ACCA Strategic Professional · Advanced Taxation (UK) · Ethical and professional issues arising from the giving of tax planning advice

A client, Mr Doyle, tells his tax adviser during a planning meeting that he has not declared rental income from a UK property in prior years. He asks the adviser to keep this confidential and to prepare only the current-year plan. Which statement best reflects the adviser's position under the Code of Ethics and professional guidance?

The adviser should urge the client to make a disclosure to HMRC. If he refuses, the adviser should consider ceasing to act and whether a money laundering report is legally required. Confidentiality is not absolute, but the adviser cannot simply tell HMRC or amend returns without the client's consent unless law requires it.

1. AConfidentiality is absolute, so the adviser must carry on and never raise the matter again
2. BThe adviser should report the matter to HMRC immediately without speaking to the client
3. CThe adviser should urge Mr Doyle to disclose to HMRC, and if he refuses, consider ceasing to act and whether a money laundering report is required, without disclosing the matter to HMRC directly in other circumstancesCorrect
4. DThe adviser should amend the prior-year returns on Mr Doyle's behalf without his consent