The guidance appears in the publication Professional Conduct in Relation to Taxation (PCRT): the latest edition has been issued by the bodies today. PCRT sets out the high ethical standards which should govern the tripartite relationship between tax adviser, client and HMRC. It supports the key role members play in helping clients comply with their tax obligations. This guidance is followed by members of the listed professional bodies, but many other bodies and professional firms also adopt it as best practice.
It is based on five fundamental principles:
- Professional competence and due care
- Professional behaviour
and provides guidance on applying these principles to practical situations, for example, if there is an irregularity in a client’s tax affairs and the client is reluctant to correct it.
The document makes clear the obligation of tax advisers to advise their clients accurately and thoroughly of the risks and implications of their actions including reputational and practical aspects.
Rosalind Upton, chair of the working party which produced the guidance, and Council member of the Chartered Institute of Taxation, said: 'The updated Professional Conduct in Relation to Taxation gives clear, concise and practical guidance which will help tax advisers when dealing with difficult situations such as what to do when a client refuses to make a full disclosure to HMRC or receives an excessive repayment. It expands the existing guidance on areas including tax avoidance and the new General Anti-Abuse Rule.'
PCRT has been reviewed by Counsel, Ximena Montes Manzano of Atlas Chambers.
HMRC has been consulted and ‘acknowledges that this guidance is an acceptable basis for dealings between members and HMRC’. ‘HMRC welcomes the publication of the new edition of this guidance for tax agents as a positive step. We recognise the role they play and the responsibilities they bear in ensuring taxpayers understand and comply with their tax obligations.'
The key changes in this update include:
- An enhanced chapter on ‘Tax planning, tax avoidance and tax evasion’ which includes guidance on the new General Anti-Abuse Rule.
- Points to consider when HMRC wants to visit the member to discuss practice matters eg as part of Agent and Client Statistics
- Professional standards relating to participating in consultations or secondments with HMRC
- Advising clients who wish to rectify past irregularities
- A brief section on electronic filing.
- The professional bodies who were members of the working party and who have endorsed the guidance are:
- The Chartered Institute of Taxation,
- The Association of Taxation Technicians,
- The Association of Chartered Certified Accountants,
- The Institute of Chartered Accountants in England and Wales,
- The Institute of Chartered Accountants of Scotland, and
- Society of Trust and Estate Practitioners
This guidance was last updated in 2011.