Open consultation

Enhancing HMRC's powers: tackling tax advisers facilitating non-compliance

Published 26 March 2025

Summary

Subject of this consultation

This consultation discusses options to enhance HM Revenue and Customs’ (HMRC) powers and sanctions to take swifter and stronger action against professional tax advisers who facilitate non-compliance in their client’s tax affairs. It proposes a complementary suite of potential measures to more effectively review and sanction professional tax advisers whose actions contribute to the tax gap or otherwise harms the tax system.

Scope of this consultation

This consultation seeks views on:

• whether HMRC’s current powers are effective in dealing with non-compliance facilitated by tax advisers
• enhancing HMRC’s powers to investigate tax advisers where HMRC suspects their actions have led to an inaccuracy in a taxpayer’s document
• to enable HMRC to request information from tax advisers where HMRC suspects misconduct
• introducing stronger penalties against tax advisers who contribute to the tax gap
• publishing details of HMRC sanctions on tax advisers
• disclosures to professional bodies regarding concerns about their members’ activities that falls below the normal disciplinary investigation thresholds of professional bodies

The government is undertaking a wider review of the tax administration framework. These wider powers covered by that review, such as information powers for taxpayers and third parties within Schedule 36 Finance Act 2008, are not in scope of this consultation. However, some are referred to in this consultation to illustrate how the enhanced powers could work.

Who should read this

Anyone who may receive or provide tax advice or offers services to third parties to assist compliance with HMRC requirements. For example, accountants, tax advisers and promoters, legal professionals, payroll professionals, bookkeepers, repayment agents, specialist agents, such as research and development agents, insolvency practitioners, financial advisers, charities and other voluntary organisations that help people with their tax affairs, professional and regulatory bodies, and clients, or potential clients, of all those listed above.

Duration

The consultation will run for 6 weeks from 26 March 2025 to 7 May 2025.

Lead official

The lead official is M. Romanovich, Intermediaries Directorate of HMRC.

How to respond or enquire about this consultation

You can respond via this survey.

Enquiries can be emailed to raisingstandardsconsultation@hmrc.gov.uk or sent by post to:

‘Enhancing HMRC’s powers: tackling tax advisers facilitating non-compliance’ consultation
Agent Policy Team
HMRC
Benton Park View
Longbenton
Newcastle upon Tyne
NE98 1ZZ

Additional ways to be involved

HMRC will be holding a limited number of meetings with interested parties. Please email raisingstandardsconsultation@hmrc.gov.uk if you would like to be involved.

After the consultation

HMRC will publish a summary of responses as soon as possible after the consultation period.

Getting to this stage

Tax Agents: Dishonest Conduct legislation in Schedule 38 Finance Act 2012 came into force in 2013. This gave HMRC the powers to issue a tax adviser who had engaged in dishonest conduct with a conduct notice, to obtain working papers from them, and to impose penalties (where appropriate).

Responses to the consultation on strengthening the regulatory framework of the tax advice market and improving tax adviser registration, which ran from 6 March 2024 to 29 May 2024, highlighted that HMRC could do more to take swifter and stronger action against tax advisers who have facilitated their clients’ tax non-compliance. As outlined in the consultation response, the government believes that HMRC could take swifter and more robust action against tax advisers who facilitate non-compliance in their clients’ tax matters. This consultation is on specific proposals to enhance HMRC’s powers in this regard and is part of a wider set of policies aimed at closing the tax gap.

Previous engagement

HMRC met with stakeholders as part of the consultation into strengthening the regulatory framework and improving registration. HMRC also meets regularly with professional bodies and other external stakeholders.

Foreword

At Budget 2024 the government announced a series of measures to raise standards in the tax advice market, including requiring tax advisers who interact with HMRC on behalf of a client to register, and investing £36 million to modernise HMRC’s tax adviser registration services. This investment will make it easier and simpler for tax advisers to interact with HMRC and is an initial step in the government’s goal to ensure a modern tax system that taxpayers can have confidence in.

I am now pleased to publish this consultation on ‘Enhancing HMRC’s powers: tackling tax advisers facilitating non-compliance’. Our tax system is built on the principles of fairness, trust and compliance, and it is crucial that we uphold these values by ensuring the highest standards among those who provide tax advice.

Most tax advisers in the UK are dedicated professionals who adhere to rigorous standards, helping millions of taxpayers pay the right tax. However, a minority of advisers fall short of these standards. Their actions can facilitate non-compliance and contribute to the tax gap. This undermines trust in both the tax system and honest tax advisers.

I am committed to closing the tax gap and ensuring that everyone pays their fair share. This consultation seeks views on a range of measures to enhance HMRC’s powers and sanctions against tax advisers who cause harm to the tax system. The proposed measures aim to enable HMRC to take swifter and stronger action and ensure there is no place for bad actor business models in the UK tax advice market.

I welcome views on expanding the circumstances in which penalties can be charged to tax advisers, introducing more robust information-gathering powers, broadening the scope of disclosures to professional bodies and the public, and introducing stricter penalties for non-compliance. These measures are designed to deter non-compliance, improve accountability, and reduce revenue loss attributable to the worst tax adviser behaviours.

The proposals outlined in this consultation are the result of extensive engagement with stakeholders. I believe these changes will not only protect the exchequer and taxpayers but also uphold the reputation of the tax advice profession and ensure a level playing field for all.

I invite all stakeholders, including tax advisers, professional bodies, and taxpayers, to engage with this consultation and share their views. Your feedback is vital in shaping a tax system that is fair, efficient, and trusted by all.

Thank you for your engagement in this important consultation.

James Murray MP
Exchequer Secretary to the Treasury

1. Executive summary

Individuals and businesses are responsible for their own tax affairs. 12 million of them rely on approximately 85,000 tax advice firms to support them to meet their tax obligations, especially when their tax affairs are complex.

Most tax advisers are competent and adhere to professional standards. They add value to the UK tax system by supporting people to get their tax right. They assist clients with a range of tax-related activities including filing returns, providing tax advice, complying with obligations and requirements set by HMRC and interacting with HMRC on their behalf.

However, some tax advisers provide advice that facilitates non-compliance by their clients. This harms the tax system and increases the tax gap, which is estimated to be 4.8% of theoretical tax liabilities or £39.8 billion in absolute terms in the 2022 to 2023 tax year.

The problem

HMRC has existing powers to address tax advisers who undermine the tax system. These powers allow HMRC to take action against promoters of tax avoidance schemes and dishonest tax agents. However, we have seen examples of unscrupulous tax advisers acting in ways that contribute to the tax gap and cause harm to the tax system. As one example, a single unscrupulous adviser could represent thousands of clients, submitting inaccurate repayment claims and causing significant harm to the tax system.

Purpose of the measures

While taxpayers will remain responsible for their tax affairs, the government wishes to ensure that there are effective deterrents to tax advisers who harm the tax system and who facilitate non-compliance of their clients.

The measures

The government is considering enhancing the current legislative framework to ensure swifter and more effective action against tax advisers who harm the tax system. To do this, the government is asking for views on reforming existing information powers, enhancing penalties and broadening the scope of disclosing tax adviser misconduct.

