Royal Bank of Canada pulls UK tax advice offering
Royal Bank of Canada has stopped offering tax advice to its clients in the UK and Channel Islands as firms grow increasingly wary about providing tax advisory services.
The bank made the decision to cut the service over the summer, and has dismissed claims the decision was related to HM Revenue & Customs’ ongoing work on tax avoidance.
An RBC Wealth Management spokeswoman says: “Earlier this year, we made the decision to no longer offer tax advice to our clients. As the wealth management landscape evolves, we are responding by reducing complexity in our business. Tax advisory services are not a strength of major banks and for this reason we refer this type of activity to third party specialist tax advisers.”
In an August consultation, HMRC said it was planning to subject “tax avoidance enablers” to hefty fines. This would include accountants, advisers or tax planners for example.
HMRC is calling for penalties of either 100 per cent of the tax evaded, or £3,000, whichever is higher, to be applied to each enabler.
Tax experts say the consultation will have given banks offering tax advisory services reason to “pause for thought”.
Helm Godfrey chairman Danby Bloch says: “Those advisers who are still pointing clients in the direction of tax avoidance schemes are taking a long hard look at their future involvement. Most advisers have already distanced themselves as far as possible from such activities. But the HMRC threat to go after advisers and other organisations and people who enable tax avoidance schemes will give pause for thought.”
He says banks have been “prime enablers” in the past, lending money to finance transactions and facilitating payments.
Law firm Collyer Bristow partner James Badcock says it is common for banks to be wary of giving tax advice.
Badcock says: “Banks that I deal with have always been reluctant to give tax advice and have generally made clear they are not giving their clients tax advice and if their clients want tax advice then they should instruct a lawyer, accountant or tax adviser.”
He adds: “Some banks have been involved arrangements that have the purpose of avoiding tax. That is an area that the Government and HMRC are seeking to target.”