The UK Court of Appeal has rejected a proposal
that would allow tax practitioners similar court privileges to
lawyers in order to protect client confidentiality. The court ruled
that Legal Professional Privilege (LPP) should only be granted to
lawyers, solicitors and barristers.
Financial services group Prudential tried to
use the court to extend the LPP rules for advice it had received
from tax advisers PwC in an effort to block HM Revenue &
Customs from obtaining information.
During the hearing, the Institute of Chartered
Accountants of England and Wales argued that tax advice provided by
accountants is the similar to tax advice provided by lawyers, and
therefore accountants’ clients should benefit from LPP.
In its ruling, the Court of Appeal said that
extending LPP to other professionals, such as accountants, was a
matter for Parliament and not for the courts to decide.
Parliament has considered the matter several
times in the past 40 years and is yet to make the change.
ICAEW chief executive Michael Izza described
the ruling as disappointing and said it was unfair that lawyers
were bound by LPP while the majority of tax advisers, who are from
the accountancy profession, are not.
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The next step for the accountancy profession
will be to try and influence change through the political