AAT Guidelines on Professional Ethics
(a) Integrity: a member shall be straightforward and honest in all professional and business relationships
(b) Objectivity: a member shall not allow bias, conflict of interest or undue influence of others to override professional or business judgements
(c) Professional competence and due care: a member has a continuing duty to maintain professional knowledge and skill at the level required to ensure that a client or employer receives competent professional service based on current developments in practice, legislation and techniques. A member shall act diligently and in accordance with applicable technical and professional standards when providing professional services
(d) Confidentiality: not disclose any such information to third parties without proper and specific authority unless there is a legal or professional right or duty to disclose
e) Professional behaviour: a member shall comply with relevant laws and regulations and avoid conduct that brings the profession into disrepute
Disclosure of information to HMRC
There are circumstances where the law allows a breach of the duty of confidentiality.
The main situation where this arises for a tax practitioner is the requirement to produce information to HMRC.
HMRC usually informally requests information and documents from taxpayers in connection with their tax affairs.
If, however, a taxpayer does not co-operate fully, HMRC can request information and documents from a third party, such as a tax practitioner, by issuing a written 'information notice'.
An information notice issued to a third party must be issued with the agreement of the taxpayer or the approval of the Tax Tribunal.
Tax practitioners cannot be asked to produce information connected with tax advice they give to a client. For example, a tax practitioner may have to produce the detailed calculations used in the preparation of the taxpayer's return, say to value an asset, but not their reasons for choosing that method of calculation.
AAT members are bound by legislation to implement preventative measures and to report suspicions to the appropriate authority.
Failure to follow these legislative requirements will often be a criminal offence, leading to a fine and/or imprisonment.
Firms must have appropriate procedures in place to ensure that knowledge and suspicions of money laundering are reported to the firm's Money Laundering Reporting Officer.
A sole practitioner should make a report directly to the appropriate authority such as SOCA.
Individuals may have to pay income tax and/or capital gains tax
HMRC is responsible for the administration of tax
The tax year runs from 6 April in one year to the following 5 April
Some of the rules governing tax are laid down in statute law, while some are laid down in case law
HMRC provides guidance about how tax law works, for example in Statements of Practice, Extra Statutory Concessions and Revenue & Customs Briefs
Tax practitioners have responsibilities to their clients and to HMRC
The ethical Guideline of confidentiality means that a client's tax affairs should never be discussed with third parties without the client's permission
Tax practitioners may be required to produce information to HMRC
A tax practitioner must cease to act for a client who refuses to disclose an error or omission to HMRC, and must make a money laundering report
Money laundering occurs when the proceeds of criminal activities are converted into assets which appear to have a non-criminal origin