The changes being considered through this consultation are in addition to the announcement at Autumn Budget 2024 that all tax advisers who interact with HMRC must register with HMRC from April 2026. Registration offers additional compliance options, such as suspension of registration, which will form part of the toolkit for HMRC to use when a tax adviser is not meeting the required standard. At Autumn Budget 2024 the government also announced plans to consult on reform of existing behavioural penalties that apply to taxpayers. The reform proposals outlined in this consultation are being developed in parallel to this work.

Safeguards

The government recognises the importance of having appropriate safeguards that ensure enhanced powers are used appropriately, and only targeted at those facilitating non-compliance. Such safeguards must ensure any changes remain fair, proportionate and lawful. Any changes to existing powers must still ensure that tax advisers feel able to work with clients who find it difficult to comply. They will need to recognise that mistakes can happen even when someone is acting to a high standard, and it must still be possible for advisers to get insurance to cover their work. Discussion on safeguards is provided where relevant in this consultation, and all input is welcomed to make sure the right balance is found.

2. Introduction

Background

Tax advisers play an important role in providing advice and services with competent tax advisers adding real value to the UK tax system. This is recognised in HMRC’s Charter, which commits to respecting taxpayers’ wishes to have someone act on their behalf.

Most tax advisers are competent and adhere to the HMRC Standard for Agents and the professional standards of their tax or accountancy professional body, such as Professional Conduct in relation to Taxation (PCRT) with which HMRC’s Standards are aligned. Approximately one third of tax advisers are not members of a tax or accountancy professional body, and therefore do not receive professional body oversight. However, they remain subject to HMRC’s Standard for Agents, breaches of which are dealt with by HMRC. A small minority within both groups cause disproportionate harm to the tax system by facilitating the non-compliance of their clients.

The actions of these tax advisers undermines confidence in the tax advice market and tax system and can result in unexpected tax liabilities and penalties for taxpayers. For HMRC, the non-compliance they facilitate takes up additional resources and contributes to the tax gap, reducing the amount of money available to pay for public services. To tackle these issues and reduce the impact on taxpayers and the tax system, HMRC has sought views on and developed a range of interventions to tackle this group of tax advisers.

Progress to date to raise standards

In March 2020, HMRC published the call for evidence ‘Raising standards in the tax advice market’, which closed on 28 August 2020. The summary of responses and next steps was published on 12 November 2020.

Since the call for evidence, HMRC has taken actions to address specific issues, while continuing to consider options to tackle systemic issues, including:

• published a review of powers to uphold its Standard for Agents in March 2022 which recognised the limitations in HMRC’s existing powers and policies
• updated HMRC’s Standard for Agents alongside a policy statement about how HMRC supports good tax advisers and addresses poor tax adviser behaviours
• deployed powers to tackle promoters of tax avoidance introduced in Finance Act 2021 and Finance Act 2022, including the issuing of 59 stop notices, and publishing the details of 129 promoters and 135 tax avoidance schemes by the end of 2024

To address market-wide issues, the consultation ‘Raising standards in the tax advice market: strengthening the regulatory framework and improving registration’ was published in 2024.

A summary of responses to that consultation was published at Autumn Budget 2024, where the government also announced an intention to further consult on enhancing HMRC’s powers to tackle non-compliance facilitated by tax advisers – this is that consultation. Where relevant, responses to the 2024 consultation have informed the proposals set out here.

At Autumn Budget 2024 the government also announced it will publish a consultation in early 2025 on a package of measures to tackle promoters of marketed tax avoidance. This includes new powers focussed on those who own or control promoter organisations; and new options to tackle legal professionals behind avoidance schemes.

3. Exploring the proposals

Why it is important to respond to non-compliance facilitated by tax advisers

The government understands the important role that tax advisers have in a healthy tax system, that good tax advice adds value, and that the majority of tax advisers try to get things right.

Taxpayers are ultimately responsible for their own tax affairs and compliance with tax obligations. However, many taxpayers rely on tax advisers to help meet those obligations and establish their tax liability accurately. Reliance on professional tax intermediation can cover a range of groups from individuals on low incomes who may be due a repayment but do not know how to get it, through to large multi-national businesses with complex issues across a range of different taxes and duties requiring detailed professional knowledge and expertise.

Many tax advisers provide high quality advice and support their clients to pay the right amount of tax. However there are times when the actions of tax advisers contribute to their clients being non-compliant. Examples where HMRC has seen tax advisers facilitating non-compliance that harms the tax system include:

• submitting claims for Research and Development tax relief for businesses that do not meet the requirements of the relief
• encouraging taxpayers to submit claims for repayments of income tax, for example for employment related expenses, without checking whether the taxpayer is entitled to a repayment
• providing advice on tax to clients which they rely on and which results in inaccuracies in the clients’ returns

A single tax adviser could represent thousands of clients. Where they submit fraudulent repayment claims or provide poor advice it can cause significant harm to the tax system. Enhancing existing powers could serve as a stronger deterrent against such actions.

How HMRC approaches non-compliance facilitated by tax advisers

HMRC continually reviews and improves policies, services and systems to make it easier for taxpayers to get things right and harder to get them wrong. HMRC’s established compliance approach is built around the principles of:

• first, preventing non-compliance from occurring, by improving policies, services, and systems to stop our customers from getting their tax wrong
• then, promoting good compliance by educating and supporting our customers in their tax affairs
• finally, responding by stepping in to tackle non compliance, and helping customers get their tax affairs in order and ensure the tax system is operating fairly

The same principles-based approach applies in HMRC’s dealings with tax advisers. HMRC:

• prevents non-compliance with obligations and standards by building compliance into systems design, for example in the tax adviser registration work which is currently under way
• promotes good tax advisers by supporting agents, helping them get things right where they can, and by endorsing PCRT and setting an HMRC Standard for Agents that is aligned with tax and accountancy professional body standards
• responds using certain levers when a tax adviser’s actions or advice are sufficiently poor that they create tax loss or harm to the tax system

This consultation considers whether the existing levers HMRC has are sufficient to effectively and swiftly address tax advisers whose actions lead to non-compliance that harms the tax system, and how changes could be made to improve their effectiveness.

The aims

This consultation seeks views on enhancing HMRC’s powers to ensure there are effective deterrents and responses to tax advisers who harm the tax system and who facilitate non-compliance of their clients. To do this, the government is:

• exploring proposals to make it easier for HMRC to gather information from tax advisers about their actions that lead to non-compliance that harms the tax system
• considering methods of setting appropriate deterrents for tax advisers where their actions lead to non-compliance that harms the tax system
• exploring further disclosure by HMRC of concerns about tax advisers to professional bodies, aiming to tackle poor behaviour early through professional bodies
• considering broadening the scope of the publication of the details of tax advisers who have been the subject of HMRC sanctions. This would allow taxpayers to make a more informed choice about the advice they receive whilst acting as a powerful deterrent to those who might cause harm to the tax system

These proposals sit alongside, but do not replace, the consideration of options to strengthen the tax adviser regulatory framework announced in response to the consultation ‘Raising standards in the tax advice market: strengthening the regulatory framework and improving registration’. Unlike the regulatory framework and registration measures, the scope of the proposals within this consultation is limited to either or both of:

• where tax advisers cause harm to the tax system
• where tax advisers facilitate non-compliance of their clients

Safeguards

The government is committed to ensuring that any amended powers are well targeted. The government has no intention of introducing unnecessary burdens on the majority of tax advisers who do a good job or extend HMRC’s role into policing the wider market.

