Ethics - Tax avoidance schemes Flashcards

1
Q

What are the fundamental principles?

A

COIPP

Confidentiality
Objectivity
Integrity
Professional competence and due care
Professional behaviour

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2
Q

Integrity

A

Requires all members to be straightforward and honest

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3
Q

Objectivity

A

An obligation to not compromise professinal judgement due to bias, self interest or the influence of others.

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4
Q

Professional c ompetence and due care

A

Maintaining professional knowledge and skill to ensure a competent service based on current developments

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5
Q

Confidentiality

A

Refraining from disclosing information outside the firm without proper or specific authority unless there is a legal reason to do so

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6
Q

Professional behaviour

A

Complying with relevant laws and regulations to avoid any action that may discredit the profession

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7
Q

When can you disclose confidential information?

A

If it is:
Permitted by law - I.e you have specific authority to do so

Required by law - money laundering

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8
Q

Conflicts of interest are?

A

A thread to the fundamental principles

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9
Q

What are examples of conflicts of interest

A

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

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10
Q

What safeguards can be put in place?

A

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

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11
Q

What should you consider before taking on a prospective client?

A

Whether acceptance would create a risk of not complying with the fundamental principles

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12
Q

If safeguards do not lower the risk to an acceptable level

A

You must decline the engagement

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13
Q

What fundamental principles does tax evasion effect?

A

Integrity

Professional behaviour

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14
Q

What responsibilities do we have in regards to tax evasion?

A

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

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15
Q

What is money laundering?

A

The process by which criminals try to conceal the true origin of their criminal activity

This can include tax evasion

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16
Q

When a cvlient is taken on, you should

A

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

17
Q

You should retain all client identification and records for?

A

at least 5 years from the date of the end of the the relationship

18
Q

What do you do if you suspect money laundering?

A

Report to Money Laundering Officer
National Crime Agency if no MLO

19
Q

Direct taxes avoidance schemes

A

Direct taxes cover - Income, NI, CGT, Corp, IHT and Stamp Duty.

Agents have disclosure obligations and clients also do in some situations.

20
Q

A tax advantage is defined as

A

Relief or increased relief from tax, repayment, increased repayment avoidance or reduction of a charge to tax.

21
Q

If you fail to comply with the disclosure obligations

A

You can be charged up to £600/day running from the date of the failure to disclose.

22
Q

If a disclosure notice has not been complied with within the 10 days

A

A maximum fine of £5,000 / day will be charged.

23
Q

VAT avoidance schemes

A

Also have disclosure responsibilities like direct taxes, an initial pe nalty of £600 / day can be imposed or up to 1million in some circumstances.

24
Q

Who is a serial tax avoider?

A

Someone that has2 or more tax avoidance schemes that have been beaten on or before 6th April 2017

25
Q

What is a defeated scheme

A

Where the taxpayer has reached an agreement with HMRC that results in no tax advantage

HMRC has obtained a favoutsble court or tribunal hearing

26
Q

What happens to serial tax avoiders?

A

They will be issued with a serial tax avoidance notice which lasts for 5 years and have to disclose ectrs info to HMRC

27
Q

What are the sanctions against serial tax avoiders?

A

Penalties
Being publically named
Restrictions on reliefs for up to 3 years

28
Q

GAAR - General anti avoidance rule

A

the aim of GAAR is to deter tax payers from using abusive tax arrangements and the advisors from promoting them.

29
Q

What are examples of abusive tax arrangements?

A

Significantly less income, profits or gains

Sig more deductions or losses

A claim for the repayment or crediting of tax that has not been or is unlikely to be paid

30
Q

What are the threats?

A

SSAFI

Self interest
Self review
Advocacy
Familiarity
Intimidation

31
Q

Self interest threat

A

Financial or other interests personally or close family

32
Q

Advocacy

A

Promoting a position or opinion to the point that subsequent activity could be compromised

33
Q

Familiarity

A

Close relationship or becoming sympathetic to the client

34
Q

Intimidation

A

Being deterred from acting objectivly due to actuak or percieved intimidation

35
Q

what are the two categories of safeguards?

A

Profession, legislation or regulation - education, training, CPD

Work environment - effective complaint systems

36
Q

DOTAS - Define a promoter (DOTAS) Direct Taxes

A

A person who, in the course of business involving tax services is in any way respnsible for the design or who makes a proposal available for implementation by others

37
Q

DOTAS - What is the deadline for the promoter?

A

5 days from making the information available

38
Q

DASOVIT - (Indirect taxes - for VAT and other taxes) What is the deadline for the promoter?

A

31 days from the point that an arrangement is likely to be made and implemented