Increased Level Of Fines For Advisors

Following Rachel Reeves’ recent Spring Statement, it is clear the government will be cracking down harder on tax advisors, unveiling a 6- week consultation to give HMRC more power to tackle those facilitating non-compliance. Proposals are set to increase scrutiny and issue fines of up to £3,000 a day on UK firms if HMRC suspect a breach of tax rules.

Currently, individual tax advisors are responsible for responding to HMRC information notices and are liable to penalties. However, future proposals are planning to hold companies, accountancy firms or other businesses more accountable instead of the individual. They plan to reform existing information powers, enhance penalties, and possibly implement a name and shame list to ensure more effective action against tax advisors.

Future proposals will allow HMRC to increase, the amount of daily penalty (maximum £1,000/day) where failure to comply with a file access notice, extends beyond 30 days after the notice of the initial penalty was issued.

A new penalty will be introduced for providing inaccurate information in response to a 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.

There are also plans to share a greater range of information about tax advisors with their professional bodies, setting out HMRC’s concerns about their members’ activities that do not meet the necessary thresholds.

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

So, what does this mean for Whitings LLP and our clients?

In the Open Consultation titled, ‘Enhancing HMRC’s powers: tackling tax advisers facilitating non-compliance‘, published 26th March 2025, James Murray MP, Exchequer Secretary to the Treasury mentions in the Foreword that, ‘Most tax advisers in the UK are dedicated professionals who adhere to rigorous standards, helping millions of taxpayers pay the right tax’ (GOV.UK, 2025).

As a firm we need to continue to uphold these standards expected of us within our industry to help close the tax gap and quash non-compliance. We can continue to meet our key approaches to providing client support – quality, client focus, pro-activeness and progressiveness, whilst also continuing to maintain the trust necessary between the UK tax system and ourselves as honest tax advisors.

For our clients we must remain true and fair, promoting open and honest conversations, establishing good rapport that allows us to be more inquisitive about the information provided and our clients to remain feeling well-informed.

We will have further updates on this matter following the 7^th May 2025.

Reference List:

GOV.UK (2025). Open consultation Enhancing HMRC’s powers: tackling tax advisers facilitating non-compliance. Available at: Enhancing HMRC’s powers: tackling tax advisers facilitating non-compliance – GOV.UK (Accessed: 10 April 2025).

Disclaimer - All information in this post was correct at time of writing.