How should the tax profession be regulated? | accountingweb
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How should the tax profession be regulated?

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Mark Lee, founder of the Tax Advice Network, thinks the best way to regulate the tax profession in the UK is with a new regulatory-focused body.

31st Jan 2023
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The tax professional bodies have pushed for the newly revised HMRC standard for agents to go further so tax agents are regulated, in order to increase public confidence and ensure the consumer protection regulatory gap is met. 

However, questions remain on exactly how this regulation should operate.

Rebecca Cave spoke to Mark Lee, founder of the Tax Advice Network, about how regulation of the tax profession might work in the UK.

Why is regulation important? 

I believe the perceived damage to our professional credibility is caused largely by bad actors. Some are intentionally deceptive, but some are simply naive people giving duff, dangerous or incomplete advice. Most are unqualified, others may hold a professional qualification but are not as up to date with law and practice as they might think. 

Related to that issue is the need to protect consumers so that they don’t get suckered into following bad advice. HMRC refers to these people as those “incompetent, unprofessional and malicious advisers whose activities harm their clients, reduce public revenue and undermine the functioning of the tax advice market”. 

The unexpectedly wide range and typical characteristics of unaffiliated tax agents were addressed by the Kanter research commissioned by HMRC in 2021.

A fair summary of HMRC’s position is to drive out unethical practice among rogue tax advisers. This includes those setting up as accountants without any experience as well as those selling tax schemes. The government also wants to raise standards and provide taxpayers with greater protection – although, to date, their efforts to find a solution seem to have been misconceived. 

At the heart of the issue seems to be the way in which unqualified and unaffiliated tax agents can promote and provide tax advice (in all its forms) without any form of supervision or regulation.

Regulate the adviser or the function? 

The regulation that exists for the tax profession appears to be focused on the function – tax avoidance schemes and the promoters of those schemes, rather than advisers who provide tax services more broadly.

If the tax adviser is to be regulated, how do you define “tax adviser”?

The range of such people and businesses is summarised in the standard for agents. There’s a more comprehensive list in this document.

What conditions should the tax adviser meet to be included on the register of regulated advisers? 

Firstly, they should be required to follow the Professional Conduct in Relation to Taxation (PCRT) standard, or HMRC’s standard for agents. The PCRT has the advantage of having been prepared independently of HMRC, so in effect the professional bodies who drew up the PCRT set the rules for tax adviser behaviour.

I do not support the notion that professional qualifications are required for effective regulation, however I believe an annual continuing professional development (CPD) requirement should apply, monitored by the regulator. 

Having professional indemnity insurance (PII) should be a necessary requirement for a regulated tax adviser, but PII is insufficient on its own to provide the protection and benefits sought by those who advocate regulation.

Should HMRC be required to abide by the same standards as regulated tax advisers? 

Broadly yes of course, regarding truth and transparency for example. But some elements of PCRT (and of HMRC standard for agents) would need to be adapted to employees of a public body (HMRC) as distinct from advisers engaged by taxpayers. 

Which body should decide if the regulation conditions have been broken and what sanctions should apply? 

The regulatory body would need to monitor adherence to the regulatory conditions and apply sanctions, and perhaps the Tax Disciplinary Board (TDB) could have a role. 

Which body should act as the regulator?

The introduction of a wider regulatory framework to address the concerns would require one of the following approaches: 

  • an existing professional body to expand and regulate non-members
  • HMRC to take the lead in such regulation
  • new independent regulator akin to the Financial Conduct Authority (FCA) or the Financial Reporting Council (FRC)
  • the FCA or FRC to regulate tax agents
  • create a new independent regulatory body focused on the unqualified tax agents.

Given the nature of the challenge, I think it unlikely that any of the existing professional bodies would want to develop a solution. This is because to do so would confuse the marketplace and thus devalue and disadvantage their “real” members. However, I understand that some of the smaller professional bodies are apparently considering this option. 

Equally, I am sure that HMRC does not have the resources or ambition to expand its current money laundering regulation of bookkeepers, accountants and tax advisers who are not authorised by a professional body. 

Relying on the FCA or the FRC would almost certainly defer any real action for some years while the body develops a workable approach for dealing with unqualified tax agents. Indeed, the FRC will shortly be replaced by the Audit, Reporting and Governance Authority (ARGA). 

There is also the issue that not all of the existing professional bodies set exams, have a formal complaints process or operate any form of regulation of their members. And those that do really don’t want to become subservient to a new uber-regulator that creates additional burdens on qualified accountants and tax advisers. 

