French Duncan is accusing HMRC of losing billions of pounds in tax revenue because of a refusal to tackle 'cowboy accountants', who work without accounting qualifications and perform sub-standard work.
According to its chairman, Robert Kerr, HMRC gave a 'knowing look' but nothing more when the mid-tier firm raised concerns over the bogus accounts and poorly completed tax returns prepared by unqualified individuals allowed to practice in the industry.
Kerr considers a crackdown on the cowboys would fit well with the government's plan to introduce a General Anti-Avoidance Rule to the UK in an effort to improve HMRC's ability to tackle tax avoidance.
He said: 'It's scandalous that anyone can set themselves up as an accountant and operate without regulations.
'Just as home owners are required to appoint a qualified conveyancing solicitor to buy and sell a residential property, so it should be a requirement that business owners appoint a qualified accountant to prepare accounts in order to submit tax returns.
'That one simple change has the potential to add on billions of pounds to HMRC's tax take - at the very time when the country needs it most.'
The concern, Kerr and other members of the Institute of Chartered Accountants of Scotland Small Firms Working Group have, is that the public interest is not well served by the existence of unqualified accountants in the marketplace as members of the public are not able to assess whether unqualified accountants are competent and appropriately regulated.
A spokesperson for the ICAEW explained that it was an issue they are highlighting to the Department of Business, Innovation and Skills but added: 'Our focus has been on promoting the value that qualified accountants provide. We have invested a lot over the last twelve months in developing our ICAEW chartered accountant campaign which helps our members differentiate themselves in the market. We have also created initiatives such as the Business Advice Service which helps to promote ICAEW members as advisors to businesses.'