Chapert 13 - 26 Flashcards
What do C&I members employment as well as others
Excluded with complaint with certain paragraphs of chapter 2 of PRPG
Should consider whether the SÃO rules apply where they are responsible for their employers financial accounting arrangements
CPD
Need to do if a member that provides tax services or uses designed letters
Make declaration to CIOT every year
Records must be kept for current year plus minimum of three previous complete calendar years
- date CPD taken, and details of learning or activity
Honorary members, certain retired members and pro bono work not required to undertake CPD
Professional indemnity insurance exemptions
Every member in practice within the territorial scope should ensure their firm holds PII
Pro bono exempt but required to consider if it will be beneficial
Subcontracted exempt if they have written confirmation from contracting firm that
- named the subcontractor on its own PII policy
- the insurer has wavered its right to subrogation in relation to the sub contractor
Retired exempt unless do pro bono
Overseas firm but obtain nearest equivalent cover
Required limit of liability PII
Annual minimum limit of indemnity for each and every claim is £1m
Where firms gross fee income is less than £400,000, the required annual minimum limit of indemnity for each and every claim is the greater of
- 2.5x the gross fee income
- 100,000
Insurance policy may include an excess provided that this excess does not exceed £30,000 per principal
- can be calculated on a group basis
- before agreeing to the level of excess to be included in the policy the firm must satisfy itself that it would be able to meet the cost of the excess element of any claims which might arise
Requirements for PII
Needed for each and every claim and must cover all civil liability
Underwritten by insurer or an insurance arrangement approved by law body
Covers all civil liability including costs and expenses in connection with the provision of taxation services
Meets the required limit of liability
In respect of which all premiums have been paid and as they fall due
Not avoidable by reason of misrepresentation or defaul of insured
Must ensure have it for not less than 6 years after they cease to be member in practice
PRCT
applies to all members who practice in tax, whether or not they are in professional practice
Members are bound by the five fundementally principles and five standards for tax planning but must comply with AML
Five standards for tax planning
Client specific
Lawful
Disclosure and transparancy
Advising on tax planning arrangements
Professional judgement and appropriate documentation
Where member has genuine and reasonably uncertainty as to whether planning is in breach of this standard they should
- document the detailed reasoning and evidence sufficiently to be able to demonstrate why they took the view that any planning was not in breach
- include their client advice and assessment of uncertainties and tax risks involved in the planning
- include in their client advice an assessment of relevant disclosures that should be made to the relevant revenue authority
Why would you give fuller disclosure than necessary
Filing relies on valuation
Extent doubt exists
Size and gravity of item in question
View taken by member
Terms of law
Manner which disclosure is to be made
When would tax advisor approve returns
In capacity of liquidator, receiver, administrator or under personal appointment as a trustee, executor, attorney or director
- consider legal authority
- process whereby client will review and take responsibility for the contents of the return
- legal implications of approving the truth for both the practice and individual signatory
PRCT Help Sheet B
Contains essential practical guidance for members on whether tax advice and planning complies with fundamental principles and standards
Behaviour of advisor is focus not client tax outcome
HMRC dealing with errors flowchart Help sheet C
Establish facts - is there an error?
Is the error trivial? Tax effect no more than minimum, say £200
Is specific authorisation required by client to disclose the error?
