ACCA Strategic Professional · Advanced Taxation (UK) · Ethical and professional issues arising from the giving of tax planning advice
Mia, a tax adviser, discovers that a long-standing client, Dev, has submitted several self-assessment returns that omitted rental income. Dev refuses to correct the position with HMRC. What is Mia's appropriate course of action under PCRT?
Mia should advise Dev of the consequences and the need to disclose to HMRC. If he refuses, she must cease acting for him and consider her money laundering reporting obligations. She should not amend returns without consent or report to HMRC directly, because that would breach client confidentiality.
- AReport Dev to HMRC immediately without notifying him, since the duty to HMRC overrides confidentiality
- BContinue acting and say nothing, as the omission is Dev's responsibility
- CAdvise Dev of the consequences of the errors and the need to correct them, and if he still refuses, cease to act and consider her money laundering reporting obligationsCorrect
- DAmend the returns herself and submit them to HMRC without Dev's consent
Explanation
Mia must urge correction and explain the consequences, including penalties. If Dev will not disclose, she must stop acting for him and consider whether a money laundering report to the NCA is required, as the omission may involve criminal property. She cannot unilaterally amend returns or tell HMRC directly without legal basis, so A and D breach confidentiality.
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