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HMRC internal manual

Compliance Handbook

Agent operational guidance: dishonest tax agents: penalties: penalty for dishonest conduct: when to assess a penalty of more than £5,000, but less than £50,000

When deciding the amount of the penalty for dishonest conduct you must consider

  • whether the individual disclosed the dishonest conduct, see CH184120 
  • whether that disclosure was unprompted or prompted, see CH184160 
  • the quality of that disclosure (telling, helping and giving), see CH184240 
  • the quality of the individual’s compliance with any file access notice given to them.

You must take account of all of these factors together. There are no penalty ranges as there are for penalties charged under, for example, Schedule 24 FA 2007.

Where the individual discloses their dishonest conduct but they have not

  • been as complete as is reasonably possible in telling you about it
  • been as active as is reasonably possible in helping you identify the extent of it
  • responded as reasonably promptly and accurately as is possible to giving you access to information and documents
  • complied fully and timeously with any file access notices issued to them
  • you must assess a penalty of more than £5,000, but less than the maximum of £50,000.

You will only assess a penalty of £50,000 when the individual has made no disclosure and has done nothing to tell you about the dishonesty, help you identify it or give you access to documents, see CH883620.

If, when you challenge the individual, they decide not to answer your questions and remain silent until after the tribunal has upheld the conduct notice you should not penalise them for delaying telling you about the dishonesty, see CH184300.

An individual’s request for you to issue a file access notice, where they have a good reason to proceed formally, will not affect the quality of disclosure for giving access. For example, where

  • their professional indemnity insurance requires a notice to be issued, or
  • complying voluntarily with your request for documents breaches client confidentiality.

An individual’s refusal to give you documents that they believe are privileged, or covered by any of the other exclusions at CH182700, will not affect the quality of disclosure.

To help you calculate the penalty, where a disclosure has been made but the quality is not as good as it might have been, you can also consider the answers to these questions

  • How long has the individual engaged in the dishonest conduct? Was the dishonesty a one-off event, or had it gone on for many years?
  • How many clients are affected? Were all of the agent’s clients affected by the dishonest conduct, a small percentage, or something in between?

To decide the amount of the penalty you must weigh up the quality of disclosure and the answers to the questions above. (This content has been withheld because of exemptions in the Freedom of Information Act 2000)  

You must have the penalty agreed by an authorising officer, see CH883655.

See CH883660 for guidance about making the penalty assessment.