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What does Whitehall's 'Tax Day' mean for businesses?

26 March 2021
Caroline Colliston, Tax Partner at global legal business DWF, commented on the consultation on raising standards in the tax advice market.
"Professional Indemnity Insurance (PII) provides an important safety net for professional businesses offering tax advice as well as their clients. The Government appears to be considering using the insurance market as an addition to its armoury in the fight against tax avoidance and the dark arts of 'bad' tax advice.  

"Given the economic conditions we are facing the lure of increased short-term cash flow offered by some tax planning arrangements may prove too tempting for some businesses and individuals.  The worst case result could be an increase in businesses and individuals falling into the trap of paying for tax advice which is both bad and not insurance backed. "

Commenting on the release of the consultation on notification by large businesses of an uncertain tax treatment, Caroline added:

"HMRC is seeking to impose an obligation on large business to reveal its tax advisory hand where it seeks to rely on an uncertain tax treatment.  Large business is in effect being asked use its tax advisory spend to close the legal interpretation portion of the tax gap. This type of legislation emphasises the benefits of taking advice from a tax lawyer to benefit from professional legal privilege."

Further Reading