All the existing legislative measures have a range of safeguards built in, including several decisions which can be appealed to tribunal. In some cases, such as Schedule 38 Finance Act 2012, it is the number of potential appeal points which can make the legislation challenging to use swiftly and effectively. While appeals are an important safeguard, the existing checks and balances on the use of Schedule 38 may be disproportionate.

Safeguards are part of the review for each of proposal in chapters 4 to 8 The government is keen to ensure that safeguards, where they are added, changed or removed, deliver the policy intent of the proposal and also remain fair, reasonable, proportionate and in accordance with the law and HMRC’s powers and safeguards principles. All safeguards should be:

• clear
• publicised
• accessible
• effective
• responsive to the nature and purpose of particular powers and sanctions
• conformant with human rights and other relevant non-tax legislation

The government is also considering amending or removing disproportionate safeguards which are currently in place, where they prevent the powers from being used swiftly and effectively.

What are enhanced powers intended to tackle

The government wishes to ensure that there are effective deterrents to tax advisers who harm the tax system and who facilitate non-compliance of their clients.

HMRC welcomes views on which actions that lead to taxpayer inaccuracies should be within scope of the proposals outlined within this consultation.

Question 1: Do you agree that HMRCs powers to tackle tax advisors who harm the tax system could be more effective?

• yes
• no
• maybe
• don’t know

Please give reasons for your answer.

Question 2: Do you agree with the government’s aim that any enhanced powers should allow for swift, effective, and proportionate action in cases of tax adviser activities that result in harm to the tax system and facilitates non-compliance?

• yes
• no
• maybe
• don’t know

Please give reasons for your answer.

Question 3: What actions that lead to harm being done to the tax system should be within scope of the proposals outlined within this consultation?

Please give reasons for your answer.

Question 4: Do you have any other suggestions for how HMRC might enhance its powers to tackle non-compliance facilitated by tax advisers?

Please give reasons for your answer.

4. Scope of the proposals

The proposals in this section are informed by responses to the consultation in March 2024 on raising standards in the tax advice market, which invited views on the scope of tax advisers who should register with HMRC, and of any regulation of the tax advice market.

The government intends that tax advisers who act by way of business, whether in the UK or overseas, and who provide tax advice or services in relation to UK tax, are in scope of the proposals. ‘Act by way of business’ means that organisations which do not operate for profit, such as charities, and people acting in a voluntary capacity are not in scope. However, the government welcomes views on whether organisations or individuals who offer tax advice and services in a professional capacity should be in scope of the proposals, regardless of whether they do so by way of business.

Tax advisers who interact directly with HMRC to provide tax advice and services are in scope. Tax advice and services includes submitting returns for taxpayers and supporting taxpayers during enquiries.

Where a tax adviser does not interact directly with HMRC, they may still provide tax advice or services to a taxpayer which leads to an inaccuracy in a return. Therefore, in line with responses to the March 2024 consultation, the government intends to apply the proposals to those who provide tax advice and services but who do not interact with HMRC, including specialist tax advisers and bookkeepers.

Example: Research and Development tax credits

A taxpayer may seek advice from an adviser who claims to specialise in Research and Development tax credits. The adviser may assure the taxpayer that the claim will be approved by HMRC, even if the business carries out no research and development activities. The taxpayer then may take on this advice to reduce their tax liability. The return may then be completed by the taxpayer’s regular tax adviser, a company accountant, or the taxpayer themselves, without any direct input from the Research and Development adviser. In this example, the proposals would also apply to the Research and Development advisor.

The proposals apply to tax advisers regardless of whether they are members of professional bodies, or how they define their activities. This means that professions such as solicitors, auditors and financial advisers are in scope of the proposals for any work they do which amounts to tax advice or services.

Under the existing powers in Tax Agents: Dishonest Conduct (Schedule 38 Finance Act 2012), the individual tax adviser is responsible for responding to information notices and is liable for penalties. The government is considering changing this to hold the company, firm or other business responsible instead of the individual. In practice this would be the legal entity that is contracted to provide the tax advice or services.

Question 5: Do you have any comments on the proposed scope?

Question 6: Are there any other groups HMRC should consider?

• yes
• no
• maybe
• don’t know

Please give reasons for your answer.

5. Enhancing powers to enable HMRC to investigate and request information from tax advisers

Tax advisers play a vital role in their clients’ tax affairs. Despite this, HMRC can currently only gather information from tax advisers in very limited circumstances. This is when:

1. There is a compliance intervention into one of their client’s tax affairs, in which case HMRC can request information from the tax adviser that is relevant to the tax affairs of that specific client. However, the tax adviser may be responsible for similar inaccuracies in many of their clients’ tax affairs. Currently to gather information about other clients’ inaccuracies would require separate compliance intervention into each client.
2. The bar that a tax adviser is behaving dishonestly has been met, regardless of whether a client has a return which is being enquired into. However, it can be challenging to evidence that a tax adviser’s activity is dishonest conduct without being able to first request information about the tax adviser’s actions that lead to non-compliance that harms the tax system.

These circumstances can limit HMRC’s ability to swiftly and effectively take action to address tax advisers harming the tax system.

Proposed changes

The Tax Agents: Dishonest Conduct legislation in Schedule 38 Finance Act 2012 came into force in 2013. This gave HMRC the powers to issue a tax adviser with a conduct notice if it had determined that the tax adviser had engaged in dishonest conduct, to obtain working papers from them, and to impose penalties.

The government is considering changes to the existing power to request information from tax advisers in Schedule 38, so that information can be gathered from tax advisers in wider circumstances. The changes the government is considering include:

• combining the requirement to issue a conduct notice to a tax adviser with the issuing of an information notice (the ‘file access notice’), streamlining the use of the power
• allowing HMRC to request information to assess the actions of a tax adviser where HMRC reasonably suspects the tax adviser has facilitated the inaccuracy in a taxpayer’s document or return
• expanding the activity where information can be requested from dishonesty to include facilitation of inaccurate returns or documents
• allowing file access notices to be issued without tribunal approval, expediting the process to prevent unacceptable tax adviser actions from continuing
• reforming the amount of financial penalty for failure to comply with a file access notice so that it is proportionate to the tax loss

More information about each of these proposals is given below. These proposals are intended to bring the information powers for tax advisers in line with those for taxpayers and third parties found in Schedule 36 Finance Act 2008.

The government is also proposing reforming related powers for penalties and publishing information about tax advisers where issues are proven. More information on this can be found in chapters 6 and 8 respectively.

Conditions for issuing a conduct and file access notice

Under Schedule 38 Finance Act 2012, to issue a tax adviser with a file access notice in relation to their tax advice activities (which requires the production information and documents), HMRC must first determine that the tax adviser has behaved dishonestly and have issued a conduct notice. The conduct notice is appealable. HMRC cannot issue a file access notice requesting information from the tax adviser until either the appeal period for the conduct notice has expired or any appeal is withdrawn or confirmed by the tribunal.