What is your proposed solution?

In my view, the only viable solution is a new tax regulatory-focused body. It is unrealistic to expect tax-focused advisers and agents to join an accounting-focused body. But it is hard to see how any of the current accounting or tax bodies could risk the ire of their members by offering some form of affiliation for unqualified tax agents.

I am aware of an initiative to create a new regulatory body for otherwise unaffiliated tax advisers. I can’t say much at this stage but if the concept gains at least the tacit support of HMRC it could provide the solution that many of us, including HMRC, seek without creating any additional burdens on those who already belong to a professional body. 

The new body, if it proceeds, would close a gap and thus enable HMRC to oblige anyone who requires access to their portal, other than for their own personal use, or anyone advising or providing a product or service to anyone using the portal, to be either a member of a recognised professional body or of a recognised regulatory body.

Replies (68)

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By Hugo Fair
31st Jan 2023 16:43

An interesting overview of the machinations going on (mostly behind closed doors) regarding a potential Regulator of any new framework that results from the consultations.

But I always feel that the two most basic issues, in practical terms, are left on the side-lines (or at least remain unspoken):
1. Defining who is a “tax adviser” - which is mentioned above but seems to be going around in circles;
2. Defining which activities require regulation - including the distinctions between informative & advisory discussions, actions merely recommended and those performed, and so on.

If it's not 100% clear who are the actors and for which actions, then policing becomes opinion (not a good or effective look).

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Replying to Hugo Fair:
By jon_griffey
01st Feb 2023 11:01

This is surely not beyond the wit of man. In financial services, 'investment advice' seems to be defined well enough, so 'tax advice' really shouldn't be difficult. I understand that some activities may be a bit of a grey area but at the very least, it should be easy to catch within regulation anyone offering paid tax advice.

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Replying to jon_griffey:
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By psimonparsons
01st Feb 2023 12:17

So far it appears to be beyond the wit of HMRC and the professions. What is tax advice as so far it could consist of many things. And what is to be controlled?

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Replying to jon_griffey:
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By Hugo Fair
01st Feb 2023 12:26

I agree, in principle.

However all the evidence to-date is that answering my two questions is still beyond the capabilities (or will?) of those trying to set-up any new system.

As a simple example:
What about a payroll bureau who offer support as part of their service.
At what point does guidance (say that a particular set of values should be put in specific boxes in the software) go from being 'software support' to 'tax advice' ... especially when explaining the impact of alternative options (and how to make corrections without incurring penalties)?

No-one I've met in that sector considers themselves to be a 'tax adviser', but I've met senior people in HMRC who say they are "because they are giving advice on matters that will affect the taxpayer's position and amount of tax due".

EDIT: just seen that my response has crossed with those of psimonparsons, who really does know what he's talking about - and has tried to get HMRC to see the light on this (and other topics) over the years!

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Replying to Hugo Fair:
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By psimonparsons
01st Feb 2023 12:26

Exactly Hugo. After attending all of the consultation meetings on this at various HMRC office and government buildings, the definition of tax advice is not clear. And who are these professionals involved and what are they actually doing?

Its is often inferred that these may be accountants! What about lawyers, employers, payroll, bookkeepers, the helpful guy at the pub and even missionaries or church workers attempting to help someone out of difficulties.

The bias of what is tax advise appears to be the main stumbling block.

And then the other question is what for? Now there are clearly scammers and exploitative practices operated by some in the tax advice market place, but is that the majority or a very small group of wise boys out for a quick buck?

Tax Advice does not equal accountant. And some potential tax advice doe not relate to professional body regulatory activity.

One of the main tax calculation and collection activities - Payroll - is not covered by any regulatory professional body. Although there is the Chartered Institute of Payroll Professionals, they do not act as a regulatory body. And what about those who develop the software solutions used within the profession. What means exists to regulate them.

But then again - why is regulation needed.

Another angle maybe to tackle the elements of concern and regulate those.

The Tax Advice label is far to broad and so far no one appears to be able to actually define what it actually means. Some things may be clear, but other areas are far from it.

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Replying to psimonparsons:
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By johnjenkins
01st Feb 2023 12:30

So (I know I'm going overboard with this) two friends talking, and one says "you need a pension mate and you get tax relief", could be construed as giving "tax advice".

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Replying to psimonparsons:
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By DJKL
01st Feb 2023 14:45

Yes, why is regulation needed?

