Tessa

You are an accountant working as a sole practitioner. Early in 2019 you were approached by Tessa, who was intending to set up in business. You advised her, from a tax perspective, whether to set up her business as a sole trader or as a limited company. Once the business was set up, she engaged you to complete all relevant tax returns for HMRC.

Explain whether you were acting in the role of agent or principal in each aspect of the work performed for Tessa, and the essential features of each of these roles. In doing so, determine whether each role is deemed to be low or high risk work.

Alex Mayfield

Alex is a self-employed accountant working from home. He is married to Lola. Alex acts for Nugent Ltd, preparing the company's financial statements and providing tax advice. Alex has now agreed to act for his wife's new business. Both Nugent Ltd and Lola are tendering for work from the same company and both would like Alex's tax advice on the tender.

Explain Alex's position with regard to the potential conflict of interest and any action that he should take.

Loge Ltd

You work as a trainee at ALP Brothers, a firm of chartered accountants. Loge Ltd has been a client of your firm for a number of years. The managing director has just sent your manager the following email:

'I know that you don't normally act for me personally but I'd really appreciate it if you could find time to prepare my wife's US tax return and disclosures to the US Internal Revenue Service. The current accountants we use are next to useless. They claim that because my wife has American income, her affairs are too complicated for them to deal with. I have faith in ALP Brothers and am sure you will be able to deal with it. If so, we'll be happy to negotiate a good fee as after all I'm the person who decides how contracts are awarded at Loge Ltd and yours is up for renewal next year.'

Explain the ethical issues your manager should consider before replying to this email