Albert Einstein once said: ‘The hardest thing in the world to understand is the income tax.’ One can imagine that were he to look at the tax system today his observation would be the same. It is a complex world and one which is hard to navigate. Here we look at how the statute book helps the tax adviser and client by allowing for certain transactions to be pre-cleared with HMRC. But what does that mean?
The first observation is that the management of tax risk for a client is paramount in a tax system that is file first followed by the potential for HMRC enquiry. The approach to managing a project from the adviser’s perspective should look something like:
- scope the work well and make sure you are paid appropriately for the advice;
- issue an engagement letter setting out scope and fees;
- debug the transaction and produce a steps plan...
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