In its efforts to clampdown on tax avoidance and evasion, HMRC has updated its tax standard document for accountants and agents so that is more explicit in stating that they must not promote artificial tax planning arrangements that exploit gaps in legislation.

HMRC’s aim is to clarify what is expected of advisers, particularly those who are not members of professional bodies.

The document explicitly state that HMRC requires all tax agents (accountants and agents) to maintain high standards that promote tax compliance.

In particular when providing tax planning advice HMRC expects accountants and agents to act lawfully and make their clients aware where there is material uncertainty in the law, particularly if HMRC’s view is unknown.

HMRC expects agents to be straightforward and honest with them, for example, by:

  • disclosing all relevant information
    not suggesting or implying that HMRC endorses or regulates their role as an agent

It further states that agents must not create, encourage or promote tax planning arrangements that:

  • set out to achieve results that are contrary to the clear intention of Parliament in enacting relevant legislation, and
  • are highly artificial or highly contrived and seek to exploit shortcomings in the relevant legislation.

HMRC has a number of means by which to monitor adherence to the standards including the gathering of evidence of any sub-standard agent behaviour in the course of its day-to-day compliance activity. The standard for agents will guide agent behaviour and make clearer the case for HMRC interventions relating to agents.

HMRC is looking to strengthen its Agents Strategy with the intention of better differentiating between agents according to the value they add or risks they present to compliance. As HMRC uses data more effectively it hopes to improve its ability to identify instances of poor tax agent behaviuor.

You can view the full standards document on the .GOV website.

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