The majority of MPs would support increased regulation of high street accountants and tax advisers in a bid to protect customers, reveals a survey by the Association of Accounting Technicians (AAT)
There is currently no register of bona fide accountants and tax advisers, with anyone allowed to run a business offering specialist services.
The leading professional bodies all have codes of conduct for the behaviour of accountants but it is not mandatory to be a member of an institute to practice.
AAT is campaigning for a legal requirement that anyone offering paid-for tax advice should be a member of a relevant professional body. There is currently no requirement to be appropriately qualified or to be a member of a professional body and as such a third of the accountancy sector is effectively unregulated.
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 a recent survey published on behalf of AAT at the start of the new tax year, which found that most people who had used an accountant or tax adviser 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 10 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, while 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.
Adam Harper, director of professional standards and policy, AAT, said: ‘The government is proposing to make the UK’s audit sector the most tightly regulated in the world. Yet in stark contrast there is currently no requirement for accountants and tax advisers to be appropriately qualified or to be a member of a professional body, even though unregulated tax agents account for two-thirds of all agent-related complaints to HMRC. This can leave individuals and businesses open to significant financial problems.
‘While it’s a very positive sign that over three-quarters of MPs back AAT’s recommendation that anyone providing paid-for tax or accountancy services should be a member of a relevant professional body, we now need this support to translate into action, including for Treasury ministers to listen to their colleagues and legislate accordingly.
‘This long overdue change would put accountants on a par with nurses, architects and solicitors – who all have to be a member of their respective professional bodies – while benefitting individual taxpayers and businesses as well as the UK economy as a whole.’
The government is currently consulting on proposals to require unregulated accountants to hold professional indemnity insurance, which AAT has previously described as ‘inadequate’. The consultation is currently out for review with a closing date of 15 June for comment.