Treasury rejects regulation clamp on UK tax advisers

The Treasury has rejected MPs’ arguments that the tax industry “cannot be trusted to regulate itself” and has called on professional institutes to “take on a greater lead and responsibility” in relation to tax avoidance, reports the Financial Times.

The call for the institutes representing accountants and other professions to increase their role in setting standards was put forward in a package of measures to tackle evasion and avoidance.

George Osborne, the chancellor, and Danny Alexander, Treasury chief secretary, wrote: “We are now also asking the regulatory bodies who police professional standards to maximise their role in setting and enforcing clear professional standards around the facilitation and promotion of avoidance.”

The professional bodies said they would look at whether their code of conduct needed strengthening, but some expressed doubts about whether they could do much more.

The request for the professional bodies to play a bigger role coincided with the Treasury’s rejection of demands by a cross-party group of MPs for more regulation of the tax profession. The demand was put forward by the Commons public accounts committee after it accused the large accountancy firms of helping clients avoid tax.

Tax advisers who are members of the Institute of Chartered Accountants in England and Wales (ICAEW), the Chartered Institute of Taxation (CIOT) and other professional bodies in tax and accountancy are bound by a professional code of conduct that covers integrity, objectivity, professional competence and due care, confidentiality and professional behaviour.

In a joint statement, the Association of Taxation Technicians and CIOT said: “We believe this code does its job well. It is revised regularly to ensure it continues to be relevant. . . We will take on board the chief secretary’s challenge to look carefully at whether it needs further strengthening in relation to avoidance.”

The ICAEW said its code of conduct in relation to tax advice was revisited and updated regularly. It said: “We are keen to work with government to ensure that the code continues to be fit for purpose and retains public and political confidence.”