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Newth Talks Tax - Specialising?

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25th Feb 2008
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Specialising?

HD posed an interesting question on 17 April 2007. Most of their clients require advice on general tax issues, and each of the main taxes have to be considered for every query raised.

Given the breadth of the tax legislation HD considers that they are as up to date as possible by attending training courses and seminars and undertaking professional reading.

However, HD considers that in order to be 100% accurate with client queries all of the time, people need to specialise, as surely no one can be expected to know everything about every tax all the time. HD has always resisted specialising into a particular area of taxation, but is going to find it more and more difficult to keep up to speed with everything on the board. HD already declines to advise on IHT and NIC issues, and is likely to add to this list.

Do others have the same experience, or is HD alone on this problem?

‘3plc’ has specialised in VAT for many years, and considers that it is still a struggle to keep up with one subject. Specialising alone is not the complete answer, as one tax impacts on another. ‘3plc’ advises other accountants and solicitors, and between them and the client they are able to resolve most tax issues, however complex.

David Winch suggested that practitioners needs to consider their client base if they practice as a specialist. Is the work likely to be recurring? Again, practitioners needs to consider the client base and geographical area. These implications need to be considered in advance. There could also be an impact on the professional indemnity insurance. Specialisation requires a narrower range, but greater depth of knowledge, and produces high regard. There must be nothing harder than trying to be a tax ‘all rounder’.

Nichola Ross Martin confirmed that HD was not alone. The trick is to know one’s limitations and ‘buy in’ advice regarding other tax specialities. It is wise to specialise in an area of tax in which you are interested. Steve Holloway suggested that this is more difficult than it appears, as clients assume that you are an expert in every conceivable tax area. Trevor Scott was pleasantly surprised by this posting, as most accountants he knew wished they had taken another career option!

I consider that HD is taking a very sensible approach to tax advice, which others should follow. I have been in the tax world for very many years, and there are only two or three people I would contact now regarding most tax issues (and not all tax issues). As the subject has become more and more complicated, then leading tax practitioners, lecturers and writers have become more and more specialised in their approach.

This decision should impact on general practitioners, but it is apparent that many general practitioner firms consider that it involves ‘loss of face’ if they do not try and answer every possible client tax query. This is a very dangerous attitude in these days of litigiousness, and has professional indemnity implications, as David Winch rightly suggests.

There is nothing wrong in involving a tax consultant or tax consultancy firm on the understanding that they do not ‘steal the client’. That is the underlying fear of many accountants. It is much more courageous to admit to the client that one does not know all the answers and suggest that consultant help is required. Some may consider that such an approach should be set out in the original engagement letter.

It is far better to be cautious, even to the point of obtaining a second opinion in some cases. The alternatives are not worth thinking about in terms of legal claims for professional incompetence and disciplinary proceedings from the relevant professional institute.

One final point. It is not necessarily the largest firm that is able to give the best tax consultancy advice. Practitioners need to be very careful about engaging someone else, and it is essential to check the fee position before engaging the other firm. Recommendation from another accountant is the best opening. Another option is to engage a tax barrister in some circumstances. I have done this on more than one occasion. It is not as daunting as you would think, and the cost may be far less than you think, particularly if the barrister is briefed under the Direct Access schemes arranged by the main accountancy and tax bodies. An additional advantage is that counsel's opinion will impress the HMRC inspector.

Newth Talks Tax Archive

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