ACCA Strategic Professional · Advanced Taxation (UK) · Ethical and professional issues arising from the giving of tax planning advice
Dev, a client of your firm, tells you he has deliberately omitted £40,000 of rental income from his previous year's self-assessment return and refuses to disclose it to HMRC. Under ACCA's ethical guidance (PCAP), what should the firm do?
The firm should urge Dev to disclose the omitted rental income, and if he refuses, stop acting for him and consider a suspicious activity report to the NCA under money laundering rules, taking care not to tip him off. Confidentiality does not override that duty.
- AContinue to act and file future returns, but quietly exclude the rental income from the firm's own working papers
- BInform HMRC immediately of the omission without first speaking to Dev
- CUrge Dev to disclose, and if he refuses, cease to act and consider making a money laundering report to the NCA, without tipping off DevCorrect
- DContinue to act because client confidentiality prevents any further action
Explanation
The firm must encourage correction, and if the client refuses it should cease to act. The suspected proceeds of tax evasion are criminal property, so a suspicious activity report to the NCA must be considered, without tipping off. Informing HMRC directly would breach confidentiality outside the legal reporting route, and confidentiality does not override the statutory reporting duty.
Did you get it right without looking?
One question tells you little. A timed set on Ethical and professional issues arising from the giving of tax planning advice shows your real accuracy, how long you take and where you lose marks.
More Ethical and professional issues arising from the giving of tax planning advice questions
- Marlow Ltd's advisers promote a scheme that is a notifiable arrangement under the Disclosure of Tax Avoidance Schemes (DOTAS) rules. Who is …
- Priya, a tax manager, acts for Kestrel Ltd and also for its managing director, Mr Hale, personally. Kestrel Ltd is considering paying Mr Hal…
- Which statement is correct about a tax adviser who ceases to act for a client and is asked by the incoming adviser for professional clearanc…
- Mia, a tax adviser, discovers that a long-standing client, Dev, has submitted several self-assessment returns that omitted rental income. De…
- Mira, a tax adviser, is asked by a long-standing client to confirm to a prospective lender how much tax the client paid last year. The clien…
- A tax adviser is asked by HMRC for client working papers during an enquiry into a client's return. The client has not agreed to disclosure a…