Wednesday, July 30, 2008

Is it safe for general practitioner accountants to give tax advice?

Last week a regular contributor on AccountingWeb questioned whether or not it is safe for general practitioners to continue to give tax advice. This is in the light of my recent article in which I explained why, two years back, I gave up giving tax advice.

To paraphrase my response on that thread:
Of course it is safe for general practitioners to continue giving tax advice - as long as they recognise their limitations. I didn't want to struggle to keep upto date with day to day issues as was required for me to continue to give tax advice myself. That was my choice.

Over the last few years I've been presenting a talk to accountants around the UK on Avoiding tax related negligence claims. To paraphrase one of the topics I address: If you're accused of negligence the claimant has to prove that you owed them a duty of care and that they have suffered a loss and that the loss arises from your negligence (ie: that you have breached the duty of care). Your defence will often be that you did the same as any 'reasonably competent' accountant would have done in the same situation

'Reasonably competent' accountants comply with the Guide to Professional Conduct for those working in tax (which has been adopted by all of the main accounting and tax bodies). It includes a paragraph:
"Members will from time to time find themselves having to advise on matters which require specialist knowledge. In such circumstances they should be careful not to go beyond their own level of competence and, if necessary, should seek help from a specialist in the field”.

This should surprise no one. And of course, it's one of the reasons why I established the Tax Advice Network as a resource for accountants in general practice. It enables them to access their own choice of cost-effective, vetted, independent tax specialists as and when faced by tricky tax issues or problems that would take them outside their comfort zone.

No comments:

Post a Comment