Politicians back AAT calls for tax advisers and accountants to be qualified

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According to HMRC, a third of high street accountants and tax advisers are unregulated – as AAT’s Accountable campaign has shown, this is a big problem. Phil Hall, AAT Head of Public Affairs & Public Policy, explains why.

A third of the accountancy and tax advice sector is unregulated – which means it is not required to be properly qualified or even to undertake any continuing professional development (CPD). Neither are unregulated accountants required to hold insurance, be subject to monitoring and review, or even have a complaints process.

This represents a host of serious problems, the biggest being the threat to consumers.

Qualified

It is worth delving a little deeper into the specifics around one aspect of this problem and how it can impact consumers – the complete lack of suitable qualifications.

HMRC research published last year revealed that a staggering 82% of unregulated agents are also unqualified.

Some may question whether this matters but consider this, would you let an unqualified doctor operate on you, an unqualified builder build your house or an unqualified solicitor deal with your legal issues? Of course not, so why should it be any different to accountants and tax advisers?

This regulatory failing is especially stark when you consider the enormous sums of money that can often be at stake when dealing with tax issues. It is not just the level of money involved it’s also the complexity. Those with no qualifications can provide accountancy and tax services to individuals and businesses on issues ranging from budgeting, tax returns and payroll to forensic and management accounting. These are rarely simple and straightforward matters.

Costs

Consumers are far more likely to receive poor, misleading or inaccurate advice from an unqualified and unregulated agent. This can obviously be extremely costly for individuals and businesses alike. Indeed, AAT members have provided countless examples of the problems that unregulated accountants create as it’s our members, and those of other professional bodies, who are often left to pick up the pieces.

There is a cost to HMRC too. Two-thirds of agent-related complaints to HMRC are about the one-third of agents who are unregulated. This has considerable resourcing implications for the nation’s already stretched tax collector.

Likewise, there is also a cost to the taxpayer, not just because of poor advice that could result in missing out on exemptions or reliefs, paying too much or too little tax and suffering the consequences that follow, but because of purposeful tax evasion, egregious avoidance and money laundering activities.

To compound the problem, most people are completely unaware that there is no legal requirement for tax advisers or accountants to be qualified, as our survey last year highlighted – around 60% of the public have no idea that accountants and tax advisers are not obliged to be qualified.

AAT campaigns for change

As regular readers of AAT Comment will know, AAT’s Accountable campaign has long called on Government to hold unregulated responsible for their service. It has long been our position that it should be compulsory for anyone offering paid-for tax and accountancy services to be a member of a professional body, as happens with over 200 other professions in the UK from dentists and doctors to architects and solicitors.

Given AAT and all the other tax and accountancy professional bodies require their members to be appropriately qualified, compulsory membership would mean that all accountants and tax advisers would be fully qualified in the future.

Political support

Last month, AAT commissioned YouGov to undertake independent research into the views of Members of Parliament on the subject.

The findings of this research demonstrated overwhelming support for anyone providing accountancy and tax services to be appropriately qualified, with 82% of MPs stating this should be the case.

It is worth noting that support was equally high among both Conservative and Labour MPs (81% each) which is something Rishi Sunak, Liz Truss and Kier Starmer should take note of!

Furthermore, there was virtually no opposition to the idea, with just 2% of MPs disagreeing.

How AAT members and students can help

Although it’s great that 8 out of 10 MPs agree with AAT that anyone offering paid-for tax and accountancy services should be appropriately qualified, we now need this agreement to translate into action.

If Government is genuinely concerned about consumer protection, saving the taxpayer money and raising standards in the tax advice market, then it needs to compel accountants and tax advisers to join one of the many relevant accountancy or tax professional bodies in the same way that membership is required in over 200 other professions in the UK.

If you agree, why not write to your MP and let them know? If you don’t know who your MP is, you can find out by entering your postcode on the Parliament web site

Further information about AAT’s Accountable Campaign.

Phil Hall is AAT's Head of Public Affairs and Public Policy.

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