Sure there are snake oil salesmen and incompetents but is the issue so pervasive that an entire new branch of regulation is needed? If so HMRC et al need to prove the case, that the nasty cure is required given the seriousness of the illness, or is this merely another MTD?

Also what about in house, I have one employment where I do all the accounts and tax compliance (have done virtually since I joined in 1999) and another employment is one of my former clients where I do precisely what I did for them when I was also in practice up to 2019 but now I am in an employed position this avoids all issues like ML/PII/CPD etc. Are employees/in house tax teams to be regulated?

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By AndyC555
31st Jan 2023 17:43

In order to be a tax advisor, I think you need to be as competent and knowledgeable as the average staff member of HMRC.

Oh, wait........

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Replying to AndyC555:
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By Casterbridge Hardy LLP
01st Feb 2023 10:19

That is a pretty low standard!

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Replying to AndyC555:
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By ColA
01st Feb 2023 10:38

My thoughts entirely.
Over the years when dealing directly with HMRC & formerly HMIT. I undoubtedly knew more than the average desk clerk I encountered.
One exception in the past decade has been a VAT Inspector covering the South East with whom I corresponded twice on two independent & unconnected matters - practical, knowledgeable & completely down to earth - complete contrast to many ‘jobsworths’ who blunder round their manuals ineffectively.

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Replying to AndyC555:
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By HMRC Escapee
01st Feb 2023 11:26

... sadly it's a radpidly declining standard and I speak as a former VAT Practitioner of some 32 years. You can probably attribute that mainly to the Treasury, who prioritise staff budget savings over safeguarding the various taxes and providing any quality of service.

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By SXGuy
31st Jan 2023 19:38

I've been in practice now for well over 20 years and the majority of my work is tax returns.

I think I've gained enough expierence to know what needs to be put on a tax return and what shouldn't.

I don't really advise anyone of any tax schemes etc, so what exactly would a body do in terms of regulating me?

Can't help but think it would just end up being an additional cost.

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By Postingcomments
31st Jan 2023 19:51

I have a couple of reasons to wonder if Mark is struggling to make sufficient money in the various roles he has been trying to carve out for himself since ceasing to be a tax adviser himself.

Maybe he now fancies a (well paid) position of some sort in yet another overhead cost for the taxpayer?

Either way, I think it could be dangerous to demand another layer of regulation - as what is to stop that regulator acting as some kind of police re interpretations of the law?

This increasing "Govern me harder, Daddy" attitude won't end well. I don't even think it is always promoted by people who actually want more regulations, but by people who want a place for themselves at the big tap of government spending. It's certainly easier than setting up an actual business that produces something.

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Replying to Postingcomments:
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By johnjenkins
01st Feb 2023 10:33

Mark, I'm afraid you've let yourself down on this post and I'm glad i'm not the only one that thinks so.
Let's take it a stage further. Aren't HMRC the "regulators of "tax advisors" (whatever they are). So what you are asking for is another body to do HMRC's job? Then we will have two incompetent bodies and that's without our own.

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Replying to Postingcomments:
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By Mark Lee
09th Feb 2023 17:42

Thanks(?) but this is Rebecca's post, not mine. Her questions to me were informed partly by an article I recently wrote for Taxation magazine. That was a response and commentary on recent articles published on related topics.

I see a lot of people opining on the issue of regulation seemingly oblivious to what HMRC and the Government are doing. I'm NOT calling for increased regulation. Simply speculating as to the 'direction of travel'.

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Replying to Postingcomments:
Mark Lee headshot 2023
By Mark Lee
09th Feb 2023 17:42

Thanks(?) but this is Rebecca's post, not mine. Her questions to me were informed partly by an article I recently wrote for Taxation magazine. That was a response and commentary on recent articles published on related topics.

I see a lot of people opining on the issue of regulation seemingly oblivious to what HMRC and the Government are doing. I'm NOT calling for increased regulation. Simply speculating as to the 'direction of travel'.

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Replying to Postingcomments:
Mark Lee headshot 2023
By Mark Lee
09th Feb 2023 17:44

Thanks(?) but this is Rebecca's post, not mine. Her questions to me were informed partly by an article I recently wrote for Taxation magazine. That was a response and commentary on recent articles published on related topics.

I see a lot of people opining on the issue of regulation seemingly oblivious to what HMRC and the Government are doing. I'm NOT calling for increased regulation. Simply speculating as to the 'direction of travel'.

