Tax avoiders to be deliberately bankrupted.....?..

[V8 Fettler]

Alpinestars said:

V8 Fettler said:

Within the context of this thread, contracts involving major accountancy firms have been "defeated". A better description would be "declared unlawful".

https://www.financialdirector.co.uk/2016/08/01/hmr...

Within the context of this thread, the reality is that the regulatory bodies don't have the firepower to take on the big four http://www.independent.co.uk/news/uk/crime/emb-000...

One sided intra group interest deductions were widespread at the time. I assume you have evidence that GK sued EY on the basis of an unfair contract or some other regulation outside of the contract?

Look at the timescales, it could run for years. The fact remains that a contract based around a scheme in which EY were heavily involved was "overturned".

[Alpinestars]

V8 Fettler said:

Look at the timescales, it could run for years. The fact remains that a contract based around a scheme in which EY were heavily involved was "overturned".

Was it?

Or was the scheme judged not to deliver the tax benefit of a one way deduction?

You do understand the difference don't you?

[V8 Fettler]

Alpinestars said:

V8 Fettler said:

Look at the timescales, it could run for years. The fact remains that a contract based around a scheme in which EY were heavily involved was "overturned".

Was it?

Or was the scheme judged not to deliver the tax benefit of a one way deduction?

You do understand the difference don't you?

How many links referring to "defeat" and "overturn" do you need to see?

[Alpinestars]

V8 Fettler said:

Alpinestars said:

V8 Fettler said:

Look at the timescales, it could run for years. The fact remains that a contract based around a scheme in which EY were heavily involved was "overturned".

Was it?

Or was the scheme judged not to deliver the tax benefit of a one way deduction?

You do understand the difference don't you?

How many links referring to "defeat" and "overturn" do you need to see?

That made me laugh. I'm out of my depth now so I'm oot.

[bga]

V8 Fettler said:

How many links referring to "defeat" and "overturn" do you need to see?

None of those links refer to the contract between Big4 firm & client, merely that it would appear that the advice didn't result in a successful outcome. You are much more likely to find evidence of legal activity due to failures in audit rigour as the auditors accountabilities are more clearly defined.

[V8 Fettler]

bga said:

V8 Fettler said:

How many links referring to "defeat" and "overturn" do you need to see?

None of those links refer to the contract between Big4 firm & client, merely that it would appear that the advice didn't result in a successful outcome. You are much more likely to find evidence of legal activity due to failures in audit rigour as the auditors accountabilities are more clearly defined.

If there is a requirement for professional advice to be good advice then the contractual relationship between the professional adviser and the client is inextricably linked to the involvement of the client in the "overturned" scheme.

Ernst & Young not only advised Greene King re: Project Sussex, they (EY) also devised the scheme:

http://www.independent.co.uk/news/uk/politics/tax-...

[Alpinestars]

V8 Fettler said:

If there is a requirement for professional advice to be good advice then the contractual relationship between the professional adviser and the client is inextricably linked to the involvement of the client in the "overturned" scheme.

Ernst & Young not only advised Greene King re: Project Sussex, they (EY) also devised the scheme:

http://www.independent.co.uk/news/uk/politics/tax-...

Yes. You really, really don't understand this.

I do engagement letters every day of the week and did the same planning for other clients. I have never been sued, and if my firm is ever sued for tax services, it's never because a contract is overturned. It's because the advice was negligent or wrong, pursuant to the EL. Not general contact law.

But I'm sure you'll come back with some other equally irrelevant point/link like the one above. I pointed out x pages ago that HMRC will have the powers to pursue advisors as well as taxpayers. That's still not the same as a taxpayer suing an advisor. Never mind suing outside the contact.

[V8 Fettler]

Alpinestars said:

V8 Fettler said:

If there is a requirement for professional advice to be good advice then the contractual relationship between the professional adviser and the client is inextricably linked to the involvement of the client in the "overturned" scheme.

Ernst & Young not only advised Greene King re: Project Sussex, they (EY) also devised the scheme:

http://www.independent.co.uk/news/uk/politics/tax-...

Yes. You really, really don't understand this.

I do engagement letters every day of the week and did the same planning for other clients. I have never been sued, and if my firm is ever sued for tax services, it's never because a contract is overturned. It's because the advice was negligent or wrong, pursuant to the EL. Not general contact law.

But I'm sure you'll come back with some other equally irrelevant point/link like the one above. I pointed out x pages ago that HMRC will have the powers to pursue advisors as well as taxpayers. That's still not the same as a taxpayer suing an advisor. Never mind suing outside the contact.

I thought you said that you were scuttling off "oot".

You've stated that your firm has been sued for providing negligent or wrong advice relating to tax services, is that what you intended to state? If so, it supports my point that a financial adviser can be sued for providing flawed financial advice.

