Editor AccountingWEB
Share this content
Outdoor view of Big Ben and Westmisnter bridge in London

MPs support restrictions on unregulated agents


Three-quarters (78%) of 103 MPs are in favour of introducing compulsory membership of a professional body for anyone offering paid-for tax and accountancy services, according to a new survey by the AAT. 

17th May 2021
Editor AccountingWEB
Share this content

The government’s current consultation into compulsory professional indemnity insurance (PII) for all tax advisers has sparked a larger debate within the profession on unregulated agents. 

AAT is behind the campaign after describing the government’s mandatory PII plans as “inadequate”. It has launched a crusade against unregulated agents, urging for there to be a legal requirement for anyone offering paid-for tax advice to be a member of a professional body. 

MPs vote against unregulated agents

AAT has taken its campaign to Westminster and in a YouGov poll has found that 78% of 103 MPs back compulsory membership of a professional body for anyone offering paid-for tax and accountancy services. 

The proposal was more popular with 85% of the Labour MPs surveyed, although 75% of Conservative MPs also agreed with the professional body. Only 6% of MPs disagreed with the proposals. 

The YouGov results echo similar findings from recent SME research from PracticeWeb on whether ‘accountant’ should be a protected term in the UK. 

The research found that 75% of SME owners believed the title ‘accountant’ was already legally protected in the UK, while only 11% knew that anyone can use the term regardless of qualification. 

Adam Harper, AAT’s director of professional standards and policy, wants the result of the MP survey to translate into action, and for Treasury Ministers to “listen to their colleagues and legislate accordingly”.

“The government is proposing to make the UK’s audit sector the most tightly regulated in the world. Yet in stark contrast there is currently no requirement for accountants and tax advisers to be appropriately qualified or to be a member of a professional body, even though unregulated tax agents account for two-thirds of all agent-related complaints to HMRC. This can leave individuals and businesses open to significant financial problems.” 

Harper added, “This long overdue change would put accountants on a par with nurses, architects and solicitors – who all have to be a member of their respective professional bodies – whilst benefitting individual taxpayers and businesses as well as the UK economy as a whole.” 

Mystery shoppers

Unregulated agents have always been a hotly contested issue within the profession, but the friction intensified over the last couple of years as the government has explored ways of raising standards within the profession. 

In the compulsory PII consultation released on tax day, the financial secretary to the Treasury Jesse Norman blamed “a minority of incompetent, unprofessional and malicious advisers” for undermining the functioning of the tax advice market. The document highlighted that there are around 21,000 unaffiliated advisers and noted that they're less likely to hold professional indemnity insurance. 

While professional bodies like the AAT are disappointed that HMRC isn’t clamping down hard enough, not everyone sees HMRC’s proposals as inadequate or given unregulated agents a free ride. 

Eagle-eyed AccountingWEB readers have spotted a major variance in tone from the tax department’s Agent Update to the Employer Bulletin on the PII consultation that does indicate a tougher stance. 

In contrast to April’s bi-monthly Agent Update that invited views on the compulsory PII consultation, the Employer Bulletin considerably expanded the scope. 

HMRC wants to hear employers' experiences when dealing with tax advisers to help them “decide the best way forward”. As part of the consultation, HMRC wants to hear thoughts on:

  • What checks the business carries out when engaging a tax adviser - do they check whether they are insured?
  • Their experience (if any) of making claims or complaints against a tax adviser for bad advice that you may have received.
  • The government’s ambition is for HMRC to share information about the adviser with the client digitally.

Warning users of “mystery shoppers”, AccountingWEB user Hugo Fair said: “If ever you doubted that HMRC wants to 'police' your operations (in this case as a tax adviser), then think again.”

Replies (15)

Please login or register to join the discussion.

Mark Lee 2017
By Mark Lee
17th May 2021 18:50

Hopefully something has changed - but I think it will need to be driven by HMRC and will focus on who can act for clients when dealing with HMRC.

Some years ago, during the Coalition Government, when Vince Cable was Business Secretary, he offered to introduce new laws to restrict use of the word 'accountant'. Any change was to be conditional upon him being satisfied that it would be in the public interest. The professional bodies sought to collate evidence about poor advice etc from unqualified accountants. Sadly no one could prove this was any worse than the poor advice being given by qualified accountants.

I have written before about how restricting use of the word 'accountant' could well backfire; as in, be careful what you wish for.

But restricting who can provide tax advice and engage with HMRC is a much more realistic target.

I say this whilst also admitting that I chair the Tax Advice Network, the UK's largest network of independent tax advisers - not all of whom have a professional qualification. However, they all satisfy our membership criteria - including those who were time barred from exams or who secured their tax training whilst working for HMRC

Thanks (1)
Replying to bookmarklee:
By Justin Bryant
18th May 2021 09:18

Mark, I have seen people on your so-called approved list causing all kinds of trouble, so I don't think that's much of a Kitemark so to speak! In particular, do you monitor your list for anyone subject to regulatory disapproval etc. and chuck them off as necessary? If not, why not?

