European lawyers expressed concern this week about the potential impact on legal professional privilege (LPP) of Organisation for Economic Co-operation and Development (OECD) plans to strengthen the relationship between tax intermediaries and revenue authorities.


A study team set up by the OECD's forum on tax administration outlined draft proposals this summer for an enhanced relationship between revenue bodies, the taxpayer and tax intermediaries, based on greater disclosure and transparency.



The study group, which will publish a full report by the end of the year, insisted that 'the enhanced relationship as it relates to LPP is not about revenue bodies seeking to obtain on a voluntary basis information that it cannot obtain on a compulsory basis'.



Revenue bodies would not need to see legal opinions and other related documents provided to taxpayers by legal advisers, it said. 'Assessing risk requires the disclosure of facts - areas of uncertainty, transactions undertaken and the like - rather than the legal conclusions drawn from those facts by legal advisers.'



But the Council of Bars and Law Societies of Europe (CCBE) has warned that the plans could still dissuade taxpayers from taking advice from the lawyers and other advisers of their choice.



The CCBE said it supported efficient and effective tax administration, but added that it had a 'degree of scepticism as to [the proposals'] workability'.



Its president, Scottish lawyer Colin Tyre QC, said: 'There are many desirable goals stated which are clearly in the public interest in terms of achieving a more effective relationship between revenue authorities and taxpayers, and the intermediaries who advise them.



'But a number of proposals will not necessarily lead to a more effective and efficient tax administration. The CCBE is particularly concerned that the study team's proposal to promote an enhanced relationship based on disclosure and transparency would eventually require lawyers to disclose information subject to legal professional privilege or professional secrecy.'



A spokeswoman for the Law Society said it was monitoring the situation, and that HM Revenue & Customs, which is participating in the OECD project, was 'well aware' of Chancery Lane's position on LPP.



Philip Hoult