Does client authorise disclosure
- stage 1 = after initial request
- stage 2 = oral advice on consequences
- stage 3 = written advice on consequences
Stages of ceasing to act if client won’t disclose error
Advise client in writing that you no longer act for them
Notify HMRC that you have ceased to act
Consider if you need to advise HMRC that any accounts/ statements carrying a report signed by you can no longer be relied upon
Consider whether a report should be made to MLRO/ NCA
Carefully consider your response to any professional enquiry letter
Client should notify potential deficiency in their return unless
The basis upon which the self assessment was made was sufficiently clear in the original return
There is continuity of treatment of the item from previous returns
The item was treated in accordance with prevailing practice
How to deal with error within your business and they won’t disclose
Consult internal whistleblowing procedures where they exist
Consider making a report to money laundering reporting officer in a regulated business
Consider taking legal advice
Consider willingness to be associated with the business
Schedule 36 finance act 2008 statutory notices
Can only issue a notice to third parties where it is approved by FTT and taxpayer agrees
HMRC may extend deadlines
Client can refuse HMRC entry to premises
Schedule 36 does not overnight legal professional privilege
Types of legal privilege under common law
Legal advice privilege
- covers documents passing between client and their legal adviser prepared for the purpose of obtaining or giving legal advice. Tax advisor not included
Litigation privilege
- data created for the dominant purpose of litigation
- quasi privilege for pending appeal
- speak to legal expert if unsure
Members personal tax affairs
Member must keep own tax affairs up to date in accordance with the fundamental principle of professional behaviour
If in dispute with HMRC may wish to engage an agent
Needs to be done to avoid raising doubts within HMRC to standard of the members professional work and could bring the member of the professional body into disrepute
Who does not need to be AML supervised
Employee
Fully retired
Working ourside the uk
Not working in tax and accounting sector
AML scheme rules for registrants
- disclose criminal history check
- Complete and submit AML annual return
- Registration and annual retention fee
- Notify institution if they wish to withdraw from the register, propose to wind up or are subject to insolvency practices or otherwise cease to be liable to be supervised
- Conduct practice in accordance with laws of the institute and PRPG/PCRT guides
Scope of AMLGAS
Auditor
External accountant
Insolvency practitioner
Tax advisor
Trust or company service provider
Doing a defined service = ordinary course of business
What is terrorism
When action used to influence the gov or intimidate the public
Terrorism property
- likely to be used for terrorism
- the proceeds of acts of terrorism
- the proceeds of acts carried out for terrorism
What are primary offences AMGLAS
Conceal, disguise, convert or transfer criminal property
Acquire, use or possess criminal property
Involved in an arrangement that allows another to acquire, retain, use or control criminal property
Remove criminal property from a UK jurisdiction
Penalty = 14 years imprisonment or unlimited fine or both
What do s not money laundering
If it is reasonably believed to have happened in a location outside of the UK where it was legal
It would have carried a maximum sentence of less than 12 months had it occurred in the UK
What is the tipping off offence
Person in the regulated sector disclosed that a suspicious activity report had been made
Investigation into allegations of MTLF is underway
Disclosure is likely to prejudice that investigation
Maximum penalty = 2 years imprisonment, unlimited fine of both
What is failure to report offence
When regulated sector person fails to report knowledge or suspicion of money laundering or terroidt financing as soon as practicable
Maximum penalty = 5 years imprisonment, unlimited fine or both
What is prejudicing an investigation
Includes reg and non reg sector
Interference with material relevant to an investigation can akount to an offence
For outside reg: revealing the existence of a law enforcement investigation can amount to an offence
Max penalty| 5 years imprisonment, unlimited fine or both
BOOM
Beneficial owner, officer and manager
Must apply to superadvusiry committee to get approval
If subsequently convicted of an offence must inform supervisory authority within 30 days of conviction date
- business must also inform within 39 days when they become aware of conviction
Sole practitioners MLRO requirements
Appoint board member or member of senior management to be responsible for the businesses’s compliance
Appoint s nominated officer because sole practitioner will be responsible for submitting external reports to NCA
Establish an independent audit function for AML policies, controls and procedures
What are responsibilities of senior management/ MLRO
Approve
- policies, controls and procedures adopted by the business
- before entering into or continuing a business relationship with, or carrying out occasional transaction for person established in a high risk third country
What must there be systems and controls in place for
Risk assessment
Customer due diligence
Record keeping
Internal control
Ongoing monitoring
Reporting procedures
Compliance management
Communication
