Skip to content

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

Your firm acts for Mrs Okafor. You advise her that an error in a prior-year return must be disclosed to HMRC. She refuses to make any disclosure. Which is the most appropriate step for your firm?

The firm should cease to act and not disclose to HMRC without permission or a legal requirement, because of confidentiality. It must also consider whether money laundering rules require an internal report or a suspicious activity report. Carrying on as if nothing happened is not acceptable.

  1. ADisclose the error directly to HMRC because the firm has a duty to protect the public interest
  2. BContinue acting and prepare future returns, ignoring the earlier error
  3. CCease to act, and not disclose the error to HMRC unless there is a legal obligation or client permission, while considering the money laundering reporting obligationsCorrect
  4. DReport the client to HMRC and remain as adviser to monitor correction

Explanation

If the client refuses to correct an error, the member should not act on that matter and normally must cease to act. Confidentiality prevents disclosure to HMRC without client permission or legal duty. However, the error may involve criminal property so a money laundering report (SAR) must be considered. Continuing to act while ignoring the error would be inappropriate.

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.

Practise Ethical and professional issues arising from the giving of tax planning adviceFree diagnostic mock

More Ethical and professional issues arising from the giving of tax planning advice questions