The new guidance acknowledges the Professional Conduct in Relation to Taxation (PCRT), which has been developed and published by several UK accounting and tax professional bodies, including STEP, and sets out the principles and standards of behaviour expected of all members. Compliance is mandatory for STEP members advising on UK tax matters and failure to comply may result in disciplinary action.
The Law Society explains that it has not adopted the PCRT because the obligations of the solicitors’ profession as a whole are already set out by the law and the relevant regulatory rules governing solicitors. These rules have been formulated over centuries, and they comprehensively describe the relationship between solicitors and their clients. They draw the right balance for the solicitors’ profession by combining the protection of the interests of the client, the interests of the public and the rule of law, while ensuring that access to legal advice is preserved and backed up by an independent regulator.
However, solicitors advising on tax matters are encouraged to be familiar with the content of the PCRT, which overlaps with many of the existing professional obligations on solicitors. For example, the five core principles of the PCRT (integrity, objectivity, professional competence and due care, confidentiality and professional behaviour) are consistent with the legal and regulatory framework that already applies to solicitors.
The PCRT expressly provides that it is not to be interpreted so as to be in conflict with any other professional duties of solicitors. Solicitors that are subject to the PCRT because they are members of one of the signatory professional bodies should therefore comply with the obligations and duties required by the SRA and covered in this guidance in priority over the PCRT.
HMRC also produces standards that set out its expectations of tax advisors. HMRC published a Standard for Agents which sets out its expectations of individuals and businesses that professionally represent or advise taxpayers. Where relevant, solicitors may wish to consider the contents of this or any other HMRC standards, but those standards do not form part of a solicitor’s professional obligations.