Tax advisers face £5,000 penalties for prohibited HMRC interactions

Tax advisers who continue prohibited interactions with HMRC after a compliance notice face £5,000 penalties per interactionGOV. The penalty is £10,000 if an ineligibility order is in force at the timeGOV. HMRC’s new sanctions guidance also explains suspension, bans on registration, client-notification duties and publication powers.

The first commencement date is 18 August 2026Legislation. The commencement regulations treat advisers holding an Agent Services Account immediately before that date as registered from itLegislation. The commencement regulations phase the provisions in across four tranchesLegislation. HMRC says unregistered activity cannot attract sanctions before registration becomes mandatory for the adviser’s tranche. Timely applicants can continue interacting while their applications are processedGOV.

A compliance notice must precede prohibited-interaction penaltiesGOV. HMRC must first allow 30 days for representations. The £10,000 rate applies after four or more penalty assessments under the prohibited-interaction provisions in the preceding two years, or during an ineligibility orderGOV. Adviser and relevant-individual histories are separate, and cancelled assessments are disregarded. Liability can fall on an organisation’s relevant individual where the interaction is attributable to them. Reasonable excuse protects against these penalties and client-notification penalties, provided any breach is remedied without unreasonable delay once the excuse endsLegislation. HMRC must allow 30 days for penalty representations; payment is due 30 days after the assessment noticeGOV. Assessment limits are 12 months from liability for prohibited interactions, or HMRC discovering a client-notification breachGOV.

Suspension blocks all in-scope client interactions, including telephone and correspondence, but not the adviser’s own taxpayer dealings or out-of-scope activity. A registration-condition suspension must be lifted once HMRC is satisfied the conditions are metGOV; a conduct suspension can last up to 12 monthsGOV. Before suspension, the response period is normally 30 days, extended to 60 where the sole failure is the specified overdue-amount or outstanding-return conditionGOV.

A £10,000 repeat-contravention assessment triggers a 12-month temporary ineligibility order for the person assessedLegislation, effective after 30 days from issue. A further qualifying £10,000 assessment during temporary ineligibility triggers a permanent orderGOV. HMRC must allow representations before issuing orders; section 237 also permits orders against relevant individuals following specified £10,000 assessments on their adviserLegislation.

Registered advisers must take reasonable steps to notify every client of a registration-condition suspension lasting over 30 days, within the 30 days beginning on suspension day 31GOV. For conduct suspensions and ineligibility orders, the notification period is 30 days beginning when they take effectGOV. Failure can cost £5,000 per clientGOV.

HMRC may publish identifying information and penalty or order details after the sanction becomes final, following 30 days for representationsGOV. First publication must be within one year of finality; government-site details normally must be removed after one year, except for permanent orders. Publication itself has no separate statutory appeal.

Specified registration and sanctions decisions carry review or tribunal-appeal rights. The normal period to accept an offered review, or appeal directly, is 30 days from the offer; extensions are possible. Reviews normally conclude within 45 days unless another period is agreed, followed by a 30-day appeal period from the conclusions notice. Late tribunal appeals need permission.

An appeal or review does not itself lift suspensionGOV. On application, temporary relief must be granted where suspension rests solely on the specified overdue-amount or return conditionGOV. Otherwise, the adviser must demonstrate inability to continue as a going concern without relief, and HMRC must consider relief appropriate, taking account of prospects, alternative protective steps and timely conduct; conditions may apply.

The framework is Finance Act 2026, sections 232–246 and Schedule 21, commenced in tranches by the Finance Act 2026 (Registration of Tax Advisers) (Appointed Days and Transitional Provision) Regulations 2026GOV.