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By rememberscarborough
01st Feb 2023 10:16

Just watched a film called The Bank of Dave and whilst that's about banking it could equally apply to the tax and accounting profession. All these proposed new regulations being carried out by exactly the same people who have made such a pig's ear of the current tax system.

Get the feeling these "experts" are just tweaking a system to make sure they keep their noses further in the trough...

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Replying to rememberscarborough:
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By johnjenkins
01st Feb 2023 10:34

Brilliant film.

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Replying to rememberscarborough:
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By Postingcomments
01st Feb 2023 11:11

Big companies campaign governments for regs as they put up barriers to entry, meanning no new competition.

Even in our profession, there are loads of rules and regs. Manageable as a 1 man band, though they are increasing every year,but go further and you soon get into huge expensive headaches like employment law, IT systems (that feckless staff will try to get infected), extra regulatory admin etc

Soon, the high street firms won't exist and clients will be pushed to these costly private equity owned firms that are being created. The "partner" you talk to isn't the boss, they care about nothing but their billing targets and the high fees you'll pay don't go towards quality but gets siphoned off by the faceless owners.

Mind, the government has accelerated its trashing of OMBs over the past 3 years, so soon maybe virtually everyone will be an employee on PAYE anyway. Just where the government and companies want you - dependent, cowed and lacking in agency.

Wow. That must have been a strong coffee I had!

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Replying to Postingcomments:
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By johnjenkins
01st Feb 2023 11:57

OMB's, in whatever guise, have been the target of HMRC since Gordon Brown decided everybody should be on PAYE. I've even suggested that we should all be given jobs and pocket money to solve all the tax and employment status problems.

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By TB93
01st Feb 2023 10:17

I'm surprised to see that only 18% held qualifications with recognised accounting bodies. But then again I have seen Facebook groups where these advisers are asking eachother how to advise clients on the most basic of queries.

I wouldn't argue with some level of regulation overall. Do we really want somebody walking off the street advertising as an accountant (as they legally can do so) without adequate knowledge?

This isn't a dig at those QBE.

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Replying to TB93:
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By leekris
02nd Feb 2023 11:19

I have to say as a QBE myself (planning to retire soon) some of the most shocking instances of poor work by the previous agent have come from firms of chartered accountants. One I recall was a sole-director company where the submitted accounts omitted to show the company bank account. I imagine they just don't want to do small client jobs even at a bumped up price compared to what a small office local QBE can do. The small business pays a lot more but doesn't necessarily get the same level of service.

I won't get started on the ongoing issues with auditing failures.

In a different field psychologist Carl Rogers maintained that in his field the percentage of what I think he called 'charlatans' was the same whatever the level of qualification, or not. I think there's something in that.

This isn't a dig at qualified individuals either, in fact I have one firm of CA's I work with on a client who I think are exemplary, but it seems to be however much regulation there is in a discipline, its effectiveness is to some degree illusory.

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Replying to leekris:
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By should_be_working
02nd Feb 2023 11:56

leekris wrote:

In a different field psychologist Carl Rogers maintained that in his field the percentage of what I think he called 'charlatans' was the same whatever the level of qualification, or not. I think there's something in that.

This isn't a dig at qualified individuals either, in fact I have one firm of CA's I work with on a client who I think are exemplary, but it seems to be however much regulation there is in a discipline, its effectiveness is to some degree illusory.

There's an analogy with driving here. Just think of all the bad driving you see on the roads ... and then consider that most of those drivers will have passed a driving test at some point.

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By Moonbeam
01st Feb 2023 10:28

The elephant in the room is the lack of competence displayed by HMRC themselves. They are right to want better tax advisers. However they do nothing about the many businesses working in eg the R & D area who take commission up front for advice that is clearly wrong.
Many of us wonder whether they do anything about the money laundering notifications we have to send when we suspect money laundering issues.
It's clear to me that there are a number of accountants who are happy to fiddle tax returns for a small fee. When do they and their clients get investigated?
Then there are the many HMRC systems that don't work properly that require tax agents to waste hours of time querying data which is plain wrong.
For as long as HMRC fail to get their own house in order I seriously doubt whether they're the right people to tell the rest of us what to do.

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By JD
01st Feb 2023 10:39

One has to consider why the solution to every ill (in every area of government) seems to be layering more regulation on those that comply, increasing costs, reducing productivity, and removing the availability of a service to those least able to afford it, rather than directly tackling those elements it is concerned about.

