Main professional bodies respond to tax regulation proposals
By Susan Cattell, Head of Tax Technical Policy
26 June 2024
The main UK professional bodies have jointly responded to HMRC’s consultation on strengthening the tax regulatory framework.
The Professional Conduct in Relation to Taxation (PCRT) group is made up of representatives of the Institute of Chartered Accountants of Scotland, the Institute of Chartered Accountants in England and Wales, the Association of Accounting Technicians, the Association of Chartered Certified Accountants, the Association of Taxation Technicians, Chartered Institute of Taxation, and the Society of Trust and Estate Practitioners.
PCRT is a co-authored code setting out the principles and standards of behaviour that all members, affiliates and students of the PCRT bodies must follow in their tax work.
The PCRT group has submitted a joint response to the latest HMRC consultation on improving standards in the tax advice market. We also submitted our own response.
PCRT group response
The response focuses on key areas of common interest and agreement. The group welcomes the recognition in the consultation that most tax practitioners who provide tax advice and services are competent and adhere to professional standards. However, the group accepts that there is a small minority of practitioners who lack competence and can be unprofessional and/or unscrupulous. Action is needed to address the conduct of these practitioners but there will be no “one size fits all” solution to the wide-ranging problems outlined in the consultation.
Mandatory registration of tax practitioners with HMRC
The PCRT group agrees that mandatory registration with HMRC is a sensible first step in reforming regulation. PCRT bodies undertake many checks to ensure firms and members are appropriately registered for our Anti-Money Laundering supervision schemes and practice licences (where required). Collectively, we have considerable experience to share with HMRC on appropriate and proportionate checks and the operation of registration schemes.
Preferred regulatory model
The consultation also outlined three potential regulatory models: Mandatory membership of a recognised professional body, joint HMRC–industry enforcement and regulation by a separate statutory government body.
The joint response supports the first option (mandatory membership of a professional body) as the best model for regulation, but only if it is appropriately designed and scoped. It must be in the public interest and there must be parity between all individuals and firms providing tax advice and services. This approach builds on the work of the PCRT bodies to drive high industry standards through developing and embedding PCRT within our membership. Using existing mechanisms for monitoring and enforcement is likely to be the lowest cost option and the least disruptive for those who already meet high standards.
The potential costs of any increased oversight and regulation, for professional bodies, their members and the taxpayers they advise need to be quantified. Any increased costs should be proportionate to the identified shortcomings in the existing market, otherwise there is a risk that tax advice becomes unaffordable for many taxpayers.
Next steps
If the government decides to proceed with the proposals, we anticipate further consultation on the details of the new regulatory model and would welcome the opportunity to take part in future discussions with HMRC.
Let us know your views
ICAS responds to many tax calls for evidence and consultations, as well as producing tax policy papers and reports. We also regularly attend meetings with HMRC at which service levels, delays and other issues are discussed, and we raise problems being encountered by members. We welcome input from members to inform our work; email tax@icas.com to share your insights and feedback.
