My blog on the letter I've sent to my clients on the 'tax amnesty' has proved popular. Actually, that's a massive understatement, which simply proves the point I've made that what accountants want in situations like this is plain straightforward advice and help with practical issues, not someone arguing the legal points about what HMRC are up to.
So let me move on and say what I'll do next if any client comes forward and tells me there might be issues that require declaration. These are:
1) I'll make clear that once they've told me about any issue that will require declaration our relationship will change for good: I cannot undo what is said and I will require them to disclose if that is what I think necessary if our relationship is to continue. I'll tell them this is my professional duty. I won't, of course, mention money laundering issues, but I will seek to make clear the gravity of this issue before they open up;
2) If they do disclose issues that require declaration I will assure them that I will seek to help, but that if I am to do so four things follow on, and they have to respect them. These are:
a) This is a piece of work quite distinct from my normal engagement as their accountant. I will want to issue new terms of engagement for it and these will require:
i) That they pay up-front for all work;
ii) I will issue requests for payment at the start of each month as the matter progresses, and if they are not paid within 7 days work will stop;
iii) The charge rate for this work will be 50% above normal rates for other work to reflect the resources required to undertake it, the overtime I'll effectively be working to fulfil my obligation to them with regard to it and the risk inherent in it.
They can either agree, or back out now (although I'm aware I'll still have the money-laundering risk in that case);
b) They have to meet my time scales for supplying information or I cannot be liable for failing to meet deadlines. I've already indicated in the previous letter that the first deadline, for simply discussing disclosure, is 25 May. My deadline for getting information for the final disclosure deadline will be 1 September, which is the same near enough three month deadline that I use for accepting liability for late submission of tax returns. Let me be clear, I'll be tough on this one and suggest anyone else is. The last thing you want is to be liable for penalties that increase on late disclosure under this scheme. I'll also be emphatic that the supply of information means all information. Anything supplied after that date means my liability for penalties ends.
c) They have to meet me by mid-July to discuss how any potential tax and penalties will be funded. I think this very important and an essential part of the service. If payment cannot be made then the 'amnesty' won't apply anyway and we're looking at other options.
d) I'll reserve the right to say I can't do the work if it is clear that the information supplied shows that there is a risk of criminal prosecution arising from this matter which I do not have the experience to handle. It's not I could not handle this: it's a fact I don't want to.
I know these might look tough - but let's be clear, no one will be in the position of having issues to declare though my fault so I don't care if I'm tough. And candidly, I'll see anyone who needs help as a profit opportunity that can only be realised if they can pay me before HMRC get their hands on them, hence the payment terms.
3) I'll want to record everything. And I mean 'record'. In other words, unusually I'll want client meetings on tape or electronic file to ensure I have fall-back evidence on what was said to me if it all goes wrong later and it transpires disclosure was incomplete. I'm going to make it clear, as I always do in investigation work, that it's the client's reputation that's on the line, not mine.
I've done investigations over many years. As I often tell people when the process starts, by and large they're less enjoyable than getting divorced or moving house three times in a year, and possibly both combined. In the current 'amnesty' anyone making disclosure has a good chance of avoiding all the stress of Revenue meetings and all that gores with it. That's the real bonus they'll get as this represents a massive saving in fee cost. But I'm still not letting them off lightly. It won't benefit me or them to do so. They have a one off chance to get things straight, and I'll see it as my job to make sure they do.