Chartered Institute of Taxation (CIOT / CTA) Professional Skills, Ethics and Law Syllabus

Professional Skills, Ethics and Law syllabus — full chapter and topic list

Expand any chapter to see its topics and sub-topics. This is the whole examinable outline for Professional Skills, Ethics and Law in Chartered Institute of Taxation (CIOT / CTA), not a summary of it.

1. 1

   Professional Conduct in Relation to Taxation

   4 topics

   • Fundamental ethical principles
     • Integrity, objectivity and professional competence
     • Confidentiality and professional behaviour
   • Threats and safeguards framework
   • Dealing with errors and irregularities
     • Disclosure obligations to clients and HMRC
     • Ceasing to act
   • Conflicts of interest and engagement management
2. 2

   Anti-Money Laundering and Regulation

   4 topics

   • Money laundering regulations and the regulated sector
     • Customer due diligence and risk assessment
     • Suspicious activity reporting and tipping off
   • Proceeds of Crime Act obligations
   • DOTAS and disclosure regimes for advisers
   • HMRC standard for agents and PCRT enablers rules
3. 3

   Application and Professional Skills

   4 topics

   • Analysis of complex client scenarios
     • Identifying issues across multiple taxes
     • Quantitative computation under time pressure
   • Advising clients and presenting recommendations
     • Structuring client-facing reports and letters
     • Communicating risk and assumptions
   • Prioritisation and assimilation of information
   • Commercial awareness and practical judgement
4. 4

   Underpinning Law for Tax Advisers

   4 topics

   • Contract and the law of agency
     • Formation, terms and remedies
     • Adviser duties and liability
   • Business structures and company law
     • Directors' duties and shareholder rights
     • Insolvency fundamentals
   • Trusts and the law of property
   • Tort, negligence and professional liability

Professional Skills, Ethics and Law flashcards for Chartered Institute of Taxation (CIOT / CTA)

25 of 54 cards from the Professional Skills, Ethics and Law deck — real questions with worked answers.

1. What are the five fundamental ethical principles in the CIOT/ICAEW Code (Professional Conduct in Relation to Taxation, PCRT)?

   Integrity, Objectivity, Professional competence and due care, Confidentiality, and Professional behaviour.

2. Define the fundamental principle of 'Integrity' in the professional code.

   Being straightforward and honest in all professional and business relationships, including a duty not to be associated with misleading information.

3. Define the fundamental principle of 'Objectivity'.

   Not allowing bias, conflict of interest or undue influence of others to override professional or business judgements.

4. Define 'Professional competence and due care' as a fundamental principle.

   Maintaining professional knowledge and skill at the level required to ensure a client receives competent service based on current developments, and acting diligently per applicable technical and professional standards.

5. Define the fundamental principle of 'Confidentiality'.

   Respecting the confidentiality of information acquired through professional relationships and not disclosing it without proper authority (unless there is a legal or professional right/duty to disclose) nor using it for personal advantage.

6. Define the fundamental principle of 'Professional behaviour'.

   Complying with relevant laws and regulations and avoiding any conduct that the professional knows or should know might discredit the profession.

7. What are the five categories of threat in the threats-and-safeguards conceptual framework?

   Self-interest, Self-review, Advocacy, Familiarity, and Intimidation threats.

8. In the ethics framework, what is a 'self-interest threat'?

   The threat that a financial or other interest will inappropriately influence the professional's judgement or behaviour (e.g. a contingent fee or financial dependence on a client).

9. In the ethics framework, what is a 'self-review threat'?

   The threat that a professional will not appropriately evaluate the results of a previous judgement or service performed by themselves or their firm when forming a current judgement.

10. In the ethics framework, what is an 'advocacy threat'?

    The threat that a professional will promote a client's or employer's position to the point that objectivity is compromised.

11. In the ethics framework, what is a 'familiarity threat'?

    The threat that, due to a long or close relationship, a professional becomes too sympathetic to a client's interests or too accepting of their work.

12. In the ethics framework, what is an 'intimidation threat'?

    The threat that a professional is deterred from acting objectively by actual or perceived pressures, including attempts to exercise undue influence (e.g. threat of dismissal or litigation).

13. What are 'safeguards' in the conceptual framework, and what are the two broad categories?

    Actions that eliminate threats or reduce them to an acceptable level. Two categories: safeguards created by the profession/legislation/regulation, and safeguards in the work environment (firm-wide and engagement-specific).

14. Under PCRT, what should a professional do if threats cannot be reduced to an acceptable level by safeguards?

    Decline or discontinue the specific professional activity, or where necessary resign from the engagement or the firm.

15. Under PCRT, what is the standard for tax planning advice (the 'Standards for Tax Planning')?

    Members must not create, encourage or promote tax planning that sets out to achieve results contrary to the clear intention of Parliament, or is highly artificial/contrived seeking to exploit shortcomings in the legislation.

16. List the five 'Standards for Tax Planning' in PCRT.

    Client specific, Lawful, Disclosure and transparency, Advising on tax planning arrangements (avoid arrangements contrary to Parliament's intention), and Professional judgement and appropriate documentation.

17. What steps should an adviser take on discovering an error or irregularity in a client's tax affairs?

    Establish the facts, advise the client of the error and their obligation to disclose to HMRC, advise on how to correct it; if the client refuses to correct it, consider ceasing to act and whether a money laundering report (SAR) is required.

18. If a client refuses to disclose a tax irregularity to HMRC, what are the adviser's key obligations?

    Cease to act (giving notice), do not provide a further reference that could mislead, notify HMRC that they no longer act (without giving reasons), and consider/make a Suspicious Activity Report under the money laundering rules.

19. When an adviser ceases to act, what may they disclose to HMRC and to a successor adviser?

    To HMRC: only that they no longer act, not the reasons (confidentiality). To a successor (with client consent or professional enquiry letter): factual matters, but confidentiality and the tipping-off rules still apply.

20. What is a 'conflict of interest' in professional engagement management, and the two main types?

    A situation where the firm's or another client's interests are in opposition. Two types: conflict between the firm's own interests and a client's, and a conflict between the interests of two or more clients.

21. What safeguards can manage a conflict of interest between two clients?

    Disclose the conflict and obtain informed consent to act; use separate engagement teams with information barriers ('Chinese walls'); confidentiality agreements; independent review; or, if the conflict cannot be managed, decline/cease to act for one or both clients.

22. Under the Money Laundering Regulations 2017, which professionals are within the 'regulated sector'?

    Tax advisers, accountants, auditors, insolvency practitioners, legal professionals, trust or company service providers, financial/credit institutions, estate agents, and high-value dealers (among others).

23. What three customer due diligence (CDD) measures must a regulated firm carry out?

    Identify the client and verify identity from reliable independent sources; identify and verify any beneficial owner; and obtain information on the purpose and intended nature of the business relationship (plus ongoing monitoring).

24. When must 'enhanced due diligence' (EDD) be applied under the Money Laundering Regulations?

    In higher-risk situations: e.g. a politically exposed person (PEP), a complex or unusually large transaction, a client not physically present, or dealings involving high-risk third countries.

25. What is the role of the Money Laundering Reporting Officer (MLRO / Nominated Officer)?

    The person within a firm to whom staff report knowledge or suspicion of money laundering (internal SAR); the MLRO evaluates and, if appropriate, submits an external SAR to the National Crime Agency (NCA).

See more Professional Skills, Ethics and Law flashcards →

Planning Professional Skills, Ethics and Law for Chartered Institute of Taxation (CIOT / CTA)

Professional Skills, Ethics and Law (Chartered Institute of Taxation (CIOT / CTA)) FAQ