The news that lawyers believe the compensation market for the mis-selling of tax avoidance schemes is worth between £20bn and £40bn comes as no surprise to some of us. We’ve always taken the view that we’d highlight the availability of such schemes when the circumstances were right BUT with a very heavy focus on educating clients as to exactly what risks they were undertaking. Invariably, in every case we looked at, the clients decided not to go ahead. It’s easy to see how some professional advisers could have had their heads turned though. The commissions (or pay-aways as they’re called- commission is such a dirty word!) available for selling the schemes were often eye-wateringly large. With such large sums on the table greed takes over from professional integrity and objectivity. And the position could be even worse for some advisers. Some of the advice they’ve given may in fact be seen as regulated advice and therefore outside if the scope of what the adviser can legally recommend to their clients. In such cases there’s bound to be a question mark over whether professional indemnity insurers will stump up the cash.
So, it looks like the old adage ‘if it looks to good to be true…’ applies again – both for accountants who got carried away and for the clients who placed their trust in them.
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