One of the options available to a person signing the Fair Tax Pledge is to say that they have an accountant advising them on their affairs.
If they tick that option they have the chance to download a letter that they can send to their accountant. That letter makes three things clear.
The first is that the person has signed the pledge.
The second is that the signatory expects the accountant to help them fulfil the obligations they have committed to.
And third, by suggesting a change to the terms in the engagement between the accountant and their client it makes the accountant liable if they do anything that does compromise the signatories chosen position e.g. by choosing tax avoidance activity on their behalf that the signatory would not want to partake in. A specific form of wording in the form of a change to the terms of engagement to achieve that goal is made available for download. It's also available here.
I think that for the accounting profession this is pretty significant. First, this may be the first time they might be put at risk of liability by their clients for trying to sell them tax avoidance. Second, they're not used to their clients dictating the terms of engagement, which is just wrong: the client should have a say.
But it's also deeply significant in another way: it also means that the accountant who really does not want to sell their clients tax abuse can get them to sign up to the Fair Tax Pledge and then build this fact into their engagement letter and know that they have then been indemnified for not advising on all the abusive tax arrangements on the market. That's a positive win for hundreds, if not thousands of honest accountants in the UK, and they do exist.
If I was still in active tax practice in any significant way I'd be queuing up to get my clients signed up to the Fair Tax Pledge for just this reason.
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I am sort of surprised by:
2) Not use tax havens to reduce any tax that I owe
I would have expected to see a reference to “secrecy jurisdictions” or, perhaps better still, a reference to booking profits in the country in which the economic activity genuinely takes place.
I would have been inclined to go with something like:
2) Give full consideration to substance rather than form and ensure that profits are recorded in the country in which the economic activity can be reasonably regarded as taking place.
Which no one would have understand
Certainly not the people who read this site.
What proportion of clients end up in abusive tax schemes without realising it (or indeed wanting to be involved)?
It seems to me this would only cover a very small part of the tax avoidance client base – ie the clients who have zero understanding of how tax works, and the clients who are too lazy to read the financial advice before entering schemes.
Any other type of client can simply decline the advice without having to sign a pledge.
Large numbers of accountants are looking for this protection
If an accountant does not agree with tax avoidance and does not want to be blamed for not making a client fully aware of all the tax efficient options out there, then I can see that argument in favour of the pledge works.
I can’t see it the other way round though. Surely the vast majority of the individual clients can simply reject any advice which directs them to tax avoidance products. They don’t need to sign a pledge and get the accountant to acknowledge it? Just say “no”.
Giving unnecessary advice costs money
So savings all round
Fair enough.
I can understand an accountant signing something which relieves them of liability for failing to put the client in the best possible tax position, if that position involves (in the opinion of the accountant) unacceptable tax avoidance.
But I can’t see too many accountants wanting to sign something which makes them liable to damages for loss of reputation etc. as a result of, say, an expose by the media. As we know, the media can trash reputations instantly with one story, and the story may or may not be based on distortions, lies and twisted facts.
I’m also not convinced about your saving costs arguments (for the accountant). Accountants sell tax avoidance schemes knowing that some clients will buy them, and some won’t. They know that the costs of failure to sell a scheme to one client will be recouped by the fees it gets from the scheme it successfully flogged to someone else.
You clearly don’t understand ethical accountants