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HMRC’s use of deeds to settle tax enquiries: legal implications

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The CIOT has issued guidance for tax practitioners on the statutory requirements when HMRC proposes using a deed, rather than a standard contract, to settle tax enquiries. The preparation of deeds is a ‘reserved activity’ under the Legal Services Act 2007, which must be carried out by a person, usually a lawyer, authorised under the Act. Carrying on a reserved legal activity without entitlement is a criminal offence and a breach of professional guidelines. The guidance warns practitioners not to expect HMRC to alert them, or taxpayers, to the fact that the preparation of a deed is a reserved activity.