The Court of Appeal has rejected the argument that legal professional privilege applies to tax advice given by non-lawyers.

Background

Legal professional privilege ("LPP") consists of two limbs:

Legal advice privilege – this applies to communications with the dominant purpose of seeking or giving legal advice.

Litigation professional privilege – this applies to communications which come into existence with the dominant purpose of being used in aid of pending or contemplated litigation.

The decision in the Court of Appeal related to legal advice privilege.

The advantage of tax advice which is protected by legal advice privilege is that it does not have to be disclosed to any third party (including HMRC).

The decision

The Court of Appeal refused to accept that LPP attaches to advice from accountants and confirmed it is limited to communications between a qualified lawyer and the client. No such protection applies to the same advice given by an accountant or other non-lawyer.

Comment

The decision confirms one of the advantages of seeking tax advice from a qualified lawyer rather than from an accountant or other non-lawyer.

Source: R (on application of Prudential plc and another) v Special Commissioners of Income Tax and another [2010] EWCA Civ 1094.