Solicitors face scrutiny over tax planning advice

Solicitors providing tax planning services could face greater scrutiny from the Solicitors Regulatory Authority (SRA) and HMRC as government begins to clamp down on aggressive tax avoidance schemes

The SRA has expressed its concerns that avoidance schemes previously deemed legitimate may no longer be accepted by HMRC.

Solicitors and firms may be involved either directly in advising clients about tax, or handle client matters or transactions that involve them in the design, implementation, organisation or management of tax affairs, schemes or arrangements.

The authority is concerned that some solicitors are facilitating tax avoidance schemes that are aggressive in ways that go beyond Parliament’s intentions.

The warning notice highlights the guidance written by the professional tax and accountancy bodies, Professional conduct in relation to taxation (PCRT) stating that: ‘These standards reflect our own principles, particularly that solicitors must be honest and act with integrity, and uphold the rule of law.

‘Tax practitioners should therefore also be familiar with the PCRT and adhere to its standards.’

Paul Philip, SRA Chief Executive, said: ‘Like the rule of law, tax underpins the effective running of our society and economy. Solicitors play an important role in helping tax payers meet their legal obligations. The Government has been clear that the common assertion that tax avoidance is legal no longer applies.

‘We are concerned that some solicitors are facilitating tax avoidance schemes aggressively in ways that go beyond the intentions of Parliament. Solicitors are in a position of trust, and it is essential that they act with integrity and uphold the rule of law. They should be giving competent tax advice that is in their client’s best interest.’

The SRA’s Warning notice Tax avoidance – your duties is available here.