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

An adviser has submitted a suspicious activity report about a client concerning suspected under-declared profits. The client then asks whether the adviser has reported anything to the authorities. What is the correct response?

The adviser must not confirm or reveal the suspicious activity report, and should avoid statements that might prejudice an investigation. Disclosing it risks the tipping off offence under the money laundering rules, which overrides the usual duty to be open with the client.

  1. AConfirm the report, since honesty to the client is paramount
  2. BSay nothing about the report, and avoid any statement that could prejudice an investigation, because tipping off may be an offenceCorrect
  3. CTell the client only the amount reported
  4. DTell the client the report was made but that it will be withdrawn

Explanation

Disclosing that a report has been made, if it is likely to prejudice an investigation, is the tipping off offence under the money laundering rules. The adviser must not confirm or deny it. Revealing the amount or the intention to withdraw is also disclosure of the report's existence.

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