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When I trained as a tax accountant many years ago there was a clear understanding that my duty was to my client and whilst I should not collude in illegal tax evasion or financial irregularity I owed no duty to “rat” on clients to the authorities.

Indeed it was always accepted that anything told to me or discovered by me was privileged. That means it was totally private.

Over the last 40 years that position has been eroded bit by bit and now it seems that accountants not only have a duty to inform HMRC about dodgy activities they may become aware of, they can’t even discuss possible tax planning arrangements – perfectly legal ones – without informing the taxman.

So it was that last week a Judicial Review in the High Court ruled that the Special Commissioners’ were entitled to hold that tax planning advice from an accountant to a client is not protected by privilege. This means that accountants’ are obliged to hand over advice on tax planning schemes to HMRC.

However, tax advice from a lawyer remains privileged and accountants have objected that there is no valid reason to treat tax advice from lawyers differently to that from accountants. The case is expected to be appealed but in the meantime pick your UK based tax advisor with care.

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Category: Taxation

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One Response to “Accountants Denied Privilege”

  1. User 168 says:

    Accountants denied privilege.. Nifty 🙂

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