ICAEW’s Tax Avoidance Guidelines Gets Mixed Responses
Groups that represent accountancy organizations have given mixed reactions to guidance on avoiding tax issued by Institute of Charted Accountants in England and Wales.
The UK200 Group that represents a number of regional entities, stated that they are concerned about that the fact that guidance is vague, especially on issues related to discipline. However, the Society of Professional Accountants, which represents some sixteen hundred accountants in smaller firms as well as single practitioners have appreciated the guidance.
The guidance sheet, which was issued on the 27th of July, describes the ways in which tax avoiding schemes can be identified. It further suggested that those members who indulge in such schemes actually bring disrepute to the accounting profession.
SPA’s chairman Peter Mitchell expressed happiness on the way regulators are enforcing the guidelines, even though the institute has not drawn and specific lines yet.
Mitchell stated that the move is appropriate from the accountant’s viewpoint since there have been a lot of concerns around the fact that accountants were offering such false schemes to customers.
But the UK200Group has a different view on the matter. David Challenger of UK200Group stated that the vagueness of tax avoidance is still a major concern. He further clarified that the warnings given by the Institute of Charted Accountants in England and Wales are not very clear at the moment. Challenger also stated that when we are making the customers aware of different options that they (customers) could avail then we are crossing the line as well.
The members of UK200Group never recommend or promote any type of tax schemes. However, when a client wants to find out about the options available then they do inform them about the risks associated with the schemes.
Challenger also mentioned that in many cases clients bypass their financial accountants and meet the providers of the scheme directly, completely unaware of the associated risks.
He also clarified that if the accountants are given the impression that they will have to stop giving such suggestions simply because they will end up putting their reputation or a professional body’s membership at risk, then taxation planning will start happening underground.