Will clients break the law in 'a very specific and limited way'?

I predict that there could be difficult times ahead for members of the profession.

It is already clear that a significant number of businesses, which will inevitably include many of our clients, have been cheating the government out of payments under the furlough scheme and the two loan schemes, the Bounce Back and Business Interruption.

HMRC has recognised this as shown by a recent Business Interruption fishing expedition reported by Rebecca Cave. Illegal activity of this kind could lead to some very tricky conversations with those clients, not to mention the National Crime Agency.

This problem could well be compounded by those who are always keen to spot an angle and decide to follow the precedent about to be set by the government.

It was bad enough to discover that the Prime Minister’s most trusted adviser, Dominic Cummings, had allegedly broken the law while enjoying a holiday in the north-east. That impression was compounded by the efforts of housing minister Robert Jenrick who, having just about dug his way out of the embarrassment of breaking the lockdown rules, proceeded to overrule civil servants and illegally award a contract to a party donor.

It has become painfully obvious that these examples led to a great deal of relatively minor lawbreaking, particularly around government attempts to protect us all from catching this deadly virus.

I fear that now that the virus is back with a vengeance, there will be far greater problems resulting from what a government minister, no less, described in Parliament as breaking the law “in a very specific and limited way”.

I must come from a different planet but the idea that a Conservative government will willfully break the law when it does not suit its purposes, whether by proroguing Parliament or rewriting legislation signed by the Prime Minister himself less than a year previously, is not so much abhorrent as unthinkable.

Frankly, if I happened to be the accountant appointed to represent Boris Johnson or UK plc, I do not think I would have any choice but to talk to my money laundering reporting officer with a view to making a formal declaration to the authorities regarding an offence that the client admitted is unlawful and will undoubtedly lead to financial gain, even given the remarkable ineptitude of those involved.

The next step from there would be a formal letter to the respective client or clients informing them that I no longer felt able to act for them, with the obvious caveat of taking care to ensure that this did not constitute tipping the criminal off.

The more immediate problem that I foresee lies with those clients whose instinct tend towards pushing the limits of legislation as far as it will go and then some.

You can just see your favourite dodgy client not only insisting that you include an expense claim in their tax return to which he or she is not entitled but then gleefully explaining that in doing so they are breaking the law “in a very specific and limited way”.

It is not yet clear whether HMRC will accept that this arrangement will constitute a reasonable excuse for under-declaring income or seeking an excessive deduction.

At a time when so many clients are struggling to survive and there is a serious risk of another lockdown for many businesses in the very near future, the last thing that any accountant needs is an additional temptation to a beleaguered client who can see no way out of an impossible financial dilemma short of perpetrating some kind of fraud.

Maybe I am missing the point but when every living Prime Minister, including those from his own party are denouncing what appears to be outrageous behaviour by the incumbent, you have to hope that the umpteenth U-turn is just around the corner.