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

Our roving accountant fears that clients will follow the Prime Minister's precedent, leaving us in a difficult place. 

15th Sep 2020
Partner An unnamed firm
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boris johnson
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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.

 

Replies (14)

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By Justin Bryant
15th Sep 2020 17:52

As they say, I'm surprised people are surprised when it comes to politicians, whose job is basically to lie as convincingly as possible when needs be (which is most the time). For anyone who foolishly thinks otherwise and that BJ, DC et al are acting with propriety read this hilarious recent example of their underhandedness:
https://www.theguardian.com/politics/2020/sep/15/brexit-barristers-quest...

See here what other lawyers think about this: https://www.lawgazette.co.uk/law/buckland-ill-quit-if-rule-of-law-broken...

Also hilarious that the government instructed a pupil for its prorogation of parliament advice who now seems to be on the gov panel - a year after tenancy.

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By ireallyshouldknowthisbut
16th Sep 2020 15:10

I remember during the MP's expenses scandal (how quaint compared to giving your mates multi-million contracts with not even the pretence of asking for 3rd party tenders) that the number of dodgy claims went up hugely for a good 12 months. It was a real pain dealing with them all, and explaining "you are not an MP"

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By petestar1969
16th Sep 2020 10:06

Toerags will do what toerags will do.

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Hallerud at Easter
By DJKL
16th Sep 2020 10:14

Next thing you know people will be pushing into queues in a very specific and limited way and that will be the end of the British way of life- with this lot the barbarians are not merely at the gates but instead have blown the bleeding gates off.

Whilst used by Burns in a different context, "Such a parcel o' rogues in a nation" seems somewhat apt re the present crop.

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By geoffmw1
16th Sep 2020 12:17

As in most things it is those that use adventurous methods are generally the ones who bring about discoveries and long run beneficial changes. The art is being able to draw the line between legitimate boundaries and crossing over them. I personally take pride in being extremely sceptical when I was in practice by discouraging clients from even pursuing some tax avoidance schemes including loan schemes and various others.

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By mumpin
16th Sep 2020 15:20

“…proroguing Parliament or rewriting legislation signed by the Prime Minister himself less than a year previously, is not so much abhorrent as unthinkable”

The first was necessary because Bercow went bonkers and let the opposition set the parliamentary business timetable in an attempt to thwart a decision that more of the electorate voted for than ever voted for any thing or party previously.

The second is necessary because Dublin is trying to get Brussels to break up the union.

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Replying to mumpin:
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By Justin Bryant
16th Sep 2020 17:07

Possibly, but that does not change my above basic point about them habitually lying (or being otherwise underhand) and which I note has prompted a rare intervention in the case below:

https://www.scientificamerican.com/article/scientific-american-endorses-...

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Replying to mumpin:
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By Echo761
18th Sep 2020 10:13

That is one view... but I don't agree with either of your suggested reasons.

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Replying to mumpin:
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By brianheg
21st Sep 2020 09:40

The Supreme Court disagreed with you on the first point. No help is needed from Dublin on the second point - the Tories are doing an excellent job of breaking up the Union.

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By SXGuy
17th Sep 2020 06:35

Examples are flawed.

Cummings wasn't on holiday and anyone with half a brain knows this. He travelled to Barnard Castle. The same place that just happens to have a well established glaxosmithkline where incidentally, a deal was signed two days later. No testing of eyesight going on there.

Virus back with a vengeance? Not hardly. Look at the statistics for numbers of infections/deaths over a rolling 7 day period since lockdown started, you will see at the start the two were practically the same, until testing moved from hospital admissions to general public. Death rates continued to flatten out while infections rose. Clearly obvious more infections because more people tested. Not an increase in infection rate.

Don't believe everything you are told.

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Replying to SXGuy:
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By Echo761
18th Sep 2020 10:15

I don't believe anything I am told, your reply being one of the things I don't believe.

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By JD
18th Sep 2020 10:16

If clients were held to ransom by unreasonable HMRC negotiators, then of course some clients will quite rightly stand up and not accept it, even if that means an infringement of the law.

How many of you would not do the same or would you cave into bullies?

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Replying to JD:
Hallerud at Easter
By DJKL
18th Sep 2020 10:44

I could cave in to bullies but could never cave into bullies.

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Replying to DJKL:
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By JD
18th Sep 2020 17:17

Fair point DJKL. I clearly need to be careful of spaces, as well as space at the moment

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