This week the taxman clashes with lawyers and by association the Law Society
over legal privilege – the convention that allows lawyers to keep the affairs of
their clients confidential.
The taxman is concerned because lawyers appear to be using legal privilege as
part of their marketing. Their worry is that avoidance schemes are kept under
wraps by legal privilege and that unscrupulous lawyers are now effectively
boasting of the fact through their marketing materials. Not a happy set of
The Law Society is angry and clearly sees HMRC’s stance as an attack on the
principle of legal privilege itself. Accountancy Age could not support that.
Legal privilege is there for good reason – decent professional advice would
not be possible without it. That’s also why we believe some accountants – those
advising on the legal issues of tax – should have the same rights.
But nor can lawyers expect to use such a right to conceal participation in
illegitimate tax management schemes – if that is what is indeed happening. While
the taxman is targeting lawyers it remains to be seen that legal privilege is
being used in such an offensive way.
One thing that lawyers can be sure of is the recently established aggression
to be found at HMRC. But the taxman will need to take great care that it is not
merely fishing based upon suspicions developed from a dislike of the way some
professionals market themselves.
If that proves to be the only basis on which lawyers are targeted the Law
Society might be quite right in claiming an attack on the principle.
Transparency is vital
Accountancy has reached a sad moment. After a handful of years producing
annual reports, three of the Big Four firms have now decided they will no longer
produce them for UK-only operations. Their argument is clear. They are now
larger multi-national organisations and a UK-only report would not make sense.
From our perspective, nor does it make sense to be less transparent than they
once were. For an industry wedded to the principles of transparency and
accountability it can only appear like a contradiction that three of its major
players should reduce their commitment in this area.
It is perhaps true that much of the information is available elsewhere – but
some key elements and some of the detail could be lost. But this is about being
as transparent as possible and behaving in a way that reflects many of the big
clients they claim to serve and the principles they claim to espouse. The
decision to end the reports does not reflect those ideals.
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