Tax Professional Negligence: Expert Evidence Guide for Solicitors

Standard of Care

Tax advisers must exercise the skill and care of a reasonably competent tax adviser in their field. The tax expert witness assesses whether advice fell below this standard by reference to PCRT (Professional Conduct in Relation to Taxation), relevant tax law, and HMRC practice at the time the advice was given.

But-For Correct Advice

The expert establishes what advice should have been given and what the claimant's tax position would have been had competent advice been provided. This but-for analysis forms the foundation for loss quantification, the difference between the correct position and the actual tax paid.

Loss Quantification

Recoverable loss includes additional tax, penalties, and interest caused by the negligent advice, subject to SAAMCo scope of duty limitations. The expert must address both the causation question (would competent advice have avoided the loss?) and the quantum question (how much additional tax was incurred?).

PCRT Requirements

Professional Conduct in Relation to Taxation sets standards for tax advisers including competence, integrity, and appropriate advice on material risks. Breach of PCRT standards supports a finding of negligence, though the expert must also address the broader common law standard of care applicable to professional advisers.