TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Friday, January 25, 2013

U.K. Refuses to Extend Legal Privilege to Accountants

Bloomberg:  Prudential Loses U.K. Top Court Case Over Tax Advice:

The U.K. Supreme Court said tax advice given to Prudential by accountants wasn’t protected by legal privilege and should be disclosed to the British government [R v. Special Commissioner of Income Tax]

The U.K.’s highest court said only advice from lawyers was protected by the privilege, according to a press summary of the judgment today. When tax authorities asked Prudential for information about a tax avoidance scheme created by PricewaterhouseCoopers LLP, the company argued it didn’t have to hand over any documents containing advice from accountants.

“Accountants will be crying into their soup tonight, and tax lawyers will be dancing in the streets,” said Peter Clough, a partner at U.K. law firm Osborne Clarke. “The case presents a clear cut choice for clients: if you want confidential tax advice, you’re better off going to a law firm.”

(Hat Tip: Richard Jacobus.)

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As a CPA, I don't have a problem with this. If a client desires, I can still give confidential advice by running it through the client's law firm by being retained by the firm. Unlike the quoted attorney, I see respectful cooperation between attorneys and CPAs rather than animosity.

Posted by: Woody | Jan 25, 2013 8:36:11 AM

Well as cautious as they think they are being, it sends a message that they don't trust their accountants. In Calgary we have laws that enforce the privileges of accountants.

Posted by: Richard Wright | Feb 12, 2013 7:59:23 AM