MPs support restrictions on unregulated agentsby
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.
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.”
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.”