Professional Bodies Advocate for Mandatory HMRC Registration to Elevate Tax Advice Standards

The UK’s primary professional bodies advocate for mandatory registration of agents with HMRC and believe multiple strategies are essential to address misconduct in the tax advice market.

The Professional Conduct in Relation to Taxation (PCRT) group has submitted a collective response to the government’s latest consultation on enhancing standards in the tax advice sector. As a member of this group, the Institute of Chartered Accountants in England and Wales (ICAEW) has also provided its own response. The joint submission builds on the initial feedback from the seven individual bodies, highlighting areas of shared interest.

The government has proposed three distinct regulatory approaches to improve standards in the tax market. The PCRT group acknowledges the need to address the actions of a small minority of tax practitioners but asserts that a single solution is inadequate. Instead, a variety of methods is necessary, such as improving existing channels for reporting poor conduct by members of professional bodies.

Among the proposed options, the PCRT group considers mandatory professional body membership the most effective, provided it is well-designed and appropriately scoped. This recommendation builds on the PCRT bodies’ efforts to elevate industry standards by integrating PCRT principles within their membership. The chosen approach must serve the public interest and ensure equal treatment for all individuals and firms offering tax advice and services. The PCRT bodies support the mandatory registration of tax practitioners with HMRC and are willing to share their expertise on conducting appropriate and proportionate checks and managing registration schemes.

It is crucial to quantify the potential costs associated with increased oversight and regulation for professional bodies, their members, and taxpayers. Any rise in costs must be proportional to the identified issues, ensuring that tax advice remains affordable for taxpayers. Besides providing initial cost estimates, the government should commit to ongoing monitoring of costs and burdens.

The outcome of the consultation on reforming anti-money laundering (AML) rules is fundamental to deciding on a broader regulatory model. If professional bodies retain AML supervision responsibilities, the regulation of tax advisers by these bodies could be integrated into this framework, thereby avoiding duplication.

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