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Accountants have a duty to advise on tax loopholes

A recent court ruling appears to suggest that accountants have a duty to advise clients on the options available to avoid paying tax.

The judge hearing a case of professional negligence said the firm should have told their client about an offshore tax avoidance scheme.

The judge found that a ‘reasonably competent’ accountant would have recognised that, as a non-domiciliary, their client was eligible for tax schemes not available to ordinary UK citizens.

In his ruling, the judge said ‘the defendants had a contractual duty to advise the claimant that his non-domiciled status carried with it potentially significant tax advantages.  He likened this duty to refer a client to a tax specialist to that of a GP’s duty to refer a patient, in that if a professional knows there might be possible types of treatment known only to specialists, then that triggers a duty to advise.

The firm is appealing.



Date: 10th July, 2013
Author: Cathy Corns


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