Tax Agents and Advisers (including accountants) can be investigated by HM Revenue & Customs if it suspects the agent of “Dishonest Conduct”. HMRC can penalise any dishonest conduct that leads to an underpayment of tax by the adviser’s clients; and can also name and shame the offending tax adviser.
The legislation can apply to anyone who acts in the capacity as a tax agent. It is not restricted to qualified accountants, tax advisers or lawyers. It applies across all taxes and duties administered by HMRC, except Customs Duty and tax credits, and it applies to dishonest conduct on or after 1 April 2013.
The key powers are:
- Information Powers for HMRC to obtain documents in the possession of the tax agent, including their working papers;
- Penalties ranging from £5,000 – £50,000; dependent on the “behaviour” of the tax adviser. With a facility to reduce penalties below £5,000 in “special circumstances”;
- The potential to publically name and shame the tax agent’s details: although these will not be published where the penalty is £5,000 or lower.
Agents have a right of appeal to the Tax Tribunal, in respect of the proposed file access notice and any penalties charged.
What does this mean for me?
If you are a tax agent who is being looked at by HMRC using these new rules, or if you are a taxpayer whose agent is being examined, then you need to be aware that HMRC have very serious concerns. Not only can this lead to penalties and naming and shaming for the tax agent, but could also lead to intrusive in-depth tax investigations into all their clients, and which could lead to criminal prosecution.
How can Lynam Tax Investigation Experts help me?
Lynam Tax investigation specialists have a massive amount of experience in dealing with HMRC tax disputes, including the use of information powers and penalty notices. We can assist you with these very troublesome matters. For an initial free, and no obligation discussion, phone:
Paul Lynam today on 0845 643 9997
or Andrew Nutbrown on 07718 778710