Think you’re not a Tax Adviser? Think again!
‘a firm or sole practitioner who by way of business provides material aid, or assistance or advice, in connection with the tax affairs of other persons, whether provided directly or through a third party, when providing such services.’
The consequence of the guidance issued in November 2020 was that:
‘If the change in definition to tax advisers that came into force on 10 January 2020 brought your firm into scope of the regulations, you must tell us and apply for approval of your beneficial officers owners and managers before 10 January 2021’
For those of you who don’t ordinarily provide tax advice, the pertinent words in the new definition of a tax adviser are ‘provides material aid, or assistance…, in connection with the tax affairs of other persons, whether provided directly or through a third party, when providing such services.’
The SRA defines material aid and assistance as ‘Non-advisory services that are in scope and that will help the client to comply with their tax responsibilities eg filing papers with HMRC on behalf of a client’.
The SRA’s broad definition of through a third party includes the instruction of a tax specialist, accountant etc on behalf of your client.
In short completing and/or filing an IHT form on behalf of your client, instructing an accountant on behalf of your client to advise on the tax implications of a matrimonial or employment settlement, or drafting a trust to manage a PI settlement will all likely fall within the scope of being a tax adviser.
If you believe you fall within the scope you will need to give consideration to whether your CDD processes (particularly within your private client, matrimonial, and litigation and employment departments) satisfy the requirements of the regulations.
If you are a firm that already provides tax advice, and particularly where you are instructed by another professional on behalf of their client, you may be in scope of the regulations to the extent that you will need to consider carrying out appropriate CDD on the underlying client. According to the SRA the question of ‘who is the client’ when services are provided via a third party is clear, it is always the person whose tax affairs are the subject of the advice, assistance or material aid.
And, not forgetting your obligations to the SRA, you should also give consideration to informing the SRA and seeking the appropriate approval of your beneficial officers, owners and managers by completing the FA10 (for firms newly authorised or newly in scope of AML authorisation) or FA10b (for firms who already have AML authorisation) as soon as possible.
The full SRA guidance can be found at:
If you’re still unsure and would like further guidance or support, why not find out about our Ask Teal service which covers all things compliance: