Chapter 19: PCRT the fundamental principles Flashcards
19.1 The fundamental principles - integrity
• Integrity – to be straightforward and honest in all professional and business relationships and do nothing knowingly or carelessly that might mislead either by commission or omission.
19.1 The fundamental principles - Professional competence and due care
• Professional competence and due care – maintain professional knowledge and skill at a level to ensure a client receives competent services based on current developments in practice, legislation and techniques and act diligently and in accordance with applicable technical and professional standards. A member should not stray from the terms of their agreed engagement, if they exceed the scope, they should agree revised terms and check if the PII covers the enhanced work. A member is free to decline to act for a client, when they limit or amend the scope of services, they provide to a client they should make this clear in writing. A member must not undertake work that they are incompetent to perform unless they obtain assistance from a suitably qualified specialist. When giving a significant opinion a member should consult a second opinion. On occasions there may be more than one interpretation of the law, each case should be considered on facts and circumstances.
19.1 The fundamental principles - objectivity
• Objectivity – to not allow bias, conflict of interest or undue influence of others to override professional or business judgements. Relationships which bias or unduly influence the professional judgement must be avoided. A member must explain to their client the risk of the tax planning or position and the reason for the conclusion of the advice. A member must disclose to the client if they receive commission or incentives and the amount, they receive from a third party relating to the matter they are advising.
19.1 The fundamental principles - Confidentiality
• Confidentiality – respect the confidentiality of information acquired as a result of professional relationships and not disclose this to third parties without proper and specific authority, unless there is a legal or professional right to disclose it, nor use the information for the personal advantage of the member of third parties. Confidentiality may be an express term of the engagement letter, if it is not, a court in most circumstances would treat confidentiality as an implied contact term. When a member discloses client information in a legal right, only the minimum amount of information to protect those interests may be disclosed. Examples of circumstances may include:
To enable a member to defend themselves from a criminal charge, to enable a member to defend themselves in disciplinary proceedings, to resist a legal action made against them, to enable a member to sue for unpaid fees or to enable a member to sue for defamation. A member is advised to seek legal action before doing this. The AML regime provides a statutory code to determine when a disclosure must be made to the NCA. This is a mandatory scheme but gives structure for assessment in tax context. A member should follow the CCAB guidance.
19.1 The fundamental principles - professional behaviour
• Professional behaviour – to comply with relevant laws and regulations and avoid any action that discredits the profession. A member must behave courtesy and considerate towards everyone they contact. A member who has reason to believe that proposed arrangements are tax evasion must strongly advise clients not to enter into them. If a client ignores the advice, it is appropriate to cease to act for the client. A member should manage conflicts in an open, constructive and professional manner. A member’s own tax affairs should be up to date, if not this could bring disrepute on them or their professional body. A member should ensure their internal and external communications including social media are consistent with the principles in this guidance.