The "offer" is one of the basic principles of English contract law. If the financial adviser offers to provide good advice, the client accepts the offer, pays a consideration for that advice but the advice subsequently proves to be poor then is that not a breach of a basic principle of English contract law?

[johnfm]

Alpinestars said:

V8 Fettler said:

For financial services' contracts involving consumers where the contract is made in the UK under UK legislation then it has to be fair; enforcement described here: https://www.fca.org.uk/firms/unfair-contract-terms

It would be nonsensical if a weasel-worded contract had precedence over legislation.

They are not weasel-worded. I've never come across a contract by any accounting firm that has been overturned. Have you?

This. Engagement letters are fairly straightforward affairs. They set out a scope (what we have been instructed to do by the client), specific exclusions (what we very specifically do not cover in our advice), the basis of our fees and a fee estimate (or capped, agreed fee), a complaints procedure, limitation of liability/liability cap (usually a few £million depending on our PI limit) and a bunch of standard terms and conditions.

[bga]

V8 Fettler said:

I thought you said that you were scuttling off "oot".

You've stated that your firm has been sued for providing negligent or wrong advice relating to tax services, is that what you intended to state? If so, it supports my point that a financial adviser can be sued for providing flawed financial advice.

The "offer" is one of the basic principles of English contract law. If the financial adviser offers to provide good advice, the client accepts the offer, pays a consideration for that advice but the advice subsequently proves to be poor then is that not a breach of a basic principle of English contract law?

I'm no tax expert. I do have experience of drafting engagement letters when I was in Big4 employment and now run an advisory business where I do plenty of them.

Often a client seeks an opinion. That opinion is provided and the risks/potential drawbacks highlighted. It is down to the client to perform due diligence on the advice. In the EY/GC example the scheme would have to have been sanctioned by the board. The board, as part of their legal obligations as directors, would have had to be comfortable that they understood the risks involved.

The client is paying for an opinion based on their brief. The EL & contract terms will set out exactly what the responsibilities and liabilities are and it is up to the client to do what they want with the info. Unless the contract was deemed illegal then it would be considered binding and so it should be.

[Alpinestars]

V8 Fettler said:

I thought you said that you were scuttling off "oot".

You've stated that your firm has been sued for providing negligent or wrong advice relating to tax services, is that what you intended to state? If so, it supports my point that a financial adviser can be sued for providing flawed financial advice.

The "offer" is one of the basic principles of English contract law. If the financial adviser offers to provide good advice, the client accepts the offer, pays a consideration for that advice but the advice subsequently proves to be poor then is that not a breach of a basic principle of English contract law?

This all started with me saying that a person could sue a tax advisor, and it depends on the terms of the contract, ie the ENGAGEMENT LETTER. You suggested that people sue Ex contract for tax advice, unfair contact terms, wrong coloured shoes etc.etc, I asked you to prove that point, you haven't. And now you've stated that it's down to the contract! Genius.

[Alpinestars]

johnfm said:

Alpinestars said:

V8 Fettler said:

For financial services' contracts involving consumers where the contract is made in the UK under UK legislation then it has to be fair; enforcement described here: https://www.fca.org.uk/firms/unfair-contract-terms

It would be nonsensical if a weasel-worded contract had precedence over legislation.

They are not weasel-worded. I've never come across a contract by any accounting firm that has been overturned. Have you?

This.

Shame you're not a lawyer .......

[anonymous-user]

V8 what you seem to be missing is that the risks of the scheme not working are made clear in what you're required to sign, even if they are downplayed by the salesmen. Failure of the scheme in itself does not constitute bad advice. Caveat emptor.

[johnfm]

Alpinestars said:

johnfm said:

Alpinestars said:

V8 Fettler said:

For financial services' contracts involving consumers where the contract is made in the UK under UK legislation then it has to be fair; enforcement described here: https://www.fca.org.uk/firms/unfair-contract-terms

It would be nonsensical if a weasel-worded contract had precedence over legislation.

They are not weasel-worded. I've never come across a contract by any accounting firm that has been overturned. Have you?

This.

Shame you're not a lawyer .......

Thankfully! The law is an ass, and most lawyers too...

[V8 Fettler]

Alpinestars said:

V8 Fettler said:

I thought you said that you were scuttling off "oot".

You've stated that your firm has been sued for providing negligent or wrong advice relating to tax services, is that what you intended to state? If so, it supports my point that a financial adviser can be sued for providing flawed financial advice.

The "offer" is one of the basic principles of English contract law. If the financial adviser offers to provide good advice, the client accepts the offer, pays a consideration for that advice but the advice subsequently proves to be poor then is that not a breach of a basic principle of English contract law?

This all started with me saying that a person could sue a tax advisor, and it depends on the terms of the contract, ie the ENGAGEMENT LETTER. You suggested that people sue Ex contract for tax advice, unfair contact terms, wrong coloured shoes etc.etc, I asked you to prove that point, you haven't. And now you've stated that it's down to the contract! Genius.

