Pictured above: Paul Malin, tax director at BTG Tax in
Birmingham
Professional advisers who do favours for friends and family
could inadvertently risk getting themselves in trouble with the
taxman, an expert has warned.
Paul Malin, tax director at Birmingham-based BTG Tax, said all
professionals should never "drop their guard" if they wanted to
avoid the wrath of HM Revenue & Customs (HMRC).
His comments follow a Government pledge to step up the war on
tax evasion. It has made available an additional £900
million to HMRC to tackle tax avoidance and fraud.
In addition, it is the coalition government's target to increase
tax prosecutions fivefold.
HMRC is said to be in particular probing offshore accounts 3-5
years old, working off a list of 6,300 names it has obtained, of
which about half were advisers, family members or those with power
of attorney.
Advisers, pointed out Mr Malin, would take in a wide range of
professionals including accountants, solicitors and bank managers.
Moreover, people with power of attorney could also tend to be
professionals.
The problems can potentially arise where a professional adviser
might agree to help family, friends or fellow business colleagues,
where perhaps as a result of not being quite as meticulous as
normal, they are too relaxed in their approach and have not briefed
themselves fully about all the circumstances at the very
outset.
"It might simply be that you casually take on the job for that
aged aunt you only ever see at Christmas - you have known her for
many, many years so how could there be an issue.
"But are you really aware what anyone may have been up to.
Have you properly checked out her financial affairs or simply
taken her word on trust.
"The aged aunt may not be the frail old soul that she looks -
hence she never told you about that overseas bank account she has
kept "just in case" or as a "pension". And before you know it HMRC
has now discovered her little secret and you are suddenly at the
centre of a tax investigation.
"My message is - make sure you know what you are taking on.
If you have asked questions, were they the right ones?
Was everything done in a rush at the last minute?
"It's no good trying to maintain you never knew anything about
it."
But, said Mr Malin, even professional advisers needed a "wake-up
call" now and then.
"This is that wake-up call."
For more information about Begbies Traynor, please visit their
website here: www.begbies-traynorgroup.com