The Institute of Chartered Accountants in
England and Wales (ICAEW) has appeared before the UK Court of
Appeal to argue that tax advice provided by accountants is the same
as tax advice provided by lawyers, and therefore accountants’
clients should benefit from legal professional privilege (LPP).
The original case, between HM Revenue &
Customs (HMRC) and international financial services group
Prudential, came before the UK High Court in 2009 and regarded the
disclosure of tax advice provided by Prudential’s accountants
Prudential argued that the advice it had
received from PwC was subject to LPP and therefore shouldn’t be
disclosed to the HMRC.
HMRC disagreed with the argument, a view that
the High Court supported.
UK Court of
The ICAEW said it is not concerned with the
facts of the particular case but rather the public policy argument
as to why chartered accountants giving tax advice should be
entitled to LPP.
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Charles Flint QC, who represented the ICAEW in
court, put forward the following arguments:
- Chartered Accountants (CA) giving tax advice
in confidence to clients are giving advice on the law;
- There is no functional distinction between a
lawyer giving advice on tax law and a CA giving such advice;
- CAs giving tax advice in confidence to
clients are subject to professional controls and ethical duties
equivalent to those to which lawyers are subject;
- There is no principled distinction between
the function and status of a CA giving tax advice in confidence and
a lawyer giving such advice;
- The policy considerations that underlie the
common law privilege in respect of legal advice apply equally to
tax advice given by a CA; and
- The principle underlying legal advice
privilege should apply with equal force to the giving of tax advice
by a member of the chartered accountancy profession.
The ICAEW concluded there is no principled
distinction to be drawn in that respect between lawyers and
ICAEW chief executive Michael Izza said the
institute believes it is in the public interest that there is a
level playing field when it comes to the provision of advice on tax
Izza said the case’s outcome could have
significant implications for ICAEW members and qualified tax
The Court of Appeal also heard from the Law
Society, which argued that privilege should be retained by the
The judgement is not expected until October