What are the core roles and functions of HMRC’s accountants?
Advisory accountant: As an advisory accountant, my main role is to advise tax specialists on technical accountancy matters, particularly where the accounting adopted by a taxpayer has an impact on the tax they pay. I also provide training to tax specialists to provide them with an awareness of relevant accountancy matters.
Forensic accountant: HMRC forensic accountants mainly work on criminal cases, analysing and interrogating large amounts of data or records and providing expert opinion evidence if required. We produce work that stands up to the scrutiny of Court and evidential standards, and distil complex cases down to the simplest terms possible, for the benefit of third parties with a wide range of knowledge and experience (ie investigators, tax specialists, CPS, Court, or a jury etc).
What skills do you need to be an HMRC advisory or forensic accountant?
Advisory accountant: You need a strong technical knowledge of accounting standards but equally as important is the ability to explain them in an understandable way to the various non-accountants you engage with (potentially including tax tribunal judges!). The commercial skills you bring from previous roles in practice or industry can also be valuable in helping tax investigation teams understand the information and explanation provided by taxpayers.
Forensic accountant: Forensic accountants need to be skilled at analysis and have strong commercial and technical knowledge. You also need to have an inquisitive mindset and be prepared to think outside the box. It’s important to approach every case without any preconceptions or assumed methodology in mind. It can sometimes be more important to look for what isn’t there, rather than relying solely on the information provided. As forensic accountants, we have learned not to accept information on face value. We obtain supporting documents wherever possible to provide a robust accountancy opinion based on factual evidence.
How have these evolved over time?
Advisory accountant: There’s an increasing focus on the tax risks arising in international areas, such as transfer pricing. This means the commercial skills I mentioned earlier are increasingly useful for assessing the rationale provided for taxpayers for certain transaction structures, and also for reviewing internal financial information such as management (rather than statutory) accounts when assessing cost allocation methods. Recently, it has been a relatively busy time with the introduction of new accounting standards such as FRS 102, IFRS 9, 15 and 16, which have given rise to new training needs and also compliance work in reviewing taxpayers’ transitional adjustments.
Forensic accountant: Criminality and tax evasion have become more complex and HMRC accountants seek to understand where they can best assist on cases and give advice on emerging issues. By proactively advising and upskilling HMRC officers on certain key areas of risk, we can help encourage officers to request the right information, from the right sources, at the right time – minimising any potential disruption to day-to-day activities of taxpayers and their agents and potentially resolving tax enquiries and investigations sooner.
What are the main challenges being faced by HMRC accountants?
Advisory accountant: As an advisory accountant there are always new technical developments to stay up to date with. We also spend time considering how we are going to align our work and priorities with those of HMRC as a whole, such as a current move to focus more on ‘upstream’ activity (trying to promote compliance and prevent non-compliance before it occurs through a range of activities including education, nudges and prompt campaigns).
Forensic accountant: The perception of HMRC from those external to the organisation. HMRC accountants act as independent experts and may be required to produce a joint statement with an accountant appointed by the claimant or defence. As experts, we work independently with integrity and professionalism, to fulfil our duties to the Court.
A current BEIS consultation outlines government proposals to restore trust in audit and corporate governance. This paper emphasises the importance of a holistic approach, with all stakeholders having responsibility to drive change. How can advisory and forensic Accountants at HMRC play a role in building trust in the accounting profession?
Advisory accountant: We support HMRC’s agents work where it considers making referrals to institutes and regulators if it observes improper behaviour from agents in conducting their clients’ tax affairs. We also interact with other areas of government where necessary to provide our insight into what accountants in industry or practice are doing and the benefits that they bring.
Forensic accountant: Where appropriate, action can be taken against dishonest agents who facilitate fraudulent activities by the businesses or individuals they act for. This preserves the integrity of the honest majority and improves public confidence in that accountants are held to a high standard, with a professional duty of care.
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