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HMRC internal manual

Compliance Handbook

From
HM Revenue & Customs
Updated
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Dishonest tax agents: overview

This guidance explains the powers that HMRC can use if we determine that a tax agent is acting dishonestly.

A tax agent is a person who, in the course of business, assists other people with their tax affairs.

Dishonest conduct is where the tax agent does something dishonest with the view of bringing about a loss of tax revenue in the course of assisting clients with their tax affairs.

When we determine that a tax agent has engaged in dishonest conduct we will issue them with a ‘conduct notice’. The conduct notice notifies the tax agent of our determination that they have engaged in dishonest conduct. The person can appeal against our determination that they have engaged in dishonest conduct.

Where a tax agent has already been issued with a conduct notice, or convicted of an offence of dishonesty in relation to tax, we may issue them, or another person holding relevant documents, with a ‘file access notice.’ This enables us to obtain their files, so that we can determine the extent of the dishonest conduct.

We must get approval from the tribunal before we issue a file access notice.

There are certain documents and information that we cannot request using a file access notice.

A person can be charged penalties when they fail to comply with a file access notice, unless they have a reasonable excuse for the failure.

Where we have issued a conduct notice to a tax agent, we can

  • charge a penalty for dishonest conduct of up to £50,000, and
  • publish the details of the tax agent if we have charged a penalty of more than £5,000 for dishonest conduct.

The penalty for dishonest conduct will be less if the tax agent makes a disclosure.

A person can be prosecuted if they conceal, destroy or otherwise dispose of material documents after we issue a conduct notice, or after we tell them that we will likely issue a conduct notice, or after we issue a file access notice.

FA12/SCH38