Reporting advisers

[webberg]

HMRC and the accounting and tax professional groups have a joint policy under which firms who HMRC consider are acting irresponsibly and outside the code can be reported to their professional body who can take action.

The code for the Chartered Institute of Taxation is here.

https://www.tax.org.uk/sites/default...FINAL-CIOT.pdf

HMRC claim that many contractors used tax avoidance schemes. They know that almost all such instances were at the insistence or advice of the contractors advisers.

Logic dictates that tens of thousands of contractors would have taken or been given advice by hundreds, perhaps thousands of advisers. Logic then says that HMRC would have made a suitable number of reports under the code.

A FOI request I completed recently says that between 2010 (the year DR arrived) and 2018, HMRC made a total of 63 reports.

Given that perhaps half of those (at least) were in relation to cases at the more serious fraud end of the spectrum, what does that say?

It says to me that once again HMRC had a tool at its behest but that because contractors were not seen as a cash cow (sorry - tax avoiders) until perhaps 2014 and beyond, because HMRC took their eye off the ball, (I'm being kind), but failed to use it.

I have little sympathy for advisers who were put in a conflict between advice and commission and chose the wrong side, but I'm sure that an HMRC publicity campaign backed by a few hundred reports under an existing code, would have deterred more from doing as they did.

Hindsight is always perfect of course, but if the tool was there, why was it not used?

[Calmbeforethestorm]

HMRC and the accounting and tax professional groups have a joint policy under which firms who HMRC consider are acting irresponsibly and outside the code can be reported to their professional body who can take action.

The code for the Chartered Institute of Taxation is here.

https://www.tax.org.uk/sites/default...FINAL-CIOT.pdf

HMRC claim that many contractors used tax avoidance schemes. They know that almost all such instances were at the insistence or advice of the contractors advisers.

Logic dictates that tens of thousands of contractors would have taken or been given advice by hundreds, perhaps thousands of advisers. Logic then says that HMRC would have made a suitable number of reports under the code.

A FOI request I completed recently says that between 2010 (the year DR arrived) and 2018, HMRC made a total of 63 reports.

Given that perhaps half of those (at least) were in relation to cases at the more serious fraud end of the spectrum, what does that say?

It says to me that once again HMRC had a tool at its behest but that because contractors were not seen as a cash cow (sorry - tax avoiders) until perhaps 2014 and beyond, because HMRC took their eye off the ball, (I'm being kind), but failed to use it.

I have little sympathy for advisers who were put in a conflict between advice and commission and chose the wrong side, but I'm sure that an HMRC publicity campaign backed by a few hundred reports under an existing code, would have deterred more from doing as they did.

Hindsight is always perfect of course, but if the tool was there, why was it not used?

....AND, as anything before 2012 is time barred by statute and they would use the excuse that they could not forsee the LC legislation they are going to get away with it scot free.

The least HMRC could do would be to petition parliament to lift the statute of limitations in these cases so that we could sue the real culprits.

[webberg]

Our view (admittedly we're not lawyers so at best an educated guess) is that an adviser who has failed to give adequate risk warnings is potentially liable and open to legal action for a period that begins with the establishment of the loss.

Failing to warn that arrangements can be overturned by subsequent legislation is (in our uninformed opinion) still a failure.

Bear in mind that the claim will be against the insurance carried by the firm and that remains valid.

[Calmbeforethestorm]

Our view (admittedly we're not lawyers so at best an educated guess) is that an adviser who has failed to give adequate risk warnings is potentially liable and open to legal action for a period that begins with the establishment of the loss.

Failing to warn that arrangements can be overturned by subsequent legislation is (in our uninformed opinion) still a failure.

Bear in mind that the claim will be against the insurance carried by the firm and that remains valid.

It seems that you may have up to 15 years to make a claim.BUT.... it might be incredibly difficult to sue someone who will argue they couldn't foresee the changes in the law.That said, IMHO anyone using a scheme with a DOTAS number ( mine didnt as it predates those) should have been warned they might be attacked in future....or else why assign a number?

[QCApproved]

The case law in Huitson etc was quite clear after 2010 on retrospective law and after the DR rules
Certainly, the shop should have been shut up then by these "experts"

[Calmbeforethestorm]

The case law in Huitson etc was quite clear after 2010 on retrospective law and after the DR rules
Certainly, the shop should have been shut up then by these "experts"

Agreed, anyone in a loan scheme after 2010 is a sitting duck.

[webberg]

With respect, you're missing the point.

You would be suing an adviser - or more strictly claiming against their PI cover - because they failed to give you adequate risk warnings. Instead they bought the line from the promoters about being "legal and compliant".

An adviser from one of the professional bodies will have to show that they told you of the risks, including prospective legislation that has retrospective effect, and that you had understood them.

If they cannot show that (bearing in mind that one well known promoter has already lost such a case in Court), then you have cause and potential claim.

[Calmbeforethestorm]

With respect, you're missing the point.

You would be suing an adviser - or more strictly claiming against their PI cover - because they failed to give you adequate risk warnings. Instead they bought the line from the promoters about being "legal and compliant".

An adviser from one of the professional bodies will have to show that they told you of the risks, including prospective legislation that has retrospective effect, and that you had understood them.

If they cannot show that (bearing in mind that one well known promoter has already lost such a case in Court), then you have cause and potential claim.

Point taken, anyone in a loan scheme after 2010 could have some sort of case, mine would date back to 2005 or even 1996 long before all this stuff was a twinkle in the taxman's eye.....save only the old padmore case which was around then I think.

[webberg]

Point taken, anyone in a loan scheme after 2010 could have some sort of case, mine would date back to 2005 or even 1996 long before all this stuff was a twinkle in the taxman's eye.....save only the old padmore case which was around then I think.

Again, the date you were in the scheme does not matter.

Did you have an adequate risk warning or not?

if not, you have a prima facie case.

[Calmbeforethestorm]

Again, the date you were in the scheme does not matter.

Did you have an adequate risk warning or not?

if not, you have a prima facie case.

No...quite the opposite in fact....but who do I take the case to? the ICAEW ?????