Thanks (1)
By memyself-eye
17th May 2021 19:56

well, accountancy just got a lot more expensive.
Unrepresented tax payers will become even more unrepresented - while they can and when they can't the black economy beckons.
Not that I care too much - i've quit.

Thanks (1)
By John Wheeley
18th May 2021 09:36

Why not have compulsory membership of a professional body for politicians ? How much training do politicians have ?

Thanks (4)
By ireallyshouldknowthisbut
18th May 2021 09:41

it seems quite simple to restrict HMRC access as agents to those who are members of the relevant bodies. Those who practice within the guidelines of qualified members as the vast majority of QBE's do, already have to pay HMRC for money laundering registration so it should be little odds to have to pay a regulating body instead.

Of course what you wont stop is bookkeeper "playing accountant" by completing the tax payer's return on the tax payer's log ins, but overall its got to be a step forward.

Thanks (1)
By Paul Crowley
18th May 2021 10:03

He who pays for the poll gets the desired response.
The real crooks selling tax evasion (avoidance that fails is no different to evasion) schemes would be unaffected.
They sell schemes
They do not represent clients

Thanks (1)
By Paul Crowley
18th May 2021 10:10

As agents are regulated
Time to blame HMRC if their regulation is inadequate

Thanks (2)
By lh3f9764bg1g
18th May 2021 10:22

Where's the evidence of this being a problem? Let's face it . . . . . we can all see where the cartel has led us - were there any unregulated practitioners involved in the Carillion fiasco? How many millions or, indeed, billions of innocent parties money has to be wasted and, in fact in many cases, defrauded before the regulated are actually regulated? Talk about the emperor's new clothes! Physician heal thyself!

Thanks (1)
Replying to lh3f9764bg1g:
By Hugo Fair
18th May 2021 23:37

Prithee sir, dost thou forget to genuflect afore your betters?

Thanks (0)
By jon_griffey
18th May 2021 10:26

This is long, long overdue. It's not unreasonable for the public to expect that their accountants have had some basic test of competence during their career and have PI, CPD and someone to complain to when things go wrong. By all means grandfather in existing unqualifieds, but in this day and age anyone new coming into the profession should be required to be a member of a professional body. Qualifications like AAT/ATT are really not difficult. Another issue, that does not seem to get much mention is that a practising accountant can get struck off, imprisoned, bankrupted (we all know some of these) and there is nothing stopping them from carrying on practising as if nothing had happened - this is completely untenable.

Thanks (2)
By Jackie in Wiltshire
18th May 2021 10:53

I see bookkeepers are on Annexe C list.

I’m an agent bookkeeper/accountant with a small “a”, having passed AAT exams 30 years ago. I am not a member of any professional body. I worked in various industries for 20 years then spent 10 years working in a CIOT practice, before setting up my own practice 7 years ago. I deal with Sole Traders and Ltd. I do VAT/CIS/PAYE/monthly Management Accounts/draft year end Management Accounts (all fully reconciled).

I work closely with a medium size firm of Chartered Accountants who deal with SATRs, Statutory Accounts, CT, other tax issues, and tax planning. They rarely make journal adjustments to my draft year-end figures.

How will the hundreds of other unregulated agent bookkeepers in a similar position be able to continue working if they will be required to be a member of a professional body?

Thanks (1)
18th May 2021 12:47

We are living in the 'self assessment' age, have a go and do it yourself. All the information you need is available online at the HMRC web site, just use the atrocious search engine!

Should all HMRC's 'customers' therefore belong to a relevant body?

Thanks (1)
By Mr J Andrews
18th May 2021 14:19

Would these be the same MPs involved in the 2009 expenses scandal where everthing fom the Sunday church collection to duck houses was claimed not to mention the 'second homes 'and 'flipping' fiascos. Were their agents members of professional bodies or not ?
Jesse Norman would do well to dig out the incompetency within the so called regulated market rather than just discriminate against the [ in her words ] ' minority'

Thanks (0)
Replying to Mr J Andrews:
By Hugo Fair
18th May 2021 23:34

You may find Jesse Norman more receptive if you refer to his (rather than her) words ... but it would indeed be interesting to know which MPs used an agent and which self-completed.

Thanks (1)
By Hugo Fair
18th May 2021 23:49

As so often the case nowadays the waters are being (deliberately?) muddied here.
The consultation talks about the 'tax adviser' market, whilst a lot of the press (including this site) and the vested interests of the accounting professional bodies have taken this to be all about regulating Accountants.

Back in the real world there are plenty of Accountants (even if you restrict the label to those who are qualified) who aren't in practice and don't perform any Agent duties - and similarly there are plenty (quite possibly tens of thousands) of people who can't even spell accountancy but provide specialist tax advice on a daily basis ... which directly affects what and how figures are reported to HMRC even though the 'customer' pushes the button.
And this latter group aren't unknowledgeable or shady - indeed quite the opposite as they are professionals in their own right (in Employment, Payroll, Pensions, Property and many other fields).

So can we please get HMRC to come clean about what they are actually trying to tackle?

Thanks (2)