Ch 14- Ethics

Question 1

Fundamental (ethical) principles (5). - OPPIC

Answer 1

Objectivity - Exercise judgement without bias or conflict of interest
Professional competence and due care - Maintain professional knowledge and skills
Professional behaviour- Avoid conduct which may discredit the profession
Integrity- Straightforward & honest in all relationships
Confidentiality -Don’t disclose confidential info unless legally obliged to.

Question 2

Issues when advising on tax - timeline of risks, skills required and processes of engagement

Answer 2

Risks to integrity - Client may not be honest or straightforward (prof scepticism)
Skills and competence- Do we have the skills required to carry out engaged work
ML checks- Proof of address, utility bills, passports, incorporation certificates etc.
Permission to contact old advisers- Ask old advisor for info necessary to decide on acceptance.
Issue engagement letter - Agree terms, scope, responsibilities and conditions.

Question 3

Conflicts of interest

Answer 3

Avoid acting for numerous clients where there is a conflict of interest (unless):

-All parties are made aware and provided consent
-Considers separate engagement teams (e.g. different offices)
-Implements clear guidelines on confidentiality

Question 4

Money Laundering requirements & consequences

Answer 4

Appoint MLRO and train staff
Establish internal risks assessments and procedures
Report suspicions of ML to NCA- Client should not be informed of this (TIPPING OFF)

Consequences:
Tax agents with dishonest conduct could be fined a civil penalty up to £50,000
HMRC may: Publish details of agent, and have rights to all WP’s (with Tax tribunal agreement).

Question 5

Tax avoidance

Answer 5

Tax avoidance= lawful way of minimising tax bill through efficient use of losses, ISA investment, spouse exemptions and NRB’s.

HMRC have targeted schemes (anti-avoidance) in order to counter the advantages gained and impose penalties.

Question 6

Tax evasion

Answer 6

Tax evasion= Illegaly and deliberately misleading HMRC though suppressed or false info.

Proceeds from tax evasion= Treated as a criminal offence (same as theft or drug trafficking)

Question 7

GAAR- General anti-abuse rule

Answer 7

Introduced by HMRC to counteract tax advantages.

Adjustments can be made to reverse these advantages.

Penalty of 60% of the tax advantage can be applied by GAAR.

Question 8

Penalties for offshore non-compliance

Answer 8

Counteract tax evasion concealed overseas.

Penalties issued to taxpayer and assisters.