Module 1 Flashcards
What is the role of HM Treasury in the tax system?
HM Treasury is the UK government department responsible for the strategic oversight of the UL tax system, including setting tax policy and managing the government’s budget requirements.
What is the role of HMRC?
Once the tax policies created by HM Treasury become law, it is the job of HMRC to administer the tax law. Their responsibilities include collecting and administering various taxes, such as income tax, national insurance contributions and have broadened over the years to include the enforcement of the National Minimum Wage, the collection of student loan repayments and the administration of tax credits and child benefit.
What it tax evaison?
Tax evasion is where a taxpayer breaks the law to reduce their tax.
What is tax palnning?
In general terms, tax planning is what a taxpayer will attempt, and is entitled to do in order to reduce their tax liabilities within the law as parliament intended it to apply.
Eg Investing in an ISA
What is tax avoidance?
‘unacceptable’ tax avoidance (sometimes described as ‘aggressive tax planning’) will often involve some form of contrived or artificial arrangement which aims to produce a tax advantage, rather than any other specific commercial outcome.
What are the 5 Fundamental principles that all members of ICAS must follow?
PIPCO
Professional competence and due care
Integrity
Professional behaviour
Objectivity
Confidentiality
What are the 5 standards for Tax Planning?
1) Client Specific
2) Lawful
3) Disclosure and transparency
4) Tax planning arrangements
5) Professional judgement and appropriate documentation
What can HMRC fine is they can prove a tax advisor has been dishonest (ie in breach of the first ethical principle)?
£50,000
What should the contents of a tax engagement letter address?
1) Identify the first tax year for which the advisor is responsible?
2) The extent, if any, to which the adviser will be responsible for tax years prior to the appointment.
3) The responsibility of the taxpayer to provide information to the tax advisor on a timely basis
4)The scope of the adviser responsibility’s
5)The tasks for which the adviser has been appointed
6)Fees and billing arrangements.
7)The requirement to report to the National Crime Agency (NCA) any suspicions, knowledge, or reasonable grounds for suspicions or knowledge of money laundering from the proceeds of any crime. This includes the proceeds of tax evasion.
What guidance is in PCRT about giving tax planning advice?
1.A member must balance their responsibilities to serve their clients with professional competence and due care with their duties to comply with relevant laws when giving tax planning advice.
2. A member must never be knowingly involved in tax evasion.
3. Guidance exists in PCRT to help the member avoid situations involving ‘unacceptable’ tax avoidance.
Tax planning advice must comply with PCRT standards.
