Press release: Chartered Institute of Taxation responds to launch of tax advice market call for evidence

“We welcome the launch of this call for evidence.

“There is no place in the tax profession for those who devise, promote or sell tax avoidance schemes. CIOT and other professional bodies strengthened our Professional Conduct in Relation to Taxation (PCRT) rules in 2017 to make this explicit.

“It is our view that building on PCRT is the best approach to guaranteeing high standards in the tax advice market.

“Regulation must deal with the fact that some 30 per cent of registered tax agents are outside any professional body and consequently neither their clients nor HMRC have any recourse to professional body disciplinary schemes in respect of their work. Additionally many – perhaps a majority – of those who devise and promote avoidance schemes are not tax agents at all. Any reform in this area needs to recognise this and to avoid either putting competent and ethical tax advisers out of business or pushing more tax advisers to operate outside professional bodies.

“We welcome the recognition from government that customer protection is an important element of how the tax advice market is regulated, as well as protecting government revenue. This raises questions, such as, if the State itself is a key player in the tax system, as it has to be, can it also act as the direct regulator of all taxpayers’ agents without detriment to taxpayers’ rights?

“It appears that political support for greater regulation of tax services is growing. Indeed people often express surprise that comprehensive regulation does not exist already. But regulation only makes sense if it can be effective in producing improvements and if it can achieve this at proportionate cost. That is why we believe working through professional bodies to strengthen consumer and exchequer protection, rather than trying to invent a new regulator, is the best approach. We look forward to working with government to achieve this.”

Notes for editors

1. The Call for Evidence, which is open until 28 May, can be viewed here.
2. As defined by HMRC, tax avoidance is “bending the rules of the tax system to gain a tax advantage that Parliament never intended. It often involves contrived, artificial transactions that serve little or no purpose other than to produce a tax advantage. It involves operating within the letter, but not the spirit, of the law.” (Source: Measuring tax gaps 2019 edition)