Surely the correct starting point is to simplify legislation in the first place, for HMRC to put itself in a position where is it able to deal with the rogue elements (by retaining sufficient appropriately skilled people), making full use of the information it already has such as that via NCA, and to stop being blind to the limitations of digitisation. When it has its own house in order, then consideration of any regulatory framework may be appropriate.

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Replying to JD:
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By should_be_working
02nd Feb 2023 11:59

JD wrote:

One has to consider why the solution to every ill (in every area of government) seems to be layering more regulation on those that comply, increasing costs, reducing productivity, and removing the availability of a service to those least able to afford it, rather than directly tackling those elements it is concerned about.

It's Maslow's Hammer, except the 'hammer' for politicians is more laws and taxes.

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By jon_griffey
01st Feb 2023 10:52

In my view the answer is straightforward. Anybody undertaking paid tax advice needs be a member of a professional body by law. Existing unqualifieds are grandfathered into a new body, which will eventually disappear as they all retire etc. By professional body I would include technician levels such as AAT or ATT. These are not difficult exams and if you can't pass them then you shouldn't be let loose on an unsuspecting public. This will also focus the minds on errant advisers that if you get struck off, say for dishonesty or incompetence etc then you will be losing your livelihood - not simply carrying on regardless as they do now. An unregulated tax profession is untenable in this day and age. Also HMRC shouldn't be wasting its resources reinventing the wheel with its Standard for Agents when we have PCRT enforced by the professional bodies.

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Replying to jon_griffey:
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By johnjenkins
01st Feb 2023 11:03

Jon, I think you have a rather blinkered outlook of business. I, and no doubt many others have clients with no qualifications but through experience and hard work have become highly skilled in their own industry and probably would fail exams as we all know theory is somewhat different to practice.

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Replying to johnjenkins:
By jon_griffey
01st Feb 2023 15:08

johnjenkins wrote:

Jon, I think you have a rather blinkered outlook of business. I, and no doubt many others have clients with no qualifications but through experience and hard work have become highly skilled in their own industry and probably would fail exams as we all know theory is somewhat different to practice.

That is a fair point, but I am talking of exams like AAT/ATT which are not that difficult and should not present a barrier to entry. If you go to a doctor, dentist or solicitor would you not expect them to have passed exams?

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Replying to jon_griffey:
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By johnjenkins
02nd Feb 2023 09:41

You also have a fair point (what's this the aweb appreciation society), however some nurses, dental assistants, and legal secretaries could do the job just as well. I have always said that theory and practice can be miles apart. If you treat exams as guide lines rather than the bee all and end all, then you won't need this constant controversy between quals and unquals. There is a place for all.

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Replying to jon_griffey:
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By FirstTab
01st Feb 2023 12:57

Note sure about AAT for tax. ATT agreee.

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Replying to FirstTab:
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By mumpin
01st Feb 2023 14:17

I've never met anyone who has failed AAT.
ATT is tough and was designed to make the student competent in general taxation.

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By Self-Employed and Happy
01st Feb 2023 11:15

I'm not sure how people can even contemplate a new regulatory body when HMRC continues its daily work of incompetence.

Here's an idea...why don't you get business analysts and accountants to assess the efficiency of HMRC and rebuild it from scratch, rather than leave it to civil servants who care only for their career progression without actually having a thought as to how decisions made affect tax payers and advisors.

Until HMRC is an effective, efficient body for the collection of tax there is no point in bothering to look at other areas, I'd wager good money that the abomination that is HMRC actually contributes to the tax gap.

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Replying to Self-Employed and Happy:
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By Red1960
01st Feb 2023 13:07

The problem is that MTD is the complete restructuring and re-thinking of the entire tax system from basic principles that you speak of.

It wasn't dreamt up by civil servants but by external firms and endless self appointed consultants and advisers who all have a financial interest in the outcome lobbying the relevant ministers, MPs and private secrataries intensely.

Any reasonable person would normally question whether or not there is a conflict of interest there.

I don't even think I we need to ask the question "How did they get civil servants to agree?" We all know the answer.

Unfortunately that is increasingly the way that things are done in this culture.

We have replaced notions of competence, responsibility and ethics with cash, narcissism and self interest and handling the fall out with optics and PR and it is failing.

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By Michael C Feltham
01st Feb 2023 11:20

A majority of accountants, including ICAEW, ACCA, etc are either sole practitioners or two partner firms; classic examples of SMSPs (Small and Medium Sized Practitioners

We are already struggling under burdensome compliance demands.

AML, (Which WE have to pay for! despite this being the responsibility of Government!); CPD, which, again, we have to pay for.

