Bad Tax Advice
Tax advisors have a duty of care towards clients when giving tax planning advice. If an individual were to receive negligent tax planning advice from a tax advisor, they could find themselves both out-of-pocket and out of favour with HMRC.
It is not a criminal offence to avoid tax using legal investment schemes which are tax efficient – but it is a criminal offence to deliberately or intentionally evade paying tax, including schemes which constitute money laundering or tax fraud.
What is Tax Avoidance?
Tax Avoidance schemes are arrangements set to try and use tax legislation to gain a tax advantage that is not intended by the legislation.
Buying financial products have an element of risk and tax advisors must make sure clients are fully aware of the risks attached to an investment product, as well as the legality of an investment scheme.
Pushing the boundaries of what is permissible is not uncommon. However, financial advisors and fund managers often work on bonuses and commission and it is also not uncommon for financial products and investment schemes to be mis-sold or misrepresented, causing an individual or business financial loss, as well as penalties such as late payment notices and interest – not to mention the stress and worry of dealing with HMRC to sort matters out.
Received bad tax advise? What to do…
First, clients should make a complaint through the accountancy firm’s own complaints handling procedure (CHP).
Secondly, complaints about tax advisors and negligent tax planning advice can be made to the Taxation Disciplinary Board (TDB), or the Federation of Tax Advisors (FTA), or the Chartered Institute of Taxation (CIOT), depending on which professional bodies the tax advisor is a member of.
Thirdly, Clients could consider suing a tax advisor for professional negligence. Individuals have six years from the date of the event constituting negligence – or three years from the date they first realised negligence had occurred – in which to make a claim. Suing a tax advisor is very complex and we would advise seeking the services of a professional negligence solicitor.
Did you know Gold Stag Accounts offer a Digital Records service? We can take your piles of paperwork and create digitalised records, which can be stored on the cloud or kept on a hard drive/USB stick.