Accountants claim historic win as government looks to crack down on poor tax advice

AAT is hailing an 'historic' victory contained in yesterday's Spring Statement as the government moves toward making tax practitioners more accountable.

AAT has welcomed the first public commitment made by a UK government to seriously consider mandatory membership of a professional oversight body for tax practitioners. The charity is the leading voice for accounting technicians, bookkeepers and Licensed Accountants working in tax.

"This is a big moment in our long-running campaign to bring in much-needed protections for consumers in the tax advisory sector. It's nothing short of an historic win," said AAT chief executive Sarah Beale.

"We are one step closer to making all tax practitioners accountable, some of whom are currently operating outside enforceable professional standards." She said both the public and the tax profession stood to benefit from a level playing field.

"AAT has a proud record of driving high standards in the accountancy sector. Part of our success has been in working with practitioners to lift their performance where it has fallen short, providing education and upskilling opportunities for them to lift their game and match public expectations," said Beale.

Consumers exposed to unregulated industry

As part of the government's Spring Statement, HMRC laid out details of its long-awaited consultation into raising standards in the tax advice market.

AAT has campaigned for more than a decade for action on a sector it believes poses an unnecessary risk to the public. The charity is concerned that a full third of accountants and other professionals providing tax advice remain unregistered with a professional body with oversight abilities such as AAT.

While compulsory membership is just one of three possible regulatory models the government is considering, for AAT's Director of Professional Standards and Policy Adam Harper the choice is clear.

"We know that the public expect a professional, honest service when they engage accountants and tax advisory agents. Most are shocked when they hear there's no method of recourse for consumers using unregulated, unsupervised tax practitioners, should things go wrong."

The impact, AAT says, is obvious to their Licensed Accountant members who are often brought in to clean up the mess after an unregistered tax advisor has provided incorrect guidance to a client. Research conducted by AAT in 2021 found that more than half (51%) of small businesses surveyed had to hire a qualified accountant to correct mistakes made by an unqualified accountant.

Without monitoring and enforcement in place to take unregulated practitioners to task when there are cases to be answered, the public remain entirely exposed, said Harper.

"The consequences can be dire for consumers. Incorrect tax guidance can lead to significant HMRC fines and even result in prison time," he said.

Profession needs to be at the heart of an accountable tax sector

Harper, who has been leading AAT campaigns for a more accountable tax sector since 2010, said the government's consultation was an important opportunity for AAT members to have their say about the role professions can play in setting standards, upholding ethical conduct, and protecting consumers in the public interest.

"The public stand to benefit the most from a properly regulated tax advice sector that has responsible professional bodies at its heart. It's our collective reputation on the line, so we want to make sure consumers are not getting ripped off or being sold a pup in terms of advice."

He said that when bad operators acted unethically or took advantage of consumers, they also damaged the wider accountancy profession, which businesses and consumers rely on.

"It's in the interests of the whole profession that every person engaged in tax advisory is conducting themselves in ways that uphold high professional standards and protect consumers. That's why the profession needs to be at the heart of the regulatory solution being developed to fix this concerning situation.

"Mandatory membership would ensure high standards, consumer protection, and a level of consistent oversight regardless of a particular practice's size.

"AAT and our members have been banging the drum through our Accountable campaign over the years for a very simple, but very powerful principle: by making the rogue operators accountable for their conduct we can ensure consistent, reliable professional standards consumers can trust," concluded Harper.

Media contact

AAT media contact:  +44 (0)797 4032099, media@aat.org.uk.

More information

AAT spokespeople Sarah Beale and Adam Harper are available for interview on request.

• Find out more about AAT's Accountable campaign (PDF).
• More information on HMRC's consultation can be found on GOV.UK: Raising standards in the tax advice market - strengthening the regulatory framework and improving registration.