Chapter EM2788

Published date12 April 2016
Record NumberEM2788

Clients employ accountants to prepare and audit accounts and sometimes to handle their taxation affairs or other matters. In no capacity is the accountant authorised to search for tax evasion (unless specifically required to do so during an enquiry case) - he or she is the agent of the client who is responsible for the accuracy of the information provided.

Occasionally an accountant will discover evidence of tax evasion. If he or she is a member of a professional body, there are strict rules governing their actions in such circumstances. Of course, what an accountant actually does is a matter for the professional body, and is not something an HMRC officer should comment upon. Unqualified agents will act according to the dictates of their personal ethics.

A qualified accountant should do nothing to assist a client to commit any criminal offence. If it seems likely that criminal charges may be made, he or she should advise the client to take specialist legal advice. If there is an anticipated pecuniary settlement, the accountant should explain HMRC’s practice and recommend an immediate full disclosure.

When the client ignores the advice to disclose, the accountant’s actions will depend upon the capacity in which their client retained them. If it included tax matters relating to the offence, the accountant should stress to the client that...

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