Tax advisers should not be agents of the state

17 February 2016

Andrew Hubbard

Clients engage tax advisers for different reasons. Some, fewer than you might imagine, want to find out how to pay as little tax as possible; some for advice on what to do in specific circumstances, such as a divorce or company sale. But the vast majority simply want somebody who can guide them through the complexities of the system and keep them out of trouble with HMRC.

But they all have one thing in common. They pay an adviser to act on their behalf. They don’t expect that their adviser will be acting on behalf of HMRC. Yet advisers are now going to be required by law to inform their clients, by individual letter or email, about the dangers of not declaring offshore income or gains using wording specified by HMRC. I can well imagine that some clients will be indignant that their adviser has spent time and money passing on what will be seen as HMRC propaganda.

Now I am not saying that the role of the adviser is to be antagonistic to HMRC. Far from it. In most cases it will be in the client’s interest for the adviser to work cooperatively with HMRC to resolve problems. Similarly I have no problem in warning clients about the importance of ensuring that all income and gains are reported. Indeed I would be derelict in my duty if I did not do so. But there is a world of difference between that and me being forced to pass on messages from HMRC. If HMRC want particular messages to be conveyed to taxpayers then they should do it directly.

You may think I am making a fuss about this – after all what is wrong with reinforcing the message about the need to declare offshore income? But where does it stop? Agents are not creatures of the state: neither are they neutral intermediaries between the client and HMRC. The role of the agent is to act in the best interest of his or her client. He who pays the piper calls the tune.

For more information please contact Andrew Hubbard or your usual RSM contact.

Related services