This framework can make the information power difficult to use, because very limited information may be available to determine that a tax adviser has behaved dishonestly to allow the issue of a conduct notice and progressing to a file access notice can take many months whilst appeals against the conduct notice are decided.

The government is proposing to amend the requirement to have determined that a tax adviser has behaved dishonestly before issuing a conduct notice and requesting information in a file access notice. Instead, the government is proposing allowing HMRC to exercise powers where HMRC ‘reasonably suspects’ the tax adviser has facilitated an inaccuracy in a taxpayer’s document or return. The government also proposes a conduct notice and file access notice should be able to be issued at the same time to gather information that would help determine the extent to which a tax practitioner’s actions have led to the inaccuracy.

Penalty for failure to comply with file access notice

Under Schedule 38 Finance Act 2012, where a tax advisor fails to comply with a file access notice, HMRC can issue an initial penalty of £300, and further daily penalties of up to £60.

While HMRC can take strong action where documents or information is concealed, no action can be taken by HMRC, for example issuing a penalty, if the information provided in response to the notice is inaccurate. There is also no means of increasing the amount of the daily penalty above £60 in cases where the failure to provide information is ongoing. Capping the daily penalty to £60 per day carries a risk that the benefit gained from non-compliance with the notice outweighs the penalties charged.

To make the penalties more effective, and to align with penalties for similar failures under Schedule 36 Finance Act 2008, the government is proposing to:

• allow HMRC to apply to a tribunal to increase the amount of the daily penalty up to a maximum of £1,000 per day where the failure to comply with the file access notice extends beyond 30 days after the notice of the initial penalty was issued
• introduce a penalty for providing inaccurate information in response to an HMRC file access notice – this could be either fixed (up to £3,000) or proportional to the tax loss (up to 100%) for each inaccuracy

Safeguards for Tax Advisers

The government recognises retaining appropriate safeguards remains essential to prevent use of powers in circumstances they are not intended to cover, and to ensure that financial penalties remain proportionate to the actions. However, the government also considers some changes are needed to Schedule 38 safeguards, to render the power more practical to use and thereby meet its aim of addressing poor tax advisers swiftly and efficiently.

Under the existing legislation, HMRC must also seek approval from a tribunal to issue a file access notice to a tax adviser. This requirement further extends the time taken to request information from the tax adviser. During this time, they may continue to be responsible for ongoing tax loss. The government is considering amending this safeguard, bringing it in line with other formal information powers, so that the file access notice will instead normally be only authorised by a senior approving officer within HMRC (independent from the business area investigating the agent). Non tribunal approved notices will carry a right of appeal to the tribunal.

In the most serious cases HMRC would still be able to seek approval from a tribunal, such as where a tax adviser has previously refused to provide information when requested, reserving the tribunal process for those cases where tribunal intervention is entirely necessary. In line with wider information powers, a tribunal approved notice would not carry the right of appeal.

Question 7: Do you agree that it should be easier for HMRC to obtain information from tax advisers where HMRC reasonably suspects the tax adviser’s activity has facilitated an inaccuracy in a taxpayer’s document or return?

• yes
• no
• maybe
• don’t know

Please give reasons for your answer.

Question 8: Do you believe that ‘reasonable suspicion’ is the right threshold to issue a conduct and information notice? Are there any alternatives HMRC should consider?

• yes
• no
• maybe
• don’t know

Please give reasons for your answer.

Question 9: Do you agree with the proposed changes to the powers to gather information from tax advisers?

• yes
• no
• maybe
• don’t know

Please give reasons for your answer.

Question 10: Do you have any comments about the proposal to remove the safeguard requiring tribunal approval for a file access notice?

• yes
• no
• maybe
• don’t know

Please give reasons for your answer.

Question 11: Are any other changes to safeguards needed to ensure Schedule 38 can be used more swiftly and effectively?

• yes
• no
• maybe
• don’t know

Please give reasons for your answer.

Question 12: Are there any unintended consequences of the proposed changes?

• yes
• no
• maybe
• don’t know

Please give reasons for your answer.

Question 13: Are there additional/alternative ways HMRC should gather information related to tax advisers who cause harm to the tax system?

• yes
• no
• maybe
• don’t know

Please give reasons for your answer.

6. Enhancing financial penalties for tax advisers who cause harm to the tax system

Currently, a penalty can be issued under Schedule 38 Finance Act 2012, Tax Agents: Dishonest Conduct when a tax adviser has done something dishonest, with a view to bringing about a loss of tax when assisting clients with their tax affairs.

The process for issuing penalties on tax advisers for dishonest conduct is protracted. There are potentially 3 opportunities to appeal – against the conduct notice, against the file access notice and against the penalty itself (both the issuing of the penalty and the amount). The government is considering reviewing the threshold to charge penalties under Schedule 38 alongside the penalty amounts to ensure it is an effective deterrent.

The financial penalty for dishonest conduct currently ranges from £5,000 to £50,000. It is not linked to the potential tax lost. As a result, in some high value tax loss cases even the maximum penalty of £50,000 could be seen by some tax advisers as an acceptable cost of doing business rather than an effective deterrent.

To help ensure the financial penalty in Schedule 38 is a more effective deterrent, the penalty could be calculated on the potential loss of tax revenue caused by the tax adviser’s unacceptable actions. This would align with the penalty range for taxpayers deliberately submitting an inaccurate document to HMRC in Schedule 24 Finance Act 2007. This could also be supplemented with an additional option to escalate the penalty further, for each new instance of non-compliance, up to and potentially over the total of the revenue lost. Where the non-compliance causes significant harm to the tax system, this could result in a penalty of millions of pounds.

Alternatively, the penalty could be tied to the fees tax advisers charge for their services. Raising the penalty would make it significantly harder for tax advisers whose business models rely on facilitating non-compliance to sustain their operations, thereby reducing the incentive to engage in such practices and helping to close the tax gap.

The government has considered other penalty options, such as imposing a fine equivalent to 10% of a business’s global turnover. However, this approach is unlikely to be effective if a bad actor’s business model is entirely driven by profiting from lost tax revenue. A penalty linked to the potential tax loss or fees – potentially matching or even surpassing the amount of tax lost or fees earned – would be a stronger deterrent against such practices. The government welcomes views on our approach to setting penalties to ensure they serve as an effective deterrent.

The tax adviser entity subject to a penalty

Under Schedule 38 the individual tax adviser is responsible for responding to information notices and is liable for penalties. However, a tax adviser business is responsible for directing their employees and should take action to correct their employee’s action where they do not meet professional standards. In many cases, the business will be responsible for instructing their employees to take actions that lead to inaccuracies in clients’ returns resulting in a tax loss.

The government is therefore considering changing the legislation to hold the company, firm or other business responsible instead. However, the government is also aware that there may be cases where an individual tax adviser will be responsible for the actions leading to those inaccuracy. They would not be acting under the instruction, or with the permission, of their employer or partners. The government welcomes views on whether there should be the option to hold an individual tax adviser responsible for their actions, where there is evidence that the wider business was not involved.

Safeguards

The government will ensure the Powers and Safeguards Principles are followed if any changes to financial penalties are made in Schedule 38. The government will retain the right of appeal against Schedule 38 penalties, but also seeks views on amending the minimum and maximum financial penalty thresholds to allow the sanction to be more proportionate to the harm caused in any given case.

