A Court of Appeal ruling this month has confirmed what many lawyers have long known – communications between clients and their accountants are not protected by legal professional privilege.
The recent case of R (on the application of (1) Prudential Plc (2) Prudential (Gibraltar) Limited) v Special Commissioner of Income Tax & Ors has reiterated that when HM Revenue & Customs seeks disclosure of documents from an individual or business taxpayer pursuant to section 20 of the Taxes Management Act 1970, all documents must be disclosed other than those protected by legal professional privilege.
This means that advice provided by or correspondence with accountants, tax advisers or IFAs is not protected by legal professional privilege.
Frank communications between those seeking lawfully to limit their liability to tax and their accountants, tax advisers and IFAs can therefore be obtained, read and analysed by HM Revenue & Customs and can be used by HM Revenue & Customs as the basis for challenging the effectiveness of advice or structures put in place to avoid tax.
To ensure your personal and business tax affairs remain confidential, the only option is for you to instruct lawyers, who are protected by legal professional privilege. Otherwise you may regret your decision when HM Revenue & Customs come knocking.
To discuss your tax affairs with Griffin Law, contact us or email firstname.lastname@example.org.