The government is partway through a consultation which seeks to raise standards in the accounting and tax advisory profession; currently anyone can set up a business offering these specialist services. According to HMRC’s consultation around 30% of such advisors are not affiliated to any of the accountancy professional bodies, meaning that there is no requirement for appropriate qualifications to be in place and they are effectively unregulated.
The Association of Accounting Technicians (AAT) is one of the accountancy professional bodies calling for increased regulation of the sector, and they have revealed that MPs overwhelmingly support their recommendations.
The YouGov survey, commissioned by AAT, shows that over three-quarters (78%) of 103 MPs surveyed are in favour of introducing compulsory membership of a professional body for anyone offering paid-for tax and accountancy services. This included 75% of Conservative MPs and rose to 85% among their Labour counterparts. Just 6% of MPs disagreed with the proposal.
This echoes the findings of an AAT commissioned survey at the start of the new tax year, which found that most people who had used an accountant or tax advisor thought it should be compulsory for anyone offering paid-for tax advice to be a member of a relevant professional body. The survey also found that six out of ten people were unaware that no formal qualifications are required to practice as an accountant or tax adviser offering paid-for tax advice.
Unregulated agents account for most agent-related complaints to HMRC and contribute to tax evasion and money laundering activities, whilst their mistakes and errors leave many taxpayers with large and unnecessary fines and penalties. Likewise, unregulated agents who overclaim or wrongly claim various tax reliefs cost the Exchequer hundreds of millions of pounds a year.