You've stated that your firm has been sued for providing negligent or wrong advice relating to tax services, does that not prove my point?

Your view is that the engagement letter forms the contract and that the terms within the contract cannot be amended, therefore (in your view) the client could only sue within the terms of contract. My view is that the contract set out by the engagement letter is the same as any other contract i.e. the terms can be amended by various means e.g. regulatory body, adjudication or court action.

[V8 Fettler]

fblm said:

V8 what you seem to be missing is that the risks of the scheme not working are made clear in what you're required to sign, even if they are downplayed by the salesmen. Failure of the scheme in itself does not constitute bad advice. Caveat emptor.

Then why pay for professional advice? The concept of professional advice should be based on the transfer of risk in return for a fee, why else would you pay a professional adviser? If a salesman downplays a risk then that should not be at the customer's cost.

Given the previous mis-selling scandals, have not the days of caveat emptor for the professionally-advised purchase of financial products now gone?

[V8 Fettler]

bga said:

V8 Fettler said:

I thought you said that you were scuttling off "oot".

You've stated that your firm has been sued for providing negligent or wrong advice relating to tax services, is that what you intended to state? If so, it supports my point that a financial adviser can be sued for providing flawed financial advice.

The "offer" is one of the basic principles of English contract law. If the financial adviser offers to provide good advice, the client accepts the offer, pays a consideration for that advice but the advice subsequently proves to be poor then is that not a breach of a basic principle of English contract law?

I'm no tax expert. I do have experience of drafting engagement letters when I was in Big4 employment and now run an advisory business where I do plenty of them.

Often a client seeks an opinion. That opinion is provided and the risks/potential drawbacks highlighted. It is down to the client to perform due diligence on the advice. In the EY/GC example the scheme would have to have been sanctioned by the board. The board, as part of their legal obligations as directors, would have had to be comfortable that they understood the risks involved.

The client is paying for an opinion based on their brief. The EL & contract terms will set out exactly what the responsibilities and liabilities are and it is up to the client to do what they want with the info. Unless the contract was deemed illegal then it would be considered binding and so it should be.

Opinion or professional advice? There is a world of difference. As part of due diligence, the directors could take professional advice, EY are described as advisers for this particular scheme, I assume that they extracted a fee, therefore professional advisers.

[Murph7355]

V8 Fettler said:

Then why pay for professional advice? The concept of professional advice should be based on the transfer of risk in return for a fee, why else would you pay a professional adviser? If a salesman downplays a risk then that should not be at the customer's cost.

Given the previous mis-selling scandals, have not the days of caveat emptor for the professionally-advised purchase of financial products now gone?

As long as they're stating the risk then I don't see how it's not caveat emptor. And with investments such as this, I think it fair to expect the investor to have done a bit more homework. Otherwise it smacks of them going for something too good to be true.

You could argue they're not experts. But would you invest in something you didn't understand or couldn't be made to understand?

The mis-selling scandals are a scandal in their own right IMO. My instinct is that only a small proportion of these things were genuinely mis-sold. An awful lot were down to people not paying attention. You can't legislate against stupidity unfortunately. However the banks rolled. Easier to do that than go through the courts on every case IMO, hence the approach they took.

[V8 Fettler]

johnfm said:

Alpinestars said:

V8 Fettler said:

For financial services' contracts involving consumers where the contract is made in the UK under UK legislation then it has to be fair; enforcement described here: https://www.fca.org.uk/firms/unfair-contract-terms

It would be nonsensical if a weasel-worded contract had precedence over legislation.

They are not weasel-worded. I've never come across a contract by any accounting firm that has been overturned. Have you?

This. Engagement letters are fairly straightforward affairs. They set out a scope (what we have been instructed to do by the client), specific exclusions (what we very specifically do not cover in our advice), the basis of our fees and a fee estimate (or capped, agreed fee), a complaints procedure, limitation of liability/liability cap (usually a few £million depending on our PI limit) and a bunch of standard terms and conditions.

In other words, the basis of a contract. You've mentioned PI cover, which answers a point raised earlier and confirms that there is risk of cost consequences for a tax adviser who provides poor professional advice, this could include being sued. Why carry PI cover if there is no risk to indemnify against?

Is the PI cover a statutory requirement?

[anonymous-user]

V8 Fettler said:

Then why pay for professional advice? The concept of professional advice should be based on the transfer of risk in return for a fee, why else would you pay a professional adviser? If a salesman downplays a risk then that should not be at the customer's cost.

Given the previous mis-selling scandals, have not the days of caveat emptor for the professionally-advised purchase of financial products now gone?

I take it you have never bought a stock recommended by a professional? If you had do you think you have legal recourse against them if you lose money?