Accountants DO encourage tax abuse

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Stuart Jones posted a comment on my piece called 'Do small businesses evade tax?'. He said:

I'm sorry Richard but there are limits:

" ‚Ķ‚Ķthe profession is a key supplier of services that at least assist taxation abuse and that greed is the motivator ‚Ķ".

I assume by "the profession" you mean qualified accountants ie the majority will be ACCA & ICAEW.

Most of that group are decent law-abiding people. If anything they don't do enough to minimse their clients' liabilities! It is the businesses which commit the crime by not declaring the income not the accountants.

Your views are becoming less and less objective by the day.

I could have posted the reply in the comments section, but I'm aware that these are less well read, so offer it here instead:

Stuart

I simply disagree with you. I wholly stand by my assertion, because it is objective.

I could of course mention the words Enron, Andersen, KPMG and so on. I don't need to though. The argument is based on much more widespread evidence, and in this case you supply some yourself.

First of all I am not accusing 'professional' accountants (and it does not really matter to me of which institute they are a member) of breaking the law. What I am saying is that whilst these people think that it is their duty to minimise their client's tax liabilities by whatever means possible they will remain dedicated to tax avoidance, which I consider abusive. The reason is simple. You cannot ethically seek to avoid an obligation imposed by law. This is where we disagree. There are several reasons:

1) By encouraging avoidance accountants expose their clients to the risk that they will evade tax. This is inevitable because no one knows where the dividing line between avoidance and evasion is.

2) By concentrating on the question of avoidance accountants are ignoring the bigger picture which their ethical guidelines do impose upon them. This is to ensure that their client's tax return is as far as they can determine correct. But you, I note pass the responsibility for this to the client. I accept that legally this is so. But ethically the accountant has a duty not to be associated with such returns. That buck passing is not therefore allowed under the ethical rules of the professional institutes.

3) The accounting profession is wrong to think that (and here I quote Dennis Howlett) 'The hard fact is professional accountants are not in business to dispense, arbitrate or take decisions based upon social conscience.' Sorry, but that's exactly what they are required to do. They get their professional status under a charter granted by society which allows them to effectively charge a premium to operate. That charter requires them to operate ethically. Abusing the society which gives them the charter by promoting tax avoidance is not ethical conduct. I'd go further. I call it unethical. I call it tax abuse. And I suggest that the accountants that do it are motivated by greed.

I know what accountants will say. It is that tax avoidance is legal. And my answer is 'So what?' So are a lot of things that people take ethical exception to. The law and ethics are not the same. Accountants have a duty to be ethical which requires them to operate at a level higher than that imposed by law. Only when accountants promote tax compliance and seek in doing their work to ensure that clients pay the right amount of tax (and no more) at the right time in the right place will they reclaim the right to be considered both ethical and a profession. We might then see a significant fall in the number of returns which do include evasion, because right now the prevailing attitude of accountants simply does not encourage them to look for this. That is wrong. They should.

So, sorry Stuart. I'm not losing my objectivity. I just refuse to accept that the perversion called tax avoidance should dominate my thinking as an accountant. I genuinely think the time will come when this will no longer be the case generally. But it looks like there's a long way to go.

Richard