ACCA Advanced Taxation (ATX) Practice Exam

What must happen if a tax adviser wishes to discontinue acting for a client who refuses to comply with disclosure?

1. The adviser must inform HMRC of the reason

2. The adviser must give the client time to reconsider

3. The adviser must cease representation without specifics

4. The adviser can continue but must report the client

The correct answer is: The adviser must cease representation without specifics

When a tax adviser decides to discontinue representation for a client who is refusing to comply with necessary disclosure requirements, the adviser is obligated to cease representation without providing further specifics regarding the reasons for this action. This is primarily to avoid any potential implications that could arise from divulging the reasons for discontinuation, particularly in sensitive situations involving compliance and ethical obligations. Discontinuance without specifics safeguards the adviser’s position within the professional and regulatory framework, thus protecting both their own interests and those of the client. Maintaining confidentiality and adhering to professional ethical standards is crucial, especially when dealing with matters involving potential non-compliance with tax regulations. Choosing the correct course of action contributes to upholding the integrity of the advisory profession and ensures that the adviser can manage their practice in alignment with both legal and ethical guidelines. This stance aligns with the expectation that tax advisers should act in good faith while navigating situations with clients who may be uncooperative.