Accountants and legal professional privilege

On 13 October 2010, the Court of Appeal upheld a decision of the High Court that legal advice privilege applies only to legal advice given by a lawyer and not where the advice is given by a non-lawyer, for example, an accountant.???

The issue arose in relation to a claim for judicial review by Prudential plc and its subsidiary. Prudential challenged notices served by HM Revenue & Customs which sought disclosure of advice from its tax accountants on a commercially-marketed tax avoidance scheme. Prudential argued that these documents were covered by legal professional privilege ("LPP"), essentially on the basis that the clients of accountants, when being given skilled legal advice about tax law, should be able to rely on LPP in the same way as they would, had the advice been given by a qualified lawyer.

The main rationale was policy based - to widen?LPP to others will create uncertainty.??It is highly likely, given the importance of the issues involved, that Prudential will seek leave to appeal to the Supreme Court. For the time being, however, taxpayers who obtain tax advice from accountants and other non-lawyers have less protection against having to disclose this advice to HMRC than if they had obtained similar tax advice from lawyers.

Case: R (on the application of Prudential PLC & Anor) v Special Commissioner of Income Tax

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