The leading UK accountancy and tax bodies have published updated guidance on the standards expected of tax advisers and agents.
The guidance – formally known as Professional Conduct in Relation to Taxation (PCRT) – has been endorsed by the HMRC and sets out professional standards in relation to the facilitation and promotion of tax avoidance.
The guidance in the PCRT is based on five fundamental principles:
- Professional competence and due care
- Professional behaviour
For this latest update, the professional bodies, which included the Association of Chartered Certified Accountants, the Institute of Chartered Accountants in England and Wales and the Institute of Chartered Accountants of Scotland, strengthened the existing five fundamental principles by adding five new Standards for Tax Planning that members must observe.
One of the new standards states that members: “Must not create, encourage or promote tax planning arrangements or structures that set out to achieve results that are contrary to the clear intention of Parliament in enacting relevant legislation, and/or are highly artificial or highly contrived and seek to exploit shortcomings within the relevant legislation.”
The addition of the new standards responds to the Government’s challenge made in March 2015, for professional bodies to take a greater role in setting and enforcing clear professional standards around the facilitation and promotion of tax avoidance.
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In a joint statement, the seven bodies said: “We believe these new Standards for Tax Planning achieve an appropriate balance – making clear to the small minority of tax professionals who continue to facilitate and promote tax avoidance schemes that this behaviour is not acceptable, while enabling the vast majority of advisers to continue undertaking responsible tax planning for their clients to help ensure that they pay the right amount of tax as intended by law.”
The Government has supported the publication of the updated PCRT. HMRC has also acknowledged that the updated guidance is an acceptable basis for dealings between members of the bodies and HMRC.