Question 14: Do you believe that the current penalties under Schedule 38 Finance Act 2012, Tax Agents: Dishonest Conduct provide an adequate deterrent against non-compliance that causes harm to the tax system?

• yes
• no
• maybe
• don’t know

Please give reasons for your answer.

Question 15: Do you believe that penalties should be introduced for tax advisers who have facilitated non-compliance that causes harm to the tax system?

• yes
• no
• maybe
• don’t know

Please give reasons for your answer.

Question 16: Should the government reassess how penalties for tax advisers are determined to enhance deterrence against non-compliance?

• yes
• no
• maybe
• don’t know

Please give reasons for your answer.

Question 17: Which approach do you think will be most effective to reduce tax advisers facilitating non-compliance in their client’s returns?

A. a penalty based on the potential revenue lost

B. a penalty based on the tax adviser’s fees

C. a penalty based on a business’s global turnover
D. other (please specify)

Please give reasons for your answer.

Question 18: Do you believe there should be a maximum penalty amount?

• yes
• no
• maybe
• don’t know

Please give reasons for your answer.

Question 19: If you believe a maximum penalty should be in place, how do you feel it should be calculated?

Please give reasons for your answer.

Question 20: Do you agree the penalty should escalate in stages, based on additional instances of facilitation of non-compliance?

• yes
• no
• maybe
• don’t know

Please give reasons for your answer.

Question 21: What other changes to the maximum and minimum financial penalty thresholds would be needed to ensure that a penalty charged in a case is more proportionate to the tax loss poor tax advice has caused?

Question 22: Do you agree with the government’s proposal to introduce an option to charge penalties on tax adviser business entities rather than individuals, except where it can be evidenced that the wider business was not aware of the individual tax adviser’s actions?

• yes
• no
• maybe
• don’t know

Please give reasons for your answer.

Question 23: What else should be considered when looking at penalties charged on tax advisers?

7. Broadening disclosure of HMRC’s concerns about tax advisers to professional bodies

Approximately two-thirds of tax advisers are affiliated to a professional body. These tax advisers are subject to the code of ethics and related guidance of the body to which they belong. Where there is evidence a member of a professional body has not followed the relevant code of conduct, the professional body can investigate them and, if necessary, take disciplinary action. All tax advisers, affiliated or not, are subject to HMRC’s Standard for Agents, which is aligned with industry codes of conduct and guidance.

Professional bodies carry out regular reviews of their members’ professional activities. However, it is possible that potential breaches of professional standards by a member may not always be immediately visible to professional bodies. Poor behaviours and professional standard failures might occur between reviews, for example, or be experienced by other parties (such as HMRC) in a way that might not be identifiable in a review, such as rude, abusive or threatening behaviour.

When HMRC was formed, the Commissioners for Revenue and Customs Act 2005 (CRCA) imposed a general statutory duty of confidentiality in section 18(1). However, HMRC is in a position to identify breaches, or potential breaches, of professional standards by tax advisers in the course of carrying out its functions. To ensure that HMRC could report tax advisers who were members of professional bodies and who fell short of HMRC’s Standard for Agents without breaching the statutory duty of confidentiality, specific provisions were included in CRCA for making Public Interest Disclosures (PIDs) to professional bodies for misconduct by its members (sections 18(2)(b) and 20(3)). These provisions provide HMRC with a statutory gateway to disclose information to professional bodies.

PIDs involve collating evidence of misconduct which, together with appropriate governance, can take time to finalise before submission to a professional body. Each professional body considers a PID for potential disciplinary investigation in accordance with its own processes, code of conduct and internal guidance (such as PCRT). For the purposes of assessing whether a PID is appropriate, HMRC takes into account the thresholds of poor behaviour that are likely to trigger a professional body disciplinary investigation.

PIDs cannot be used to address misconduct issues with unaffiliated tax advisers because they do not have a professional body to which the behaviour can be reported. In these cases, HMRC seeks to use its own existing powers.

HMRC has used the PID power on numerous occasions to refer matters of concern about a tax adviser, in line with past professional body feedback about the types and degrees of poor behaviour that they would want to be informed about from a disciplinary perspective (see table 1).

Table 1: Public Interest Disclosures to professional bodies made by year

Year	HMRC cases considered for PIDs	PIDs issued	No of agents reported	% of considered cases becoming PIDs
2019-20	600	25	17	4%
2020-21	677	13	11	2%
2021-22	740	14	11	2%
2022-23	860	31	27	4%
2023-24	872	45	42	5%

HMRC takes care to ensure that professional bodies only receive PIDs about instances which they are likely to investigate as disciplinary matters. Table 1 shows that HMRC deals with many more cases of potential breaches of standards which do not meet the criteria for submitting a PID.

The PID process is currently not appropriate for disclosures relating to behaviours which do not meet the misconduct threshold set by professional bodies, but in HMRCs view those behaviours can still harm the tax system. External stakeholders have previously suggested that HMRC could do more in terms of disclosing details and information about specific tax advisers to professional bodies even where the PID threshold is not met in order to provide targeted support and constructive early intervention.

Broadening the scope of disclosure to professional bodies

The government is interested in exploring what further disclosures HMRC could make to professional bodies in addition to PIDs, with a view to working collaboratively to manage specific issues or broader patterns of concern that HMRC is in a position to identify. Sharing information in this way may enable professional bodies to provide timely help and support that prevents issues from escalating into more serious difficulties.

The PID provisions in sections 18(2)(b) and 20(3) CRCA allow disclosures to be made about poor tax adviser behaviours, including lower-level potential misconduct, to their professional bodies so that potential misconduct can be investigated.

We propose broadening the scope of disclosures to professional bodies to include reporting outside of the PID process for behaviours that do not constitute misconduct, but still cause concern for HMRC. Such reports would still need to be made formally but would not require the same level of resource input as PIDs.

Professional bodies could address the behaviours reported by, for instance:

• direct engagement with the tax adviser concerned
• requiring the completion of tailored professional development
• similar solutions which do not amount to disciplinary action, but which encourage the tax adviser to raise the standard of their tax advice work

This could make it easier and faster for both HMRC and the professional bodies to respond and address issues at an earlier stage, which may reduce the level of harm being caused by the tax adviser and prevent longer-term escalation of an issue. As an example, an adviser could be making honest errors of the same kind in a number of claims or returns. Together those errors might not constitute a severe loss of tax or high number of ineligible claims justifying stronger action, but nevertheless could be adversely affecting HMRC’s efficient administration of the tax system in terms of the resource needed to check and correct the claims or returns. Faster intervention could stop those errors at an earlier stage, which might also be a more efficient approach for professional bodies and improve outcomes for taxpayers.

The government seeks views on whether HMRC should raise matters that do not constitute misconduct, but still cause harm to the tax system more routinely with professional bodies, in addition to continuing with formal PID referrals of disciplinary-level misconduct where investigation and sanction of the tax adviser by the professional body is expected.

