Law and Ethics Flashcards
What is the extra set of ethical rules specifically for tax?
There’s a Pile of Compassion-based Rules for Tax
PCRT (Professional conduct in relation to tax planning)
Main PCRT standards
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)
Relevant factors to consider yourself when there is an ethical issue
Fun fact: youre Poisined! (Not a very ethical fact(or)!)
Fundamental principles
Facts & parties
Possible alternatives
Issues involved
Internal procedures
If can’t sufficiently safeguard against conflict of interest?
Cease acting for ONE
Conflict of interest safeguards
‘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)
What is the ICAEW minimum professional indemnity insurance?
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
Data protection: Covered by what law?
Data Protection Act
Data protection: Overseen by what?
ICO
Data protection: Deadline and condition for informing after a data breach
72h
If affecting ‘rights and freedoms of individuals
Data protection: Penalities
- Criminal offence
- Fine
4x global turnover, min 20m EUR
Data Protection Act Principles
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
What allows HMRC to challenge tax avoidance arangements
The GAAR (general anti-abuse rule)
What does the PCRT recommend you tell clients re. tax avoidance
Reputational issues
(and consider prudential issues for acocunting)
What is the extent of tax evasion liability for accounting businesses?
Is is even illegal to Fail to prevent TE (if ee/contractor does it)
2 main types of tax evasion?
- Suppressing info
- Falsifying info
Procedures to reduce exposure to tax evasion
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)
When will MTD begin for income tax?
2024/5
Simple definition of money laundering
Handling criminal property, or aware of it
2 money laundering regulations
Money laundering regulations and proceeds of crime act
Anti money laundering procedures for accounting firms
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
What is the internal money laundering reporting procedure
MLRO -> NCA -> SAR
Money laundering penalties
Fines: Unlimited
Years:
Most offences: 14
Failing to report: 5
Tipping off: 2
Contravention of systems requirements: 2
Money laundering defences
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
The charge on companies regulated for money laundering (e.g. estate agents) - OBT
Economic crime (anti-money laundering) levy
HMRC errors: Main points
- Intention to benefit? Criminal offence
- PCRT: Isolated and deminimis? (£200)
a. Yes: Leave
b. No: 12 steps
The 12 steps from PCRT if a client isn’t reporting a non deminimis error to HMRC
- Tell HMRC if allowed in engagement letter
- Ask permission to
- Warn of not telling
- Warn of withdrawing
- Keep written records
- Withdraw
- Tell HMRC
- COnsider withdrawinf from (e.g. audit) report opinions if misleading
- Tell HMRC misleading if in engagement letter
- Request permission to
- Consider MLRO report
- Carefully respond to (successor firm) professional enquiry letter
Procedure for error found in self-assessment done by client/firm
- Seek authority to amend
Deadline passed? To notify - Warn of consequences of not notifying (interest & penalities)
- Keep written record of correspondence and actions
