Chapter 5 PRPG Client Service Flashcards
5.1 Duty of Care
The law states a member has a duty of care to their client, they must exercise reasonable skill and care and an engagement letter or other correspondence may limit or define a member’s duty of care.
5.2 Continuing assessment of engagement
A member should agree a realistic timetable for delivery services. Clients should be informed and lengthy gaps in communicating should be avoided.
5.3 Managing client expectations
A member should agree a realistic timetable for delivery services. Clients should be informed and lengthy gaps in communicating should be avoided.
5.4 Supervision and training
If a member delegates work covered by their engagement, the member remains responsible for the work so should supervise the work to confirm the work performed is satisfactory and that is it carried out by persons who have been suitably trained to carry out the work involved.
5.5 Use of Subcontractors
A member must obtain a client’s consent before subcontracting work on that client’s affairs. A member could consider a clause authorising referral to a subcontractor within the engagement letter, this would eliminate the need to seek client consent for each referral.
5.6 Consultation and second opinions
A member is encouraged to consult with fellow professionals when advising clients where appropriate. This can be obtained by requesting an independent view from a colleague, or by instructing another member or tax counsel. Where risks for giving wrong advice is high, a member should consider taking a second opinion. A significant opinion/advice is in respect of either:
• The amount of tax at stake in relation to the matters advised in its significant for a client and there is a risk that a contrary view to that taken by the member could be reached
• The matters advised on are for some reason important to a client to merit taking a second opinion
5.7 Form and consent of advice
On deciding the form of advice provided to the client, a member should exercise professional judgement and consider:
• The importance of the transaction and amounts involved
• The specific or general nature of the client’s enquiry
• The time available for development and submission of the advice
• The technical complications presented
• The existence of authorities and precedents
• The tax sophistication of the client
• The needs to seek other professional advice
Advice should normally be given in writing; this reduces the risk of a client misunderstanding and the client has a written record of the advice given. Unless set out in a separate document an advice communication should normally set out:
• The purpose for which the advice is required and the client’s objectives
• The background facts and assumptions of the advice and if the facts have been verified by the advisor
• The alternatives open to the client
• The risks associated with the advice
• Relevant caveats and exclusions
The advice and working papers should be consistent with the PCRT and the standards for tax planning. A member should refer the relevant tax legislation and the practice of HMRC when formulating advice. A member should make clear the advice is current and may be affected by subsequence changes in law.
5.8 Keeping proper professional records
A member should make a proper professional record of all their dealings in connection with their client in order that:
• They are able to communicate effectively, including with HMRC
• They, their colleagues and successors can access a record of the client history to inform future client service
• They are able to resolve any misunderstandings or complaints
• They are able to defend any allegation of negligence
The records should include:
• All written communications relating to the client’s affairs
• File notes of meetings and telephone conservations, which should be contemporaneous and dated
• Records of how advice given is reached, including details of technical research, consultations and second opinions
• All necessary permanent information and copies of such working documents
Records should be organised and if electronic, they need to be backed up. A member should put in place a policy which considers both statutory requirements and time limits for legal action against a member.
5.9 Time limits, due dates and interest
A member should maintain a system to ensure all relevant time limits and deadlines are monitored and appropriate action is taken. For tax compliance work the member is responsible for keeping the client informed about the tax payable but not responsible for ensuring the client does pay the tax. If a member does think they are responsible for monitory relevant dates for a compliance client, a specific exclusion should be incorporated in the letter of engagement or communicated to the client in writing. A member who has no compliance responsibilities for a client would not normally be expected to monitor relevant dates and tax payments, unless specifically requested to do so.
