Dishonest tax agents

By Tolley

The following Value Added Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Dishonest tax agents
  • Background
  • Who is a tax agent?
  • What is dishonest conduct?
  • HMRC procedure where dishonest conduct identified
  • Material or relevant documents
  • Penalties
  • Appeals
  • Interaction with other penalties
  • Publishing tax agent details

This guidance note provides an overview of the procedure followed by HMRC where they consider that a tax agent has acted dishonestly.


CH180000; FA 2012, Sch 38; De Voil Indirect tax Service V5.360F (subscription sensitive)

HMRC view conduct as being dishonest where the agent does something dishonest with a view to ensuring that tax revenue is lost in the course of assisting their clients with their tax affairs.

According to CH180120, HMRC introduced legislation in FA 2012, Sch 38 in order to:

  • identify what is dishonest conduct
  • penalise dishonest conduct when it occurs
  • reward co-operation and disclosure
  • identify the scale of dishonesty
  • recover the lost tax
Who is a tax agent?

The term tax agent is defined in the legislation as an:

CH180180; FA 2012, Sch 38, para 2

“individual who, in the course of business, assists other persons (‘clients’) with their tax affairs”

A firm or other organisation, whether incorporated or not, cannot be a tax agent for the purposes of this regime. A tax agent may, however, work for an organisation. A person will be viewed as a tax agent even where they or the organisation they work for are indirectly appointed or appointed at the request of someone other than the client.

HMRC considers that assisting with a client’s tax affairs will include:

  • providing advice to a client in relation to tax
  • acting or purporting to act as an agent of the client in relation to tax
  • assisting with documentation that is likely to be relied upon by HMRC when they

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