There are various circumstances where it would not necessarily be proportionate to use financial penalty or publication sanctions, but where HMRC consider it helpful to share information with professional bodies to support efforts to raise professional standards that might be falling short of expectations. Some examples of non-compliance with HMRC’s Standard for Agents which HMRC could identify during regular compliance work and might be suitable for non-PID disclosures include:

• repetition of similar errors despite HMRC intervention explaining that such errors must not continue, but where tax loss or harm caused falls below thresholds for using other powers
• low technical awareness/ability in an area where the tax adviser is particularly active in representing clients (it may be, for example, that only one aspect of an adviser’s work needs addressing, so a more severe sanction would not be appropriate)
• isolated incidents, or first instances, of unprofessional behaviour, or obstruction
• occasional instances where a tax adviser has failed to keep their own tax affairs or return filing up to date

PIDs would continue to be reserved for examples of misconduct which seriously breach a professional body’s Code of Ethics or professional expectations, as well as actions which otherwise bring the reputation of the profession into disrepute.

Question 24: Are there any reasons why HMRC should not make further non-PID disclosures to professional bodies, as well as continuing with PIDs (where appropriate)?

Question 25: What types of behaviours or activities do you consider it appropriate for HMRC to make further disclosures about?

8. Broadening the scope of publication of tax adviser details when they are the subject of an HMRC sanction

Publishing details of a specific individual or business can be a powerful deterrent which discourages poor practice and promotes adherence to professional standards. By reviewing published information, taxpayers can make informed choices about which tax advisers to use or avoid and tax advisers themselves are understandably reluctant to have the reputational and commercial impact that publication would bring.

At present, tax advisers are only named in a comparatively small number of different contexts, meaning most of HMRC’s work to tackle poor tax advisers is not visible in one place. The picture available to the public is therefore both fragmented and incomplete.

There are numerous precedents for publication of tax adviser, tax scheme, or taxpayer details in a number of statutory and regime-specific powers. These include:

• Tax Agents: Dishonest Conduct (Schedule 38 Finance Act 2012)
• publishing Details of the Non-Compliant (Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 – the ‘MLRs’)
• publication by HMRC of information about tax avoidance schemes and those suspected of promoting those schemes (section 86 Finance Act 2022)
• Publishing Details of Deliberate Defaulters (PDDD) where a person or business in tax default has their details published on GOV.UK (section 94, Finance Act 2009)

HMRC activity that would benefit from a publication power

The government believes it is in the public interest for taxpayers to be better informed about which tax advisers are subject to sanctions or have had limitations imposed on their ability to act effectively for clients. These sanctions could arise because of failures to meet professional standards which cause a tax loss, or because of non-compliance by the tax adviser with their own tax obligations. The government seeks views on introducing a power to specifically allow HMRC to publish details of HMRC action against tax advisers.

There are a number of actions HMRC takes against tax advisers which would be strengthened in effectiveness if HMRC could publish what action has been taken and the details of the tax adviser concerned. These fall broadly into the 2 categories of professional standards and tax obligations, examples of which are given below.

Sanctions for failing to meet professional standards which could be published

Suspension of agent codes

‘Agent codes’ are codes that tax advisers need in order to access agent online tax services and perform actions on behalf of their clients. Suspension of these codes can occur for breaches of legal obligations or professional standards, or because of threats to the tax administration system. Suspension can be temporary or enduring depending on the circumstances. The effect is to prevent the tax adviser concerned from accessing HMRC’s Online Services for agents, limiting their ability to act for their clients and encouraging a return to the expected standard.

Pausing of repayment claims

HMRC pauses the processing of repayment claims submitted by a tax adviser when a high proportion of those claims are ineligible or simply speculative. Claims are only processed once HMRC is satisfied that the business is taking greater care over the claims it submits.

Investigations following a PID

Subject to agreement with professional bodies, HMRC could publish summaries of the outcomes of PIDs made to professional bodies. This could only take place once the professional body’s disciplinary investigation had concluded, and if a sanction had been imposed by them.

Refusal To Deal With (RTDW)

HMRC can formally refuse to work with a tax adviser, either temporarily or indefinitely, because of serious breaches of standards or criminal convictions. HMRC refers to this policy as RTDW. It is not used often but means HMRC will not have any dealings with the individual if that interaction is in their professional capacity as a tax adviser. Interaction in relation to their own personal tax affairs is not affected.

Sanctions for failing to meet tax obligations which could be published

Tax advisers who persistently do not keep their own personal or business tax affairs up to date, or who have several outstanding tax returns, regardless of whether their client’s affairs are up to date, are disregarding the importance of tax compliance and not meeting the professional standards expected of tax advisers by both HMRC and professional bodies.

Details of such tax advisers are not currently published, although some of them in deliberate default are published under PDDD. Tax advisers published under PDDD are not listed separately to other deliberate defaulters who are not tax advisers, so their details can appear in the middle of a wider list of many different business types.

HMRC could publish details of tax advisers who fail to file more than 2 returns, or whose outstanding liabilities remain unpaid for more than 2 years, as a way of drawing attention to tax advisers who do not take their own tax obligations seriously.

A broader power of publication for tax advisers subject to sanctions or restraints

The government proposes introducing legislation to give HMRC a broad power of publication for sanctions imposed on tax advisers and is seeking views on what the scope and safeguards should be.

It is not the intention to include insignificant errors in the scope of this publication power. The government is also mindful of the impracticality of publishing high volumes of details, both in terms of maintenance and diminished impact. Proportionality is an important consideration, and effectiveness of these powers could be diminished by overuse.

Publication can have a deterrence effect that promotes compliance with tax obligations. It helps inform customer choice by making information available about the minority of tax advisers who cannot represent them effectively. Publication also amplifies the imposition of sanctions to limit interaction with HMRC because of harmful activity, further discouraging such activity while incentivising constructive professionalism.

How the power could work

One approach is to always publish details where HMRC’s action relates to an instance of serious harmful activity to the tax system. HMRC could also publish details of less serious activity if it keeps being repeated and is harming the tax system. This would mean one-off instances of accidental oversight or insignificant errors would not be published, but enough repeated instances of lower-level harmful activity eventually would.

Timing is a further factor to consider, as it would be counter-productive to prejudice a potential disciplinary investigation by a professional body by publishing details of the PID that HMRC had submitted to the professional body before their investigation has concluded. HMRC would therefore need to take such factors into account when considering the exact time to publish details.

Publication itself could take 2 forms:

• short-form publication: lists on GOV.UK, updated at regular intervals, of tax advisers that HMRC has imposed sanctions or restraints on, and why
• long-form publication: in more extreme and complex cases, censuring statements detailing the issues of concern about a specific tax adviser, similar to those published by the Financial Conduct Authority or Advertising Standards Agency

The details published could align with those set out in ‘Publishing Details of Deliberate Tax Defaulters’ (section 94 Finance Act 2009), with minor changes for context. For instance:

• the name of the individual tax adviser, business, and any trading names previous names or pseudonyms
• the name of the firm in which that tax adviser is either employed, a partner or a director
• the tax adviser’s address or registered office – to prevent possible confusion arising with other tax advisers of similar name
• for short-form publication, a brief statement of the reason for publication and how long any restrictions on interacting with HMRC will remain in place
• for long-form publication, detailed descriptions of the activity of concern, the measures HMRC has taken, and how the tax adviser responded to them

Safeguards

It is important to ensure that appropriate safeguards are in place to ensure any publication power is not misused.

