"The new Finance Act is effectively regulation of tax advisors. It mandates that advisors must be registered with HMRC before interacting with them in relation to the tax affairs of a client. If advisors violate this rule, they could face a fine of £5000. This means HMRC is now the judge, jury and executioner for tax advisors, which is wholly inappropriate."
"Any regulation in this area needs to be totally independent and apply to advisers and HMRC equally. At the moment tax advisers provide checks and balances in cases where HMRC may be acting inappropriately, which is good not only for advisors and their clients, but HMRC too. HMRC can revoke tax advisors' registration with them, which I hope they would not do without good reason. However, the possibility of being deregistered and the fines advisors could face may have a chilling effect on their willingness to speak up when HMRC makes a mistake. This would threaten the beneficial relationship between advisors and HMRC."
"The idea of tax advisors being regulated by HMRC has been mooted before and rejected, not least because of the view that properly qualified tax advisers are already regulated by their professional bodies such as the Institute of Chartered Accountants in England and Wales (ICAEW) and The Chartered Institute of Taxation (CIOT). Further regulation of tax advisors is not inherently a bad idea, particularly if it can reduce the instances of advisers promoting egregious tax schemes. However, HMRC is not the right organisation to do this, and certainly should not have this much power over advisors."
The Finance Act requires tax advisers to register with HMRC before engaging HMRC about a client's tax affairs, with breaches carrying a £5,000 fine. HMRC can revoke advisers' registration, centralising regulatory power and creating a judge-jury-executioner dynamic that may deter advisers from challenging HMRC errors. Independent regulation that applies equally to advisers and HMRC would preserve checks and balances. Properly qualified tax advisers are already regulated by professional bodies such as ICAEW and CIOT. Further regulation could curb abusive tax schemes, but HMRC is not the appropriate body to hold this level of authority over advisers.
Read at London Business News | Londonlovesbusiness.com
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