Draft legislation: Enhancing HMRC's powers to tackle tax advisers who facilitate non-compliance

The aim of the draft legislation is to deter tax advisers from harming the tax system, and hold tax advisers accountable when their actions facilitate non-compliance.

In the ATT’s response, we noted that these amendments all affect schedule 38 Finance Act 2012, and whilst we support, in principle, actions which raise the standards in the tax market, we have some significant concerns with these provisions. In particular:

• We do not consider that HMRC should be allowed to obtain information from tax advisers using a file access notice (FAN) where there is only a ‘reasonable suspicion’ that they have facilitated non-compliance in their clients’ tax affairs, especially as this FAN will no longer require tribunal approval
• We do not agree with the proposed penalty for tax advisers who have deliberately facilitated non-compliance in their clients’ tax affairs being based on the Potential Loss of Revenue (PLR)

We accept that publication of sanctioned tax advisers could help taxpayers to be better informed about the choice of tax adviser. However, HMRC must not publish details that could inadvertently expose individuals to significant personal risk.

Finally, we welcome the Government’s stated intention to ‘work with professional bodies to further assist them in dealing with poor conduct from their members at the earliest opportunity,’ and its commitment to ‘broaden disclosure of HMRC’s concerns to them.’ We look forward to engaging with HMRC to help shape how these broader disclosures will be implemented in practice, ensuring they are effective and take into account relevant practical considerations.