V5.360F Tax agents — dishonest conduct

Part V5 Compliance, enforcement and appeals

V5.360F Tax agents — dishonest conduct

V5.360F Tax agents — dishonest conduct


The legislation described below arose from HMRC's concerns that there was no comprehensive set of measures, specifically aimed at dishonest conduct by tax agents, across the spectrum of taxes administered by them. Criminal powers existed (and still exist), but are costly, time-consuming and consequently inappropriate in many if not most cases; a civil penalty could be issued under TMA 1970 s 99 for assisting in the preparation of an incorrect return, but only in relation to direct taxes; and FA 2007 Sch 24 para 1A (error in taxpayer's document attributable to another person) is unlikely to be applicable to tax agents. In addition, there were only limited provisions allowing HMRC to access the working papers of tax agents. Such access, HMRC considered, was necessary in the case of dishonest tax agents to enable HMRC to check and correct, if necessary, clients' returns and to see, as they put it, “how far the rot has spread”1.

The consequent legislation, contained in FA 2012 s 223 and Sch 38 came into effect on 1 April 2013. It—


    —     defines “tax agent”, and “dishonest conduct”;


    —     sets out the process of establishing dishonest conduct;


    —     gives HMRC power to obtain “relevant documents”;


    —     sets out the penalties for engaging in dishonest conduct and ancillary matters; an


    —     sets out the assessment and appeal procedures.

This paragraph is concerned only with the related penalties. For the powers of HMRC in relation to tax agents, see V5.241A. For offences

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