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HMRC updates standard for agents

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HMRC has updated its document on the standards of professional competence and behaviour required of agents. There are expanded sections on tax planning activities, including compliance with money laundering regulations, and a reference to the tax and accountancy bodies’ guidelines on ‘Professional conduct in relation to taxation’ (PCRT).

HMRC first published a standard outlining what it expects of agents in February 2016. This was expanded in August 2016.

In the updated section on tax planning, the standard advises agents to make known to their clients: ‘where there is a material uncertainty in the law, for example, if it is known that HMRC’s view differs or is unknown’. Agents should also make clear: ‘the risk and costs of challenge by HMRC, and any resultant court case’.

Agents should not promote arrangements that:

  • set out to achieve results that are contrary to the clear intention of Parliament in enacting relevant legislation; or
  • are highly artificial or highly contrived and seek to exploit shortcomings in the relevant legislation.

HMRC’s standard shares three of the five fundamental principles in PCRT, which are: integrity, professional competence, and due care and professional behaviour. HMRC notes that the principles of objectivity and confidentiality concern the agent/client relationship, which are the domain of the professional bodies.