Draft legislation from the UK HM Revenue and Customs (HMRC) would prevent accountants from giving the most basic tax advice, the Association of Chartered Certified Accountants (ACCA) said.
HMRC’s draft Tax Agents and Deliberate Wrongdoing is controversial because it defines almost anyone in the financial system as a ‘tax agent’, and classes any tax planning, including using government incentives, as ‘deliberate wrongdoing’ the ACCA said.
ACCA head of taxation Chas Roy-Chowdhury said there is a strong chance advisers will be deterred from offering tax advice, for fear of laying themselves open to fines or, more critically, the business-paralysing removal of all their files and papers.
The ACCA said HMRC needs to work with the profession to ensure any new powers will affect only agents involved in fraud or evasion, and not penalise advisers who simply take a different view from HMRC on the legislation.
HMRC has promised to reevaluate the most controversial elements of their proposals and a revised draft is expected shortly.