1 in 3 tax agents not regulated by professional bodies
One in three tax agents are not regulated, recent research from the HMRC has revealed.
Some 33 per cent of tax agents are not members of professional bodies, which means they operate outside of the regulatory environment, a review into the regulation of tax agents commissioned by HMRC showed.
HMRC does not regulate agents, instead the commercial tax services market is self-regulating. Its review into the sector involved 45-minute interviews with senior officials of 15 professional bodies.
The HMRC found that most tax agents (67 per cent) are members of professional bodies that set standards for the behaviour expected of their members, such as Professional Conduct in Relation to Taxation (PCRT).
It explained that professional bodies have the potential to have considerable influence in setting expectations and regulating tax agent-client relationships.
The HMRC also revealed that although not all professional bodies review their members for adherence to professional standards, a few expressed their concern that members who were expelled from membership on disciplinary grounds could still legally practice.
The professional bodies also admitted to wanting the HMRC to assist them by providing information about common errors made and, if possible, which types of agents are making the errors.
“The professional bodies can then target their information and guidance and adjust their supervisory reviews to focus on these areas,” the HMRC said.
In terms of regulation, the professional bodies that supervised, or reviewed, their members considered that self-regulation generally worked well, and that statutory supervision was sufficient. Of greater concern to many of them were agents that were not members.
“While they may be providing a high-quality practice, there was no guarantee of this and the lack of oversight was a concern,” HMRC said.
Six suggestions were made to bring the ‘unregulated’ into a position where they may be supervised, one of which suggested that all agents should be required to be a member of a professional body.