This helpsheet provides further guidance on the application of the Fundamental Principles and Standards when making use of voluntary disclosure facilities.
It is in the public interest that taxpayers who wish to regularise their tax affairs should receive competent and ethical support from a suitably experienced tax adviser. However, there are risks to the member and the profession in accepting such engagements which should be carefully managed as set out below.
The use of disclosure facilities is a specialised area and often involves tax liabilities on income arising or assets kept offshore. A member should not undertake this type of activity unless they have the relevant experience and knowledge or obtains specialist support.
Before accepting a prospective client for a voluntary disclosure, a member should consider carefully the following factors:
- The member must seek to reassure themselves that the client will make a full and frank disclosure to the member and regularise their affairs in all respects.
- The member should make enquiries as to the source of any undeclared funds. If there are suspicions that the funds may result from wider criminal activities unrelated to tax, the member will need to consider carefully whether to accept the client or not.
- The member should be alert to the possibility that criminals may use regularisation of their tax affairs as a method to bring illegally acquired funds back into the regular economy.
The member is strongly recommended to meet the prospective client face to face as part of assessing these matters.
The member should make it clear to the prospective client that they will only accept the engagement on the basis of full disclosure and regularisation of all aspects of the prospective client’s tax affairs. If in any doubt as the case progresses, the member should refer to the provisions in the guidance in Dealing with irregularities.
The member must at all stages of their interaction with any prospective client comply with their obligations under anti-money laundering legislation. The profile of such an engagement suggests that these clients are at higher risk than usual of being involved in money laundering, so extra Customer Due Diligence checks may be needed.
In deciding whether a suspicious activity report should be made to NCA, the member (or the member’s MLRO) should take into account the various requirements of the legislation and any reporting exemption which may apply. It is also possible that the member may need to apply for consent to proceed at some point during the engagement. See the CCAB guidance.
If the member becomes concerned about the client’s conduct and circumstances at any stage during the engagement, the member should reassess their anti-money laundering obligations and, subject to their anti-money laundering obligations against ‘tipping off’ (see CCAB guidance), consider resigning from acting for the client.