ICAEW guidance on tax avoidance is appropriate, says Society of Professional Accountants chairman, while UK200Group president warns of grey area
GROUPS REPRESENTING ACCOUNTANCY FIRMS have reacted with mixed sentiments to the ICAEW’s guidance on tax avoidance.
The UK200Group, which represents a wide range of regional firms, has expressed concerns over the vagueness of the guidance, especially on disciplinary issues. On the other hand, the Society of Professional Accountants (SPA), representing some 1,600 accountants in small practices as well as sole practitioners, has broadly welcomed the move.
The help sheet, released on 27 July, outlines how to spot tax avoidance schemes and advises that involvement in such schemes could see members held as bringing the profession into disrepute.
Peter Mitchell, chairman of the SPA, said he is happy to see how the guidelines are enforced by regulators, despite no definitive line being drawn by the institute.
“From the point of view of the high-street accountant, it is an appropriate move to make as there has been quite widespread concern that artificial schemes were being sold to clients by elements of our profession,” he said.
“The significance is that it [the issue of avoidance] has been highlighted to all practicing accountants and those in business too. [The clarity of the guidelines] is subject to the way in which regulators view it.”
The UK200Group, however, does not share that view.
David Challenger, president of the group and partner at Watts Gregory, warned the ambiguity of what constitutes contrived avoidance was still an issue.
He said: “The ICAEW’s warnings are too grey at present. Where do we draw the line? If we make clients aware of the options available to them and offer a view, are we crossing this line?
“UK200Group members do not promote or recommend tax ‘schemes’, but if a client asks what their options are, then we will tell them and explain the risks involved, which often puts them off from the start.”
He added, though, that the alternative could see clients bypassing their accountants and going straight to scheme providers, unaware of the risks.
“If chartered accountants are made to feel that they have to back off entirely for fear of risking their reputation or membership of a professional body, then this could effectively force tax planning underground,” he said.