UK tax experts question law firm regulator’s warning over schemes

Solicitors and law firms could face greater scrutiny over aggressive tax avoidance schemes, according to a warning notice issued by the Solicitors Regulation Authority, but tax experts called for clarification of some aspects of the guidance.

“Like the rule of law, tax underpins the effective running of our society and economy,” said SRA chief executive Paul Philip in a September 21 release. “Solicitors play an important role in helping taxpayers meet their legal obligations. The government has been clear that the common assertion that tax avoidance is legal no longer applies.” The SRA regulates 130,000 solicitors and law firms in England and Wales …

“The strongly-worded warning contains some comments that are surprising,” the [ICAEW Tax Faculty] said. “For example it says that when advising a client on a tax avoidance scheme that fails ‘you will leave yourself open to the risk of disciplinary proceedings as well as committing a criminal offence [our emphasis].’ This appears rather sweeping and may need further clarification,” the faculty added.

Judith Freedman, professor of tax law at the University of Oxford, told Tax Analysts that the SRA notice and accompanying press release “do seem to be poorly worded in places.” Read more:

My news story for Tax Analysts, September 22 (paywall)