Agents would be in firing line if new Bill gets through

Proposed legislation intended to crack down on tax fraud has been condemned as “draconian” and agents would have to be very careful about mentioning money in any conversations.

Critics say that the proposals, from HM Revenue and Customs, would affect even free advice such as a friend suggesting a person should save with an ISA, or the Vicar asking members of his congregation to donate via Gift Aid envelopes rather than just putting cash into the collection plate.

The draft Bill for ‘Tax Agents: Deliberate Wrongdoing’ is aimed at clamping down on any ‘tax agent’ whose advice leads to a loss of tax revenue to HMRC.

It would affect not just professionals such as accountants and financial advisers, but anyone giving some advice such as estate agents and mortgage intermediaries.

But the wording in the draft has been slated by the Chartered Institute of Taxation, which said in an official response: “We cannot emphasise enough how strongly we feel that this legislation needs to be rethought and properly targeted. ”

The CIOT, which has 15,000 members, adds that it is not convinced of the need for extra legislation.

Mike Warburton, of accountants Grant Thornton, said: “This is really draconian stuff. It means everyone will have to tread carefully before they talk to anybody on any financial matter.”

The draft Bill went out for consultation until March 3 but this was extended to April 28 after protests.

A spokesman for HMRC said: “The draft legislation is not intended to target anyone giving fair and honest tax advice.”