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

Hana is a tax adviser. A client wants to implement a scheme which Hana believes is abusive and likely to be counteracted by the GAAR, and the GAAR Advisory Panel has previously given an opinion that similar arrangements are not a reasonable course of action. Which course of action best satisfies Hana's professional and ethical obligations?

Hana should explain the GAAR risks, including counteraction and penalties, and decline to promote or implement a clearly abusive scheme. Her duty extends beyond client instructions to professional standards and the public interest, and avoidance is not automatically evasion that must be reported without discussion.

1. AAdvise the client of the risks, including the GAAR, a possible counteraction and the penalty, and decline to promote or implement the scheme if it is clearly abusive and contrary to professional standardsCorrect
2. BImplement the scheme, because the client has given instructions and advisers owe a duty only to the client
3. CImplement the scheme but not tell the client of the GAAR, to avoid causing alarm
4. DReport the client to HMRC immediately without any discussion, because the client's intention proves tax evasion