We understand that the Supreme Court in the United Kingdom has agreed to grant leave for Prudential to appeal against the Court of Appeal judgement on 13 October 2010. That Court of Appeal decision was that legal professional privilege should not be extended to the clients of Chartered Accountants.

On a related topic, the Australian Government issued a discussion paper entitled Privilege in relation to Tax Advice to consider whether legal professional privilege ought to be extended to accountants and other tax advisers. The Australian Government notes the wide ranging powers of the Australian tax authorities to obtain information from taxpayers. The discussion paper notes the current operation of legal professional privilege in the Australian context. As Australia operates a common law system, comparable to Ireland and the United Kingdom, many of the observations in the discussion paper are relevant here.

Concerns in relation to how the mandatory disclosure regime operates in the Irish context surround legal professional privilege. Revenue apparently felt constrained, because of their interpretation of the legal professional privilege requirement, to operate carve-outs for legal firms offering tax advice which might otherwise be subject to mandatory reporting.

Such a distortion of the agent market, where its unbiased operation is essential in a modern self-assessed tax regime, is not appropriate. The Institute continues to correspond with the authorities in this regard.

The Australian consultation paper may be found at http://www.treasury.gov.au/documents/2005/PDF/DP_Privilege_in_relation_%20to_tax_advice.pdf