Spring Statement: crackdown on tax advisers with £3k daily fines

Any tax advisers HMRC suspects of breaching tax rules by clients are going to come under increased scrutiny with proposals to issue fines of up £3,000 a day and new liability for firms

The Spring Statement, presented by the chancellor Rachel Reeves, set out proposals to strengthen HMRC’s ability to take action against tax advisers who facilitate non-compliance from their clients, with a draconian set of fines and moves to hold firms liable for individual’s actions.

The proposals will give HMRC more powers to deal with non-compliance facilitated by tax advisers and are only out for consultation for six weeks before the Treasury decides their next steps.

The government is considering enhancing the current legislative framework to ensure swifter and more effective action against tax advisers who harm the tax system. This would include reforming existing information powers, enhancing penalties and broadening the scope of disclosing tax adviser misconduct with a name and shame list.

Under the existing powers in Tax Agents: Dishonest Conduct (Schedule 38 Finance Act 2012), individual tax advisers are responsible for responding to HMRC information notices and is liable for penalties.

The government is considering changing this to hold the company, accountancy 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.

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, the Treasury confirmed.

HMRC’s powers are set to be expanded to allow them to investigate tax advisers where HMRC suspects their actions have led to an inaccuracy in a taxpayer’s documents and returns.

The Treasury is considering allowing file access notices to be issued without tribunal approval, expediting the process to ‘prevent unacceptable tax adviser actions from continuing’.

To back up the action, fines will be increased substantially, if the original plans are passed.

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.

There will also be a new 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.

It is also planning to overhaul the amount of financial penalty chargeable for failure to comply with a file access notice so that it is proportionate to the tax loss.

While not finalised, the Treasury is looking at a range of options, including expanding information powers against tax advisers, introducing stronger penalties against advisers who allow clients to avoid tax, and publishing details of those subject to HMRC sanctions.

There are also plans to share ‘a greater range of information about tax advisers with their professional bodies’, including the likes of ICAEW, CIOT and ICAS, setting out HMRC’s concerns about their members’ activities that ‘fall below the normal disciplinary investigation thresholds of professional bodies’.

There will also be comprehensive package of measures to close in on promoters of marketed tax avoidance, whose contrived schemes leave their clients with unexpected tax bills.

James Murray, Treasury minister responsible for HMRC, said: ‘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 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.’

This is a short six-week consultation closing for comment on 7 May 2025.

Sara White, Editor, Business & Accountancy Daily