Annual compliance visits from our professional bodies.

Etc.

The very last thing an already struggling profession needs, right now, is another layer of compliance!

Mr Lee is clearly unaware of the singular facts that circa 49% of UK GDP is generated by SMEs; who also employ circa 47% of private sector workers.

The UK business population are mainly SMEs; and that a vast majority are sole traders.

Who are struggling against an economic meltdown, insane interest rates; facing ongoing hostile attack from Government and HMRC over the looming disaster of full blown MTD and if all this were not enough, the abolition of Basis Periods, which will mean having to pay perhaps 150% ++ tax in One Year.

Meantime, the Westminster Weasels, are grasping in the dark, by raising various direct and indirect taxes to try and extricate themselves and the country from vast sovereign risk borrowing and debt service obligations that they the political class have, amassed through their own profligacy and utter incompetence.

The result being accountants and advisers will be struggling to keep changing tax computations. Let alone understand new rules.

Mr Lee is living in a dream World....

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Replying to Michael C Feltham:
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By paul.benny
01st Feb 2023 17:34

Michael C Feltham wrote:

A majority of accountants, including ICAEW, ACCA, etc are either sole practitioners or two partner firms;

Not quite. For ICAEW, ICAS and ACCA only about a quarter of members work in practice. Include CIMA and the other bodies, and it falls to a fifth.

(source: https://www.frc.org.uk/auditors/professional-oversight/key-facts-and-tre...)

I could not locate robust data about employment by size of firm; other data which probably includes non-members might support about half members in practice being in small firms.

Michael C Feltham wrote:
circa 49% of UK GDP is generated by SMEs

Again, not quite. I think you may be referring to turnover, where SMEs do indeed generate about half the revenue of all private sector business. But that's not remotely the same as GDP.

(source: https://www.statista.com/statistics/676741/uk-business-turnover-by-size)

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Replying to Michael C Feltham:
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By Mark Lee
09th Feb 2023 18:09

Hmm. I am confused as to how Michael C Feltham could reach those conclusions by reference to what I have said here, rather than what he seems to have assumed I might have said.

I TOTALLY agree we do not need another level of compliance. And I have not suggested there be one.

On the question of SME's I frequently point out (to accountants as much as anyone else) that SMEs constitute over 99.8% of all UK businesses - though I'm not sure why this is relevant to the debate in question.

I am also well aware that a majority of accountants (whether qualified or not) operate either as sole practitioners or two partner firms.

The issue that prompted my interview with Rebecca was the calls (from HMRC and the Government) for increased regulation of the profession.

Like you Michael, I see NO justification for further regulation of those who already belong to professional bodies. And I thought that was clear from my answers to Rebecca's questions.

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Morph
By kevinringer
01st Feb 2023 12:03

"Should HMRC be required to abide by the same standards as regulated tax advisers? "

I read "standards" as including knowledge. HMRC would not meet this standard, seriously. Agents and taxpayers are expect to be competent across a range of taxes (income tax, CGT, CIS, PAYE, NI, VAT, IHT etc). Joe the Plumber is expected to have working competency of VAT and CIS as a minimum. But HMRC staff only ever deal with just one tax, therefore HMRC staff would never meet the standards of agents, or indeed, of Joe the Plumber.

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By wamstax
01st Feb 2023 12:20

I am a tax adviser, I am not an accountant - even though I achieved 98% in "accountancy" exams many years ago when undertaking HMRC Inspector training and went on to examine accounts for a good part of the 41 years that I worked in HMRC. The 2% reduction was for untidiness!!!. I also passed the HMRC Final Training course (with decent results) before becoming a Fraud Investigator in the old HMRC Enquiry Branch (FIS predecessor) and moving on to being a local tax office District Inspector dealing with all types of individuals; partnerships and companies (both Close and public) with multi million dealings. You can see my full profile on my website - www.wamstaxltd.com - or on the Tax Advice Network website - www.taxadvicenetwork.co.uk
Are my qualifications (HMRC Prelim and FT1 & FT2 Examinations) recognised? I do not believe so but I do not really care. All that I am interested in is providing my extensive experience in HMRC tax investigations - specialising in Code of Practice 9 for selected clients - to clients whether other professionals or direct to clients.
I already "conform" with high level PII cover and pay HMRC their £300 p.a. for supervising me for Money Laundering. Personally I consider that both these sums are extortions but I pay them to at least protect the clients that I select to deal with.
However having recently had to "educate" HMRC staff on dealing with offshore RTC and the "2 out of 3 rule of thumb" for CT investigations I consider that any more "supervision" would be the straw that breaks the camels back. Especially if it is conspired behind closed doors by people trying to feather their own nests. Unless of course the HMRC MLR function and any perceived additional supervision was merged - and for a cheaper merged fee.
We hear about the lack of regulation but lets be quite honest the vast majority are fed up to the back teeth with regulation and are only interested in giving a quality service within their individual capabilities for a decent living.
The powers are already there for HMRC/Treasury to weed out the bad apples so they should use them and prosecute!!! Then they could apply the extra resources intended to get further regulation introduced into training their staff.

