HMRC’s powers to address dishonest conduct by advisers

With new consultations out in March relating to new powers for HMRC to deal with promoters of tax avoidance schemes and continuing debates about standards in the tax advisory market it is worth a reminder of the powers already available to HMRC to address dishonest conduct by tax advisers.

The legislation is contained in FA 2012 Sch 38 and all references in this article are to that schedule unless otherwise stated.

The current legislation gives HMRC the power to fine or prosecute tax advisers who engage in dishonest conduct ‘with a view to bringing about a loss of tax revenue’ (para 3(1)) regardless of whether that loss was actually incurred or whether the adviser was acting on the instruction of clients (para 3(3) and (4)). Dishonest conduct includes assisting a client to do (or omit to do) something and a tax loss is defined as a reduced...