HMRC widens adviser-sanctions wording to omissions and organisations

Sanctionable conduct by a tax adviser is doing something — or omitting to do something — in the course of acting as a tax adviser, with the intention of bringing about a loss of tax revenueGOV. The revised page describes that conduct as attributable to an individual tax adviser or an organisationGOV, replacing the previous reference to a tax advice firmGOV, and extends the subjective-intention test to things the adviser did or omitted to do and to acting or omitting to act (the underlying definition already covered omissions).

Two tests decide the question. First, the conduct must have been carried out in the course of acting as a tax adviser — done as part of their business, or, for an employee, as part of the employer's businessGOV — and in practice it can be almost anything an adviser does, such as providing advice to a client, submitting documents to HMRC, or failing to submit documents to HMRC. Second, the adviser must have acted with the subjective intention of bringing about a loss of tax revenue, judged on what they knew and did at the time they acted or omitted to actGOV. No actual loss needs to have occurred; what matters is whether a loss was the intended consequence. The adviser must have foreseen that a loss could result and intended that foreseen consequence. The standard of proof is the ordinary civil standard, the balance of probabilities, and the burden is on HMRC.

Advisers who take a credible view of what the law requires — even one that differs from HMRC's view — follow published guidance even where it later proves wrong in law, properly rely on a published extra-statutory concession, or make a genuine mistake or inaccuracy, even one amounting to a failure to take reasonable care, do not engage in sanctionable conduct. Ministerial comments during the passage of the Finance Act 2026 frame the threshold as high: the powers target advisers who intentionally facilitate non-compliance and leave advisers acting in good faith unaffected.

The worked examples draw the lines. An employee who agrees incorrect figures with a client to cut the liability engages in sanctionable conduct; the employing company, which had clear guidelines, investigated once a colleague covering leave spotted the abuse, dismissed the employee, warned the client and stopped acting, does not. A third-party specialist who knowingly gives wrong advice hoping for more referrals engages in sanctionable conduct even though the client never appointed him directly; the referring adviser who checked the advice and relied on it in good faith does not.

A new example settles where adviser and law both move on. Advice correct at the time stays non-sanctionable after later case-law undermines it: the former adviser, whose contract has ceased, and the successor, contracted only for future periods and never to review earlier ones, neither engage in sanctionable conduct by staying silent. Contrast the adviser with an ongoing contract who learns of HMRC clarificatory guidance affecting a filed return: telling the client, explaining the view is untested, and defending the lower-tax treatment as still credible keeps the adviser outside sanctionable conduct even though the position disagrees with HMRC's.

The legal basis is Schedule 38 to the Finance Act 2012 as amended by section 250 of, and Schedule 22 to, the Finance Act 2026GOVGOVLegislation. Penalties run only for conduct on or after 1 April 2026GOV, though a file access notice issued after that date may seek earlier documents to establish whether the test is met and whether the person acted as a tax adviser.