The government wants to make sure that this publication power would not inadvertently bypass safeguards in other powers which have a publication provision. One possible solution is to set a threshold for use that aligns with existing powers. This would also help make sure publication would be limited to instances where it is proportionate. The government invites views on where such a threshold for publication should be set, or whether there are other safeguards which would achieve similar level of protection.

Where a suspension may be of a short and temporary nature, it would be impractical to have safeguarding processes which renders publication effectively useless (such as, for example, a 30-day period in which to make representations against a one-month suspension of access to HMRC’s online services for agents). In contrast, a right of appeal to tribunal would be unnecessarily expensive and disproportionate.

HMRC’s approval process for publication, and the level at which approval is granted within HMRC, are also factors to consider. In all cases there should be a degree of separation from a case between the official working it and the official approving it.

The government therefore seeks views on the following publication framework and safeguards:

• publish short-form details or situations that are a matter of fact, rather than subjective interpretation (for example, where a tax adviser is not registered for anti-money laundering supervision with either HMRC or a professional body supervisor, and is therefore trading in breach of the MLRs)
• with the exception of the above, not publish at all where sanctions have a duration of less than 2 months (such as a temporary suspension of access to HMRC’s online services)
• in all cases invite representations within 30 days against publication, for short-form publication of sanctions which have a duration of 2 months or more, and for all long-form publications
• obtain approval for publication from a senior approving officer, and in more serious cases from 2 senior approving officers, which should include an assessment of the impact upon the relevant business in order to consider the proportionality of the sanction
• short-form publications would remain viewable for 12 months after the end of the period to which they apply. Long-form publications would remain viewable until there is no longer a risk to the tax system from the tax adviser concerned

Question 26: Do you believe that it is in the public interest for HMRC to publish more information about its activity, such as the details of tax advisers subject to a formal sanction by, or a restriction on their dealings with, HMRC?

• yes
• no
• maybe
• don’t know

Please give reasons for your answer.

Question 27: When considering where to set the threshold of proportionality for publication, which types of sanctions do you believe should be included, and which should be left out?

Question 28: Is the short-form and long-form approach to publication sufficiently flexible to allow HMRC to take a proportionate response to different degrees of poor tax adviser behaviour?

• yes
• no
• maybe
• don’t know

Please give reasons for your answer.

Question 29: What information about each tax adviser should be published, and is there anything that should not?

Question 30: For how long should details remained published and in the public domain for short-form publication, and for long-form publication?

Question 31: Which criteria for publication would set a fair and proportionate threshold for using publication?

Question 32: Do the proposed safeguards provide for a fair, proportionate, and workable publication framework?

Question 33: Are there any other safeguards which you think the government should consider for this publication power?

9. Summary of consultation questions

Question 1: Do you agree that HMRCs powers to tackle tax advisors who harm the tax system could be more effective?

• yes
• no
• maybe
• don’t know

Please give reasons for your answer.

Question 2: Do you agree with the government’s aim that any enhanced powers should allow for swift, effective, and proportionate action in cases of tax adviser activities that result in harm to the tax system and facilitates non-compliance?

• yes
• no
• maybe
• don’t know

Please give reasons for your answer.

Question 3: What actions that lead to harm being done to the tax system should be within scope of the proposals outlined within this consultation? Please give reasons for your answer.

Question 4: Do you have any other suggestions for how HMRC might enhance its powers to tackle non-compliance facilitated by tax advisers? Please give reasons for your answer.

Question 5: Do you have any comments on the proposed scope?

Question 6: Are there any other groups HMRC should consider?

• yes
• no
• maybe
• don’t know

Please give reasons for your answer.

Question 7: Do you agree that it should be easier for HMRC to obtain information from tax advisers where HMRC reasonably suspects the tax adviser’s activity has facilitated an inaccuracy in a taxpayer’s document or return.

• yes
• no
• maybe
• don’t know

Please give reasons for your answer.

Question 8: Do you believe that ‘reasonable suspicion’ is the right threshold to issue a conduct and information notice? Are there any alternatives HMRC should consider?

• yes
• no
• maybe
• don’t know

Please give reasons for your answer.

Question 9: Do you agree with the proposed changes to the powers to gather information from tax advisers?

• yes
• no
• maybe
• don’t know

Please give reasons for your answer.

Question 10: Do you have any comments about the proposal to remove the safeguard requiring tribunal approval for a file access notice?

• yes
• no
• maybe
• don’t know

Please give reasons for your answer.

Question 11: Are any other changes to safeguards needed to ensure Schedule 38 can be used more swiftly and effectively?

• yes
• no
• maybe
• don’t know

Please give reasons for your answer.

Question 12: Are there any unintended consequences of the proposed changes?

• yes
• no
• maybe
• don’t know

Please give reasons for your answer.

Question 13: Are there additional/alternative ways HMRC should gather information related to tax advisers who cause harm to the tax system?

• yes
• no
• maybe
• don’t know

Please give reasons for your answer.

Question 14: Do you believe that the current penalties under Schedule 38 Finance Act 2012, Tax Agents: Dishonest Conduct provide an adequate deterrent against non-compliance that causes harm to the tax system?

• yes
• no
• maybe
• don’t know

Please give reasons for your answer.

Question 15: Do you believe that penalties should be introduced for tax advisers who have facilitated non-compliance that causes harm to the tax system?

• yes
• no
• maybe
• don’t know

Please give reasons for your answer.

Question 16: Should the government reassess how penalties for tax advisers are determined to enhance deterrence against non-compliance?

• yes
• no
• maybe
• don’t know

Please give reasons for your answer.

Question 17: Which approach do you think will be most effective to reduce tax advisers facilitating non-compliance in their client’s returns?

A. a penalty based on the potential revenue lost

B. a penalty based on the tax adviser’s fees

C. a penalty based on a business’s global turnover
D. other (please specify)

Please give reasons for your answer.

Question 18: Do you believe there should be a maximum penalty amount?

• yes
• no
• maybe
• don’t know

Please give reasons for your answer.

Question 19: If you believe a maximum penalty should be in place, how do you feel it should be calculated? Please give reasons for your answer.

Question 20: Do you agree the penalty should escalate in stages, based on additional instances of facilitation of non-compliance?

• yes
• no
• maybe
• don’t know

Please give reasons for your answer.

Question 21: What other changes to the maximum and minimum financial penalty thresholds would be needed to ensure that a penalty charged in a case is more proportionate to the tax loss poor tax advice has caused?

Question 22: Do you agree with the government’s proposal to introduce an option to charge penalties on tax adviser business entities rather than individuals, except where it can be evidenced that the wider business was not aware of the individual tax adviser’s actions?

• yes
• no
• maybe
• don’t know

Please give reasons for your answer.

Question 23: What else should be considered when looking at penalties charged on tax advisers?

Question 24: Are there any reasons why HMRC should not make further non-PID disclosures to professional bodies, as well as continuing with PIDs (where appropriate)?

Question 25: What types of behaviours or activities do you consider it appropriate for HMRC to make further disclosures about?

Question 26: Do you believe that it is in the public interest for HMRC to publish more information about its activity, such as the details of tax advisers subject to a formal sanction by, or a restriction on their dealings with, HMRC?

