There is justification for the range of regulatory hoops that accountancy and tax advisors need to pass through in order to offer advisory services to individuals and businesses.
At the very least, those in need of advice should be protected from advisors who are clearly not qualified to offer such advice.
The professional bodies, to which most practitioners belong, dictate their own standards of professional conduct. The so-called ‘unqualified advisors’, whilst free of the dictates of a professional overseer, are still obliged to adhere to statutory authority. For example, to register with HMRC for anti-money laundering registration purposes.
The government is committed to turn this regulatory screw. We await with interest the outcome of their consultation – which closed May 2024 – into ‘Raising standards in the tax advice market’. See https://www.gov.uk/government/consultations/raising-standards-in-the-tax-advice-market-strengthening-the-regulatory-framework-and-improving-registration/raising-standards-in-the-tax-advice-market-strengthening-the-regulatory-framework-and-improving-registration.
But there is a cost to compliance. Firms are not paid to observe the dictates of professional and statutory standards. It is assumed that practitioners will comply even though the time spent complying takes away from time available to serve their clients. Regulation is thus considered to be a grudge activity.
And the penalties for non-compliance can be severe; not just a verbal ticking off. In a recent press release, HMRC confirmed that in the six months to 31 December 2022, HMRC issued fines of £3.2m for failures to follow the Anti-Money Laundering regulations.
Unfortunately, as the commercial world becomes ever more complex, the weight of regulation is likely to increase, and will need to be accepted as the price we pay for participation in economic activity framed by the rule of law.
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