The Court of Appeal has recently made a decision which is of huge importance to clients seeking tax advice. Despite extensive lobbying by the Institute of Chartered Accountants in England and Wales (ICAEW), the Court ruled that legal professional privilege (LPP) could not be extended to accountants in their role as tax advisers.
The case concerned the status of correspondence relating to tax planning advice passing between the Prudential and its accountants. HM Revenue and Customs sought to require the correspondence to be admitted as evidence in a dispute over tax.
LPP applies to make communications between client and adviser 'privileged' and thus not able to be required to be produced in court as evidence in legal proceedings.
The Court confirmed that LPP should only apply to legal professionals.
An appeal to the Supreme Court is expected.