• yes
• no
• maybe
• don’t know

Please give reasons for your answer.

Question 27: When considering where to set the threshold of proportionality for publication, which types of sanctions do you believe should be included, and which should be left out?

Question 28: Is the short-form and long-form approach to publication sufficiently flexible to allow HMRC to take a proportionate response to different degrees of poor tax adviser behaviour?

• yes
• no
• maybe
• don’t know

Please give reasons for your answer.

Question 29: What information about each tax adviser should be published, and is there anything that should not?

Question 30: For how long should details remained published and in the public domain for short-form publication, and for long-form publication?

Question 31: Which criteria for publication would set a fair and proportionate threshold for using publication?

Question 32: Do the proposed safeguards provide for a fair, proportionate, and workable publication framework?

Question 33: Are there any other safeguards which you think the government should consider for this publication power?

12. The consultation process

This consultation is being conducted in line with the Tax Consultation Framework. There are 5 stages to tax policy development:

Stage 1: Setting out objectives and identifying options.

Stage 2: Determining the best option and developing a framework for implementation including detailed policy design.

Stage 3: Drafting legislation to effect the proposed change.

Stage 4: Implementing and monitoring the change.

Stage 5: Reviewing and evaluating the change.

This consultation is taking place during stage 1 of the process. The purpose of the consultation is to set out objectives and identify options and seek views on these. The consultation also seeks views on more detailed policy design questions.

How to respond

A summary of the questions in this consultation is included at chapter 9.

Responses should be sent by 7 May 2025, either via our survey, by email to raisingstandardsconsultation@hmrc.gov.uk or by post to:

‘Enhancing HMRC’s powers: tackling tax advisers facilitating non-compliance’ consultation
Agent Policy Team
HMRC
Benton Park View
Longbenton
Newcastle upon Tyne
NE98 1ZZ

Please do not send responses to the Consultation Coordinator.

Paper copies of this document or copies in Welsh and alternative formats (large print, audio and Braille) may be obtained free of charge from the above address.

When responding please say if you are a business, individual or representative body. In the case of representative bodies please provide information on the number and nature of people you represent.

Confidentiality

HMRC is committed to protecting the privacy and security of your personal information. This privacy notice describes how we collect and use personal information about you in accordance with data protection law, including the UK GDPR and the Data Protection Act (DPA) 2018.

Information provided in response to this consultation, including personal information, may be published or disclosed in accordance with the access to information regimes. These are primarily the Freedom of Information Act 2000 (FOIA), the DPA 2018, UK GDPR and the Environmental Information Regulations 2004.

If you want the information that you provide to be treated as confidential, please be aware that, under the Freedom of Information Act 2000, there is a statutory Code of Practice with which public authorities must comply and which deals with, amongst other things, obligations of confidence. In view of this it would be helpful if you could explain to us why you regard the information you have provided as confidential. If we receive a request for disclosure of the information we will take full account of your explanation, but we cannot give an assurance that confidentiality can be maintained in all circumstances. An automatic confidentiality disclaimer generated by your IT system will not, of itself, be regarded as binding on HM Revenue and Customs.

Consultation Privacy Notice

This notice sets out how we will use your personal data, and your rights. It is made under Articles 13 and 14 of the UK GDPR.

Your data

We will process the following personal data:

Name
Email address
Postal address
Phone number
Job title

Purpose

The purposes for which we are processing your personal data is: Enhancing HMRC’s powers: tackling tax advisers facilitating non-compliance.

Legal basis of processing

The legal basis for processing your personal data is that the processing is necessary for the exercise of a function of a government department.

Recipients

Your personal data will be shared by us with HM Treasury.

Retention

Your personal data will be kept by us for 6 years and will then be deleted.

Your rights

You have the right to request information about how your personal data are processed, and to request a copy of that personal data.

You have the right to request that any inaccuracies in your personal data are rectified without delay.

You have the right to request that any incomplete personal data are completed, including by means of a supplementary statement.

You have the right to request that your personal data are erased if there is no longer a justification for them to be processed.

You have the right in certain circumstances (for example, where accuracy is contested) to request that the processing of your personal data is restricted.

Complaints

If you consider that your personal data has been misused or mishandled, you may make a complaint to the Information Commissioner, who is an independent regulator. The Information Commissioner can be contacted at:

Information Commissioner’s Office
Wycliffe House
Water Lane
Wilmslow
Cheshire
SK9 5AF

0303 123 1113 casework@ico.org.uk

Any complaint to the Information Commissioner is without prejudice to your right to seek redress through the courts.

Contact details

The data controller for your personal data is HMRC. The contact details for the data controller are:

HMRC
100 Parliament Street
Westminster
London
SW1A 2BQ

The contact details for HMRC’s Data Protection Officer are:

The Data Protection Officer
HMRC
14 Westfield Avenue
Stratford
London
E20 1HZ

advice.dpa@hmrc.gov.uk

Consultation principles

This call for evidence is being run in accordance with the government’s Consultation Principles.

The Consultation Principles are available on the Cabinet Office website.

If you have any comments or complaints about the consultation process, please contact the Consultation Coordinator.

Please do not send responses to the consultation to this link.

Annex: Overview of the proposed changes

Area	Current position	Proposed changes
Tax adviser  actions that lead to non-compliance that harms the tax system	HMRC can consider using Tax Agents: Dishonest Conduct, Schedule 38 Finance Act 2012 where it has evidence that a tax adviser has behaved ‘dishonestly’.	HMRC can use similar powers where it reasonably suspects the tax adviser’s activity has facilitated an inaccuracy in a taxpayer’s document or return.
Notification of actions that lead to non-compliance that harms the tax system	HMRC must first issue a notice to a tax adviser telling them they have behaved dishonestly. This decision can be appealed to a tribunal. HMRC can then issue a ‘file access notice’ to request information about the tax adviser’s activities.	HMRC will notify the tax adviser of the suspected activity at the same time as requesting information about the tax adviser’s activities. There are appropriate safeguards for this decision, including review by an HMRC review officer who has no previous involvement with the case, and right of appeal to a tribunal.
Information powers	HMRC must obtain tribunal approval to request information via a file access notice.	HMRC can issue an information notice without tribunal approval to give tax advisers the opportunity to voluntarily comply. HMRC can obtain tribunal approval to make a formal information request where necessary.
Penalty amount	HMRC can issue a penalty between a fixed range of £5,000 and £50,000 for a tax adviser’s dishonest conduct. This decision can also be appealed to a tribunal.	HMRC can issue a penalty relating to the potential tax lost which the tax adviser’s activity contributed to, removing the penalty cap.
Sharing information with professional bodies	HMRC can share information about an individual tax adviser with their professional body where the tax adviser’s behaviour meets professional body thresholds for formal disciplinary investigations	HMRC can report lower-level breaches of professional standards to professional bodies, to empower them to take discretionary action at an earlier stage, before those poor behaviours risk reaching disciplinary levels
Publishing information	HMRC can publish information about a tax adviser only in specific contexts (for example, anti-avoidance legislation)	HMRC can publish information about a tax adviser in relation to any sanction imposed to address poor behaviour causing harm above a set threshold.