CH178210 - Sanctionable conduct by tax advisers: penalty for sanctionable conduct: overview

A tax adviser who engages in sanctionable conduct and who has been issued with a conduct notice is liable to a penalty.

The penalty is calculated based on the potential lost revenue (PLR) attributable to the tax adviser's sanctionable conduct. The maximum penalty is:

  • 70% of the PLR up to £1m for the first penalty
  • 85% of the PLR up to £5m for the second to fifth penalty in a 20 year period
  • 100% of the PLR with no maximum amount for the sixth or subsequent penalty in a 20 year period

The minimum penalty for sanctionable conduct is £7,500.  Where the PLR cannot be determined, or there is no PLR, the minimum penalty is used.

The penalty for sanctionable conduct is different to and separate from the penalty for failing to comply with a file access notice or providing inaccurate information in response to a file access notice.

When deciding the appropriate amount of penalty for sanctionable conduct, we must consider:

  • whether the tax adviser disclosed the sanctionable conduct
  • whether that disclosure was prompted or unprompted
  • the quality of that disclosure, and
  • the quality of the tax adviser's compliance with any file access notice that was issued in relation to that sanctionable conduct.

The tax adviser can appeal against the issue of and the amount of a penalty for sanctionable conduct. We must publish the details of the sanctionable conduct where the penalty issued is above £7,500.

We may use our discretion to reduce a penalty because of special circumstances.

FA12/SCH38/PARA26 as amended

FA12/SCH38/PARA27 as amended