Law and Ethics

Question 1

What is the extra set of ethical rules specifically for tax?

Answer 1

There’s a Pile of Compassion-based Rules for Tax

PCRT (Professional conduct in relation to tax planning)

Question 2

Main PCRT standards

Answer 2

P.C.R.T (and law :D)

Professional judgement & appropriate documentation (incl rationale)

Client-specific (incl wider risks & implications)

Relevant Disclosure and transparency

Tax planning (intention of parliment and not artificial)

…Lawful (uncertainty & lawyer if potential litigation)

Question 3

Relevant factors to consider yourself when there is an ethical issue

Answer 3

Fun fact: youre Poisined! (Not a very ethical fact(or)!)

Fundamental principles
Facts & parties
Possible alternatives
Issues involved
Internal procedures

Question 4

If can’t sufficiently safeguard against conflict of interest?

Answer 4

Cease acting for ONE

Question 5

Conflict of interest safeguards

Answer 5

‘our Conflict of Interest Safeguard is to Regularly review our Guy’s’ DICKS

Confidentiality: agreement signed by pners & ees

Info. access prevention procedures

Separate engagement teams

Regular review the safeguards

Guidance to team (security and confidentiality)

Question 6

What is the ICAEW minimum professional indemnity insurance?

Answer 6

1.5m/2.5X/2y

£1.5m
Unless gross fee income under £600k, where it is 2.5X that, minimum £100k

Mamber ceases to act in public practice? Ensure cover lasts 2y

Question 7

Data protection: Covered by what law?

Answer 7

Data Protection Act

Question 8

Data protection: Overseen by what?

Answer 8

ICO

Question 9

Data protection: Deadline and condition for informing after a data breach

Answer 9

72h

If affecting ‘rights and freedoms of individuals

Question 10

Data protection: Penalities

Answer 10

1. Criminal offence
2. Fine
   4x global turnover, min 20m EUR

Question 11

Data Protection Act Principles

Answer 11

Same as EU GDPR

Data protection is such a laugh

Data minimisation (‘Adequate, relevant and not excessive’ for stated purpose)

Purpose limitation (i.e. specified and legit)

Integrity and confidentiality

Storage limitation (Data Retention Policy, justified re. timing)

Accuracy & up-to-date

Lawfulness, fairness & transparency

Question 12

What allows HMRC to challenge tax avoidance arangements

Answer 12

The GAAR (general anti-abuse rule)

Question 13

What does the PCRT recommend you tell clients re. tax avoidance

Answer 13

Reputational issues

(and consider prudential issues for acocunting)

Question 14

What is the extent of tax evasion liability for accounting businesses?

Answer 14

Is is even illegal to Fail to prevent TE (if ee/contractor does it)

Question 15

2 main types of tax evasion?

Answer 15

1. Suppressing info
2. Falsifying info

Question 16

Procedures to reduce exposure to tax evasion

Answer 16

Avoid dodgy companies taking money

Assess weaknesses in control environment & introducing more controls as necessary

Due diligence

Communicating (and training)

Top-level commitment
From senior management re. risks & mitigation

Monitoring and reviewing (procedures introduced)

Question 17

When will MTD begin for income tax?

Answer 17

2024/5

Question 18

Simple definition of money laundering

Answer 18

Handling criminal property, or aware of it

Question 19

2 money laundering regulations

Answer 19

Money laundering regulations and proceeds of crime act

Question 20

Anti money laundering procedures for accounting firms

Answer 20

Remind people to stop counterfeiting money

Record transactions (with each client for 5y)

Procedures: Implement internal reporting procedures

Train staff

Supervisory body registration (e.g. ICAEW)

CDD (and maintain evidence for 5y)

MLRO: Appoint one

Question 21

What is the internal money laundering reporting procedure

Answer 21

MLRO -> NCA -> SAR

Question 22

Money laundering penalties

Answer 22

Fines: Unlimited

Years:
Most offences: 14
Failing to report: 5
Tipping off: 2
Contravention of systems requirements: 2

Question 23

Money laundering defences

Answer 23

DROP the mic at court

Didn’t know/suspect & no training (employer’s offence still)

Reasonable excuse (e.g. safety)

Outside UK (known/believed) & legal there

Privileged circumstances

Question 24

The charge on companies regulated for money laundering (e.g. estate agents) - OBT

Answer 24

Economic crime (anti-money laundering) levy

Question 25

HMRC errors: Main points

Answer 25

1. Intention to benefit? Criminal offence
2. PCRT: Isolated and deminimis? (£200)
   a. Yes: Leave
   b. No: 12 steps

Question 26

The 12 steps from PCRT if a client isn’t reporting a non deminimis error to HMRC

Answer 26

1. Tell HMRC if allowed in engagement letter
2. Ask permission to
3. Warn of not telling
4. Warn of withdrawing
5. Keep written records
6. Withdraw
7. Tell HMRC
8. COnsider withdrawinf from (e.g. audit) report opinions if misleading
9. Tell HMRC misleading if in engagement letter
10. Request permission to
11. Consider MLRO report
12. Carefully respond to (successor firm) professional enquiry letter

Question 27

Procedure for error found in self-assessment done by client/firm

Answer 27

1. Seek authority to amend
   Deadline passed? To notify
2. Warn of consequences of not notifying (interest & penalities)
3. Keep written record of correspondence and actions