An appeal to be heard in the autumn will have wide repercussions for the accounting and legal industries. It involves the insurance company Prudential, which is appealing against a High Court ruling that tax advice given to it by its accountants is not covered by the doctrine of legal professional privilege and therefore must be disclosed to HM Revenue and Customs in connection with the court proceedings.
Even though the judge found similarities between the advice given by the accountants involved and that given by lawyers, he still ruled the advice of the accountants was not privileged.
If the appeal is unsuccessful, even more clients will use solicitors, rather than accounting firms, for their tax advice – especially if they are concerned about the advice they receive not being privileged.