mandatory should see little change, possibly even improving their lot if they no longer have HMRC as ML supervisor. We then have a framework for complaints and weeding out the bad apples from the profession - including qualifieds that are involved in egregious tax avoidance that goes against PCRT. If someone could give me a mandate I would soon have this sorted.
Ive done my ATT exams but dont want to be supervised by ATT or AAT. I dont need to so why should I now need to?
Hi there,
I am Ex HMRC and 16 years QBE running my own firm with AML registration under HMRC and full indemnity insurance. Why am I not with a professional body? Because they are more like gentleman's clubs than professional bodies, especially where I live.
Most of my clients come to me because their accountants (which automatically makes you a tax adviser apparently) are very lazy, they miss allowances, reliefs, legitimate opportunites to save the tax payer thousands of pounds at a time.
I have been a tax adviser for years, there is a requirement to know the accounting side for CT and PT purposes amongst others and so its an easier transition. Accountants going into tax is very different. Put in a regulator if you like but dont force me to put letters after my name to make me look like billy big bananas when most cannot provide their clients with tax efficient strategies (not schemes!!!!) never mind complete accounts by the due date.
Billy big bananas! Thank you - that's made my day. As a former HMIT, I haven't got a formal tax qualification - however, I do have 10 years’ experience of working with the Creative Industry tax reliefs (4 years within HMRC and 6 years outside of HMRC) and know a huge amount (a lot) about a suite of very specialised reliefs (a little). Making me jump through some hoops for a qualification wouldn't improve my business or the service to my clients one iota. My suggestion, and this is particularly pertinent to R&D tax credits and any other repayment type situation, would be for HMRC to properly police their systems. Policing of standards has to come from the centre and the failure to properly do this because of under-resourcing or lack of will has been a conscious decision.
Why do we have to have another article on the same topic. If you read the other article you will find all the possible responses. Looks like Aweb are running out of ideas.
The last thing we need is more regulation of the profession.
What is needed is more HMRC staff, better trained, with more people dealing with the 'customers' on the sharp end.
I'd like to see all HMRC staff have to sit professional exams (say ATT level) so they have at least a tiny grasp of the actual tax law rather than IR manuals.
My business partner a chartered accountant wanted to retire a couple of years ago. We had always been supervised by HMRC, but I felt that I should really make sure that I was up to the task and took on the ATT at the age of 64, qualifying at 65. I`m glad I did as it improved my understanding and gave me confidence to continue to run the firm solo. I`m currently just starting my study of CTA at the age of 67 to build on my achievement.
If I want a medical opinion I would rather ask someone who is trained to source the correct answer rather than go by their experience. I often refer back to my training manuals when I am asked something and its with that discipline that I am happy to give advice.
With reference to insurance. Why should they be responsible for vetting the industry?
Mr Zahawi probably got very good advice but was deterred from fighting his case through the Tribunals and Court because of the (even greater) adverse publicity. HMRC would be fully aware of that and no doubt exploited it to the full. You won't find that criterion for selecting a case and settling it in the Propaganda document that is the Litigation and Settlement Strategy. Nor will you find there under the heading of collaborative working the tactic of leaking a taxpayer's affairs (Shurely shome mishtake: Ed). Known as a Reverse Hartnett.
It is interesting that the original suggestion this article refers to was proposed by a 'mentor' - added to which someone no-longer practicing as an accountant. Given the approach of some mentors, perhaps it would be more fitting to consider regulating 'mentors.'
I have no professional qualifications whatsoever. But I did spend 30-odd years in IR/HMRC (plus a few in HMT) so I'll venture the comment that this seems to perpetuate the argument that "something must be done" means "everything must be done" with very little evidence to justify the policy. (In this article, regulation not even restricted to paid-for advice.)
I commend the conclusion from a report by academics to the EU Parliament last year:
"Overall, the report highlights a lack of impact evaluations on the hard and soft law instruments currently existing in the countries analysed. Restraint from adopting further rules governing the activities of tax intermediaries and relating to disclosure requirements, without an empirical understanding of the costs and effect of those currently in place is highly recommended."
On a point of detail, that report looks at the position in Germany where tax advice is a restricted activity. Do the UK professional bodies want that? If not, just what?
https://www.europarl.europa.eu/RegData/etudes/STUD/2022/733965/IPOL_STU(2022)733965_EN.pdf
The problem isn't with us, rbw, it's with HMRC. You've only got to look at IR35 and MTD to realise how inept they are. Any European study will look at the EU as a block.
Germany has always been restrictive, it is their way of life, whereas the UK is fairly flexible. Why do you think we wanted to leave the EU?
Same thing happened 100 years ago in dentistry. Until 1921, anyone could set up and practise as a dentist without any qualifications. The 1921 Dentistry Act required that thereafter, all dentists should be qualified and registered. However, unqualified dentists who had been in practice for at least 10 years could register and continue to practise without qualifications. The last unqualified dentist (he was probably a very good dentist) retired in the 1970s. So it took 50 years to sort out. By 2073, will the tax profession be fully regulated?
I would be more amenable to regulation of the profession if an integral part of regulation was an obligation on the part of either the profession or HMRC or both to provide tax advice to poor people, micro-businesses and marginalised groups. I'm 35 years QBE and specialise in startups and micro-businesses (<£30k Turnover), and it is (or should be) criminal that such people find it (a) so incredibly difficult to register for and enter into the UK tax system and (b) almost impossible to access sound tax advice they can actually afford. The profession overall seems to think it's perfectly reasonable that people pay from 5% to 30% of their Turnover simply to comply with tax laws and pay their tax.
From what I can see none of the professional bodies discuss this aspect nor believe their members have any obligation to meet the needs of our society for accountancy knowledge. For 10 years I have followed the industry discussion in the UK about regulation and not once has there been any mention that the profession might have such an obligation. Added to this is that ALL the big stories about accounting scandals involve regulated accountants, and I don't see that regulation is going to have any benefits whatsoever beyond further enclosing knowledge which rightfully should be accessible to everyone.
Your scenario applies to most professional bodies. Those that really need stuff are never able to access easily and quickly. The NHS is about the best of the bunch.
The answer to non qualified accountants is quite simple. AML registration with HMRC is already a requirement. Why don't HMRC introduce there own CPD, Professional indemnity requirements etc. as mandatory for AML registration.
They can provide their own CPD courses . Won't be long before AML registration for ACCOUNTANTS
IS SEEN AS A MEMBERSHIP OF A PROFESSIONAL BODY.
The accountancy profession has lost its reputation because of unqualified accountants? I don't think so. How about the reputation being lost because of the actions of the Big Four Accountants that regularly get fined a pittance compared to their profits for audit failings that lead to collapse of businesses, loss of jobs and livelihoods.
Seems to me that it starts at the top. Accountancy becomes attractive to the unscrupulous only when they see the Big Four 'get away with it'
Sounds sensible - but for two factors:
1. That means making HMRC judge AND jury (which is never advisable);
2. The killer ... it would make more sense if HMRC staff were first trained to the equivalent standard and had to maintain (on an audited basis) equivalent CPD!
Whether you agree with him or not, this is a really excellent, balanced article IMO. Well done Ray