Rant over and now waiting for all those MP's who aren't sleeping at nights because of overseas arrangements getting in touch for me to get them their careless penalties (at the lower end and suspended)

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By wamstax
01st Feb 2023 12:35

I am a tax adviser, I am not an accountant - even though I achieved 98% in "accountancy" exams many years ago when undertaking HMRC Inspector training and went on to examine accounts for a good part of the 41 years that I worked in HMRC. The 2% reduction was for untidiness!!!. I also passed the HMRC Final Training course (with decent results) before becoming a Fraud Investigator in the old HMRC Enquiry Branch (FIS predecessor) and moving on to being a local tax office District Inspector dealing with all types of individuals; partnerships and companies (both Close and public) with multi million dealings. You can see my full profile on my website - www.wamstaxltd.com - or on the Tax Advice Network website - www.taxadvicenetwork.co.uk
Are my qualifications (HMRC Prelim and FT1 & FT2 Examinations) recognised? I do not believe so but I do not really care. All that I am interested in is providing my extensive experience in HMRC tax investigations - specialising in Code of Practice 9 for selected clients - to clients whether these are other professionals or their clients.
I already "conform" with high level PII cover and pay HMRC their £300 p.a. for supervising me for Money Laundering. Personally I consider that both these sums are extortions but I pay them to at least protect the clients that I select to deal with.
However having recently had to "educate" HMRC staff - not a reflection on otherwise very capable staff members - on dealing with offshore RTC and the "2 out of 3 rule of thumb" for CT investigations I consider that any more "supervision" would be the straw that breaks the camels back. Especially if it is conspired behind closed doors by people trying to feather their own nests. Unless of course the HMRC MLR function and any perceived additional supervision was merged - and for a cheaper merged fee.
We hear about the lack of regulation but lets be quite honest the vast majority of tax advisers are fed up to the back teeth with regulation and are only interested in giving a quality service within their individual capabilities for a decent living.
The "Rip-off Britain" tax advisers probably couldn't care less about regulation.
The powers are already there for HMRC/Treasury to weed out the bad apples so they should use them and prosecute!!! Then they could apply the extra resources intended to get further regulation introduced into training their staff.

Rant over and now waiting for all those MPs and House of Lords members who aren't sleeping at nights because of overseas arrangements getting in touch for me to get them their careless penalties (at the lower end of 30% and possibly suspended)

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By JackH
01st Feb 2023 12:37

I was a tax adviser from 1969 to 2019. I was regulated by ICAEW, CIOT and SRA. On the day I retired I rejoiced and resigned from all of these. They are largely in cahoots with HMRC as shown by the tax planning aspects of the PCRT. It is up to me and my clients what aspects of taxation I advise them on and not for some woke supine pusillanimous sycophantic quango to tell me. Why would anyone want to be regulated by HMRC or a body approved or controlled by it? Most of what they do administratively is permeated by incompetence e.g TRS MTD and abysmal contact with "customers" and agents (through WFH). They have an insatiable appetite for litigation and a blank cheque to finance it. A major aspect of their psychopathology is intellectual dishonesty. In Sippchoice [2020] UKUT 149 they instructed Crown Counsel to disavow a statement in the Pensions Manual because it was "wrong": para 41. We cannot publicise their worst arrogance because clients fear later retribution. Does anybody want to further risk their livelihood at the hands of this sinister government apparatus?

