Targeting unrepresented agents doing tax-related work
All members of the seven professional bodies (AAT, ATT, ACCA, CIOT, ICAEW, ICAS and STEP) are expected to abide by the PCRT, which has 55 pages of advice and guidance on all aspects of tax-related work.
Since around 70% of agents are represented by a professional body, the HMRC standard for tax agents is aimed at sweeping up those agents who are not represented by a professional body, so HMRC can establish a common standard for all agents.
HMRC also outlines the professional competence expected from tax agents – such as maintaining up-to-date knowledge and preventing errors in their client’s tax claims – and professional behaviour (dealing courteously and professionally with HMRC staff and clear terms of engagement with their clients).
The document also reinforces the importance of accountants adhering to the money laundering regulations and what that means in relation to their work with tax.
The latest standard incorporates the three of the five PCRT principles of integrity, professional competence and due care and professional behaviour. HMRC said these principles are “essential to the relationship” it has with agents.
The PCRT principles not incorporated into the updated HMRC standard for agents are objectivity and confidentiality. HMRC said these principles are essential in the client-agent relationship and that is the role of professional bodies to regulate, not HMRC.
“Not all agents are signed up to the PCRT, so HMRC very sensibly thought we should have something,” said ICPA’s chairman Tony Margaritelli, who has been involved in the Agent Strategy group’s discussions about the standards for agents.
But unlike the substantial PCRT, the comparatively paper-thin HMRC document still leaves what constitutes as aggressive tax planning as a grey area and open to interpretation. “HMRC just says agents must not create, encourage or promote tax planning that is contrary to the clear intention of parliament on it,” said Margaritelli.
“I understand what they are trying to get at, but it is very difficult when you have to put these things into words. I think they’ve put together something small and simple and leaves it open to interpretation – both ways.”