Raising standards in the tax advice market: call for evidence
Executive summary
- AAT strongly believes that anyone providing paid-for tax advice should be required to be a member of a relevant professional body. This would ensure greater consumer protection for individuals and businesses, improving taxpayers' experience; lower HMRC costs; reduce tax avoidance and evasion; minimise money laundering risks and greatly enhance trust by improving the credibility, image and reputation of the profession.
- AAT considers that issues with clients accessing redress would also be removed by requiring all agents providing paid-for tax advice to be a member of a relevant professional body. Clients of professional body members should not experience problems due to a lack of redress given they can use the complaints procedures that each professional body has in place. AAT has a comprehensive complaints procedure in place, as do the other professional bodies listed above.
- Compelling agents who provide paid-for tax advice to be members of a relevant professional body will also address the challenge around helping consumers to make more informed choices. AAT considers this would be a far better means of protecting consumers as it would ensure that whichever agent a consumer chooses would be expected to meet their professional body’s standards and be subject to a proportionate degree of regulation.
- AAT takes the view that there may be circumstances where a penalty should be levied on the advisor instead of, or in addition to, the client. Unregulated agents are not only more likely to make mistakes and be the cause of complaints, they are less likely to hold appropriate insurance. As such, joint liability may be a more appropriate approach to take given this is likely to better reflect the reality of many tax advice situations. AAT considers that both the Canadian and Portuguese examples given in the Call for Evidence have merit and are worthy of further exploration.
- AAT has concerns about the impacts of introducing external regulation. The creation of another layer of bureaucracy, bringing with it increased costs and antagonising the professional body sector rather than working together, would be counterproductive. Looking at the list provided in the call for evidence of likely requirements that an external regulator would impose: possessing relevant qualifications, having professional indemnity insurance, being registered for AML supervision and so on (all of which are already requirements for professional body membership) begs the question: Why reinvent the wheel at expense to the industry, consumers and businesses, simultaneously creating considerable risk, upheaval and uncertainty?
Related consultation responses
Raising standards in tax advice: protecting customers claiming tax repayments
We support some of the proposals, but requiring professional body membership for anyone providing paid-for tax and accountancy services would be more effective.
Raising standards in the tax advice market
We support raising tax advice standards, but don't believe the proposed requirement to hold Professional Indemnity Insurance will improve trust in the market.
Recognition of professional qualifications and regulation of professions
We outline here the customer protection impacts our regulations provide, and the professional standards and CPD requirements we place on our members and why.
