What's in a name? Everything apparently
How do you recognise an accountant when you see one?
As much as there should be a witty punchline to this question – it’s no
laughing matter – especially for HM Revenue & Customs, which has set about
defining the term ‘accountant’ for tax purposes.
They’ve had to do this in a bid to stop the poor tax behaviour of managed
services companies. Because these companies are usually run by non-accountants,
the taxman now needs a definition to tell them all apart.
The interesting thing about this is that the profession might finally end up
with a definition of its work, something that the Department of Trade has
consistently refused to do.
When the Irish government said it would create a legal definition last year,
the department insisted there was no need to do the same in the UK. The taxman’s
needs have changed all that. The big question will be whether a defined term for
tax purposes could be used in other contexts.
The government will have to do some dainty footwork if it wants to avoid that
possibility because campaigners will seize upon the development for much broader
use. And as we have argued in the past, their reasons are sound. Restricted use
of ‘accountant’ would go a long way to protect consumers using the providers of
accountancy services. This is especially the case on the high street where
anyone can set up shop and call themselves an accountant.
Last week the Irish delivered on their promise and enacted legislation
protecting usage. There will now be an awful lot of pressure on the UK
government to recognise what now seems inevitable and impose a restriction. It
would leave many people in no doubt about who they were dealing with.