In the recent court case of Prudential plc v Special Commissioner of Income Tax, the United
Kingdom’s Supreme Court decided that legal professional privilege (LPP) should
not be extended to clients of non-legally qualified tax advisers, but that the
matter should be looked at by Parliament.LPP is a common law right that has developed over the past 400 years. In other cases, the English legal system requires full disclosure from a party of all the documents which they have which are relevant to the matters at issue, but the privilege is designed to ensure that any person can feel confident in seeking advice about their legal rights and obligations, and be reassured that any information they provide cannot be passed to a third party without their express consent.
LPP currently only applies to clients of lawyers, and also extends to any tax advice they provide – despite the fact that the majority of tax advice is now provided by chartered accountants. Confidential tax advice passing between the latter and their clients will now still have to be disclosed as part of any litigation. Extending the privilege, the Supreme Court held, would cause uncertainty over its scope and inconsistency in its application. That would be likely to lead to what is currently a clear and well understood principle becoming an unclear principle, involving uncertainty.
Read more about this court judgment in the article “UK Supreme Court Blocks Tax Advisers' Legal Privilege” by Jason Gorringe in Global Tax News online (London, January 2013). Tax-News.com is a daily worldwide tax news service with a 45,000 story archive that can be searched for free!
