Often, businesses and individuals will instruct professionals to assist and advise them in relation to their tax affairs the handling of taxation. But, sometimes these professionals can act negligently. Their actions could compromise the financial profile of many people and organisations alike, while potentially landing them in hot water with HMRC. That’s where our team of professional negligence solicitors can help.
Examples of negligent tax advice
Some common scenarios which may result in a claim based on negligent taxation advice may include:
- A professional failing to meet deadlines or submitting incorrect forms, resulting in a client incurring HMRC fines or being liable for paying more tax (say in relation to a pension or shares held)
- Giving incorrect advice regarding tax-efficient schemes or transfers of assets. The consequences of such steps would lead to clients missing out on tax advantages they would otherwise have been eligible for
- A professional acting in a way that has inadvertently prevented a client from benefiting from tax relief entitlements
- Giving incorrect advice on finances themselves, which could lead to tax issues.
It is important to note that there is a duty to mitigate any loss. For instance, where an unexpected position has arisen due to mistake, it may be that a claim can be made to the Court to set aside the relevant transaction, as opposed to suing immediately on its consequences.
We are well versed in assisting with any mitigation effort as well as the negligence claim itself for losses remaining claimable after any mitigation.
Making a negligent tax advice claim
If you wish to file a complaint about your tax advisor, you should speak to any of the following:
- Taxation Disciplinary Board (TDB)
- Federation of Tax Advisors (FTA)
- Chartered Institute of Taxation (CIOT)
Your tax advisor should be a member of one of the above professional bodies.
If you wish to make a professional negligence claim against a tax advisor, you have six years from the incident of negligence, or three years from the date you became aware of the negligence. We understand not all tax advice negligence is realised immediately, and will work with you to make sure your case is sorted properly within the remaining time.
We recommend you get in touch with us as soon as possible after becoming aware of any negligence from your financial advisor. This is due to the complexity of negligent taxation advice cases and how timely they can be.
How our professional negligence solicitors can help
When providing their services appropriately, financial advisors, tax accountants and solicitors can assist greatly.
However, if negligent advice is given, an unexpected tax position may arise. We can help clients fill out tax forms, we can advise on steps to be taken to lower tax obligations, and can handle tax rebates amongst other obligations.
When these services are mishandled, a client can often be subject to losses which could have been otherwise avoidable.
Funding arrangements for tax negligence claims
Whilst we are regularly able to offer a Conditional Fee (‘No Win No Fee’) Agreement to cover any fees incurred during the running of a claim, this kind of arrangement requires a ‘success fee’ to be deducted from the compensation upon the settling of a successful claim.
In cases involving tax advice, often any compensation recovered will be used immediately to deal with the tax position in question. As such, a ‘No Win No Fee’ agreement may not be viable, as it would be preferable for a client to avoid any deductions from the compensation. However, it is important to note that our funding arrangements and terms are bespoke and dependent on the circumstances and merits of any particular claim.