The professional conduct in relation to taxation (PCRT) group has submitted a joint response to the government’s latest consultation on raising standards in the tax advice market. ICAEW is a member of the group and has submitted its own response to the consultation. The joint response is a follow up to the original feedback from the seven individual bodies and focuses on areas of joint interest. 

The government has outlined three possible stand-alone regulatory approaches for raising standards in the tax market. The PCRT group accepts that action is needed to address the behaviour of a small minority of tax practitioners. However, there is no ‘one size fits all’ solution to the problems outlined by the government. Instead, a range of approaches is needed, including better use of existing gateways to report, poor conduct by members of professional bodies for example.  

The PCRT group believes that mandatory professional body membership is the best of the three options, but only if it is appropriately designed and scoped. This builds on the work the PCRT bodies have done to drive high industry standards through developing and embedding PCRT within their membership. The chosen approach must be in the public interest and there must be parity between all individuals and firms providing tax advice and services. The PCRT bodies support mandatory registration of tax practitioners with HMRC, and can share their experiences of appropriate and proportionate checks and the operation of registration schemes with HMRC.  

It is critical that the potential costs of increased oversight and regulation for the professional bodies, their members and taxpayers are quantified. Any increase in costs must be proportionate to the problems that have been identified. Tax advice must remain affordable for taxpayers. In addition to providing initial cost estimates, the government should commit to ongoing monitoring of costs and burdens.  

The outcome of the consultation on the reform of the anti-money laundering (AML) rules is fundamental to any decision on a model for wider regulation. If professional bodies continue to have AML supervision responsibilities, regulation of tax advisers by professional bodies could fit within this model and this would avoid duplication.