Ethics - Tax avoidance schemes Flashcards
What are the fundamental principles?
COIPP
Confidentiality
Objectivity
Integrity
Professional competence and due care
Professional behaviour
Integrity
Requires all members to be straightforward and honest
Objectivity
An obligation to not compromise professinal judgement due to bias, self interest or the influence of others.
Professional c ompetence and due care
Maintaining professional knowledge and skill to ensure a competent service based on current developments
Confidentiality
Refraining from disclosing information outside the firm without proper or specific authority unless there is a legal reason to do so
Professional behaviour
Complying with relevant laws and regulations to avoid any action that may discredit the profession
When can you disclose confidential information?
If it is:
Permitted by law - I.e you have specific authority to do so
Required by law - money laundering
Conflicts of interest are?
A thread to the fundamental principles
What are examples of conflicts of interest
Acting for both spouses on the breakdown of a relationship - Bozon
Acting for a company and it’s directors/shareholders
Acting for both parties on the sale of a business
What safeguards can be put in place?
Notify the relevant parties that there may be a conflict of interest
Obtain permission to act for them based upon this information
The use of seperate teams
Procedures to seperate access of confidential information
Use of confidentiality agreements in the firm
Regular review of safeguards
What should you consider before taking on a prospective client?
Whether acceptance would create a risk of not complying with the fundamental principles
If safeguards do not lower the risk to an acceptable level
You must decline the engagement
What fundamental principles does tax evasion effect?
Integrity
Professional behaviour
What responsibilities do we have in regards to tax evasion?
If the client doesn’t produce the informstion we need or answer our questions, we need to consider if we can continue working for the client
Advise clients to make a full disclosure to HMRC or allow us to on theit behalf. If they refuse we must not act for them and notify HMRC of this, but not the reason for doing so, as this would breach confidentiality
What is money laundering?
The process by which criminals try to conceal the true origin of their criminal activity
This can include tax evasion
When a cvlient is taken on, you should
Person -
verify their identity by reliable and independent means such as.
Passport, drivers license, HMRC doc, proof of address.
Company -
Proof of incorp
Identifying:
Directors
Shareholders
Instructor and their permissions to do so
You should retain all client identification and records for?
at least 5 years from the date of the end of the the relationship
What do you do if you suspect money laundering?
Report to Money Laundering Officer
National Crime Agency if no MLO
Direct taxes avoidance schemes
Direct taxes cover - Income, NI, CGT, Corp, IHT and Stamp Duty.
Agents have disclosure obligations and clients also do in some situations.
A tax advantage is defined as
Relief or increased relief from tax, repayment, increased repayment avoidance or reduction of a charge to tax.
If you fail to comply with the disclosure obligations
You can be charged up to £600/day running from the date of the failure to disclose.
If a disclosure notice has not been complied with within the 10 days
A maximum fine of £5,000 / day will be charged.
VAT avoidance schemes
Also have disclosure responsibilities like direct taxes, an initial pe nalty of £600 / day can be imposed or up to 1million in some circumstances.
Who is a serial tax avoider?
Someone that has2 or more tax avoidance schemes that have been beaten on or before 6th April 2017
