Institutes require clear definition of 'public interest' in avoidance fight
Under pressure to take a greater lead in tackling tax abuse, institutes require a more specific definition of 'public interest'
ACCOUNTING and professional services institutes require a better definition of ‘public interest’ if they are going to take a greater lead in tackling tax avoidance as the government hopes.
That’s the view of advisers following increasing pressure on professionals and institutes to stamp out the practice.
The Tackling tax evasion and avoidance proposals, published on 19 March by the Treasury, “[asks] the regulatory bodies who police professional standards to take on a greater lead and responsibility in setting and enforcing clear professional standards around the facilitation and promotion of avoidance”.
In 2012, the ICAEW announced members advising on schemes that could be interpreted as aggressive could be held to be bringing the profession into disrepute.
While the institute is “currently looking at a few cases with regard to tax advice”, none have yet resulted in disciplinary proceedings being brought against a member, it emerged last week.
The institute can only investigate members if a complaint is made, for example from HMRC, or there is sufficient evidence in the public domain to justify an investigation.
To date, HMRC has passed the ICAEW “little information that we have been able to act on”, an institute spokeswoman said in a statement to Accountancy Age, although HMRC said yesterday it expects to “significantly increase” the number of disclosures it makes to professional bodies.
All accountancy institutes have enshrined codes of conduct which ensure members practice with integrity, objectivity, honesty and in the public interest.
But a recent FRC tribunal over Deloitte’s work for doomed car manufacturer MG Rover ruled the current public interest guidelines available from the ICAEW were too vague.
Accountancy bodies’ codes of ethics encompass the principles of integrity of objectivity, and if an accountant acts with those fundamental principles, “it’s hard to see how they aren’t acting within the public interest”, explained Julie Matheson, regulatory and professional discipline partner with law firm Kingsley Napley.
“It’s not entirely clear what [the government] wants the bodies to do in addition to their existing roles, so it’s difficult for regulators to know whether they should be amending their practices or codes of conduct or indeed what sort of conduct they’re expected to be focussing on,” she told Accountancy Age.