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By tedbuck
01st Feb 2023 12:43

As many have said the major problem is the incompetence of HMRC.
The time it takes them to address obvious problems like the footie players tax avoidance/evasion and similar problems.
They can't be bothered to look at the small back pocket traders as they think it isn't cost effective so lose millions because there are millions of back-pocketers and that's without the loss of the small income benefits which they also claim.
I could go on but we all know that HMRC won't do anything about it as they are throwing all their resources into MTD which is about as much use as the AML regulations which we have to struggle with but don't seem to apply to those who make the UK the money laundering centre of the world.
All those reports to SOCA etc are just a waste of time and only get referred to if something else causes a search. Magic - and the wallies in HMG and HMRC sound astonished that productivity is falling - ever likely to in my view.
We have too much regulation which obviously doesn't work and Mr Lee, bless his heart, wants to add still more. Someone ought by now to have realised that regulation doesn't work but just causes lessened productivity. Just look at the FCA as a prime example - they are past masters in regulation making - but you know what - the criminals couldn't care a monkeys and just carry on.
Accounting standards are the other prime example. Private Company Limited used to have accounts, audited, running to about 5 pages, that the client could actually understand - now the same client, unaudited, has accounts running to about 15+ pages most of which is unintelligble drivel put there to comply with 'regulations' dreamed up by the Standards Board and this is billed as PROGRESS - I could think of a better word.
Just a bit disillusioned am I?

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Morph
By kevinringer
01st Feb 2023 12:45

I would argue HMRC should not seek to regulate advisors, because that would not impact the quality of returns made to HMRC. Generally, advice relates to future transactions whereas HMRC returns/submissions are concerned with past transactions. When Mike the Agent is preparing his client's VAT return, he's not giving advice, he is accounting for historic transactions. HMRC's concern is that Mike has sufficient knowledge to make a full and accurate declaration. Mike might not have a professional qualification, but experience trumps qualifications, and it is generally only through experience Mike would know what information and explanations he needs to ask his client. But what if Mike's clients have completed their own returns. Agents are almost always more experienced/knowledgeable than taxpayers. If HMRC wants to regulate agents to improve accuracy, are HMRC going to regulate taxpayers who make their own submissions?

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Morph
By kevinringer
01st Feb 2023 12:54

Is there really a problem with rogue advisors? If there is a problem, HMRC's ongoing enquiry work would identify those advisors and HMRC could deal with them now. My concern is that additional regulation would only add to the burden of compliant agents whilst any rogue advisors would not get caught. Evidence: bookkeepers who are not members of professional bodies are required to register with HMRC for money laundering purposes, but I know bookkeepers who are not registered. HMRC knows who they are because these bookkeepers submit their own SA returns stating they are bookkeepers. Yet HMRC does nothing about it. So the compliant have to face additional burdens, whilst no action is taken against the non-compliant.

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By indomitable
01st Feb 2023 13:50

Another regulator that will do very little apart from waste the public's money, another abyss to waste money on.

For us qualifieds we are already regulated by the ICAEW, CIOT etc. etc.

It should be HMRC's job to identify rogue advisors and not let them operate.

A daft idea

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By Ian McTernan CTA
01st Feb 2023 14:07

How much of an additional cost will this be, on top of CIOT fees, fee to use Chartered Tax Advisor and AML fee which is now almost as much as the membership fee...we're drowning in regulatary bodies already all of which cost.

We don't need more bodies overseeing us, the vast majority of us who ply our trade- we need better HMRC to weed out those 1 in a 1000 who are well over the line.

I wish the mandarins at HMRC and the Treasury would stop trying to lay the blame on everyone else and get their own house in order, with better systems (ones that talk to each other), one reference number for a person, one for a business, joined up tax accounts just to mention a couple points.

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Replying to Ian McTernan CTA:
Mark Lee headshot 2023
By Mark Lee
09th Feb 2023 18:19

I totally agree Ian - hence the reason I would be keen for HMRC to recognise that any further regulation should be limited to those who are not already covered by the obligations arising from membership of a professional body.

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Replying to bookmarklee:
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By carnmores
09th Feb 2023 22:18

cartel

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Replying to bookmarklee:
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By wamstax
10th Feb 2023 03:04

Mark Lee said "I am VERY keen that any new system does NOT impact those qualified professionals who are already regulated by a professional body."

@mark lee - technically I would not be registered as a member of a professional body and yet I have large PII (as you will well know) and have my MLR annual fee for the HMRC supervision.
So why are you advocating that I should have more supervision? I'm probably a wee bit better than some qualifieds I met on the other side. The truth is that HMRC already have the powers to investigate and prosecute bad apple tax advisers - its just that in the past decade or so the powers that be in HMRC always seem to be looking for somebody else to blame before looking at their own house (and that is not a criticism of the HMRC staff who try their best in most instances to the extent that they have been trained but from my perspective the HMRC system that fails them)

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