Lawyers facing HMRC naming can defend without breaching privilege

HMRC has no power to compel production of material that attracts legal professional privilege, even where the material would help establish the correct tax liability.GOV Absent waiver or loss of privilege, HMRC must assess tax on the non-privileged facts, documents and third-party information available. Misconceived assertions do not shield material HMRC needs, and disputes are worked through with the holder, ultimately before a tribunal or court if needed.

Legal advice privilege covers confidential communications between a legally qualified lawyer acting professionally and the client for giving or obtaining legal advice, even before litigation is contemplated, provided that is the dominant purpose of the communication.GOV Advice from non-lawyers does not attract it, though it may attract litigation privilege, and copying a lawyer into a message does not make it privileged. For corporate clients the client is the narrow group authorised to seek and receive advice.

Litigation privilege covers communications with third parties made for the sole or dominant purpose of conducting adversarial litigation in progress or reasonably contemplated, meaning a real prospect rather than a mere possibility.GOV A routine tax enquiry is not adversarial, though preparation to contest an expected assessment can be covered; advice on structuring for a tax result is not for litigation purposes. Privilege belongs to the client; disclosure summarising advice can amount to waiver, while an obviously mistaken disclosure returned unread does not.

No information notice can require production of privileged materialGOV, and none of the anti-avoidance legislation overrides privilegeGOV. A monitored promoter under the Finance Act 2014 cannot cite legal advice as a reasonable excuse against DOTAS or POTAS penalties where the advice rested on incomplete facts or unreasonable conclusions. These limits do not compel production, but a tribunal weighing reasonable excuse will test whether advice reflected a realistic view of the facts.

Where a lawyer's communications might bring the lawyer or firm within the enabler definitions in Schedule 16 to the Finance (No. 2) Act 2017, the same communications may instead show the person is not an enabler.GOV Because privilege blocks disclosure, paragraph 44 of that Schedule allows a relevant lawyer to declare instead, confirming under the 2017 Regulations that the person is not an enablerLegislation. The declaration is conclusive unless shown incorrect, and careless or deliberate inaccuracy exposes the lawyer to a penalty of up to £5,000GOV.

A parallel route protects lawyers where HMRC has notified an intent to publish information identifying the lawyer under section 316C of the Finance Act 2004, paragraph 36 of Schedule 17 to the Finance (No. 2) Act 2017, or section 86 of the Finance Act 2022.Legislation Where representations against naming cannot be substantiated without disclosing privileged communications, section 209 of the Finance Act 2026 allows a declaration that the representations are true and the privileged content would prove them on the balance of probabilities.GOV It travels with the representations, is conclusive unless shown incorrect, and careless or deliberate inaccuracy risks up to £10,000GOV, with publication after a final penalty subject to 30 days for representations and a 12-month window.

The naming-declaration regulations at SI 2026/570 came into force on 23 June 2026GOV, and the extended naming provisions apply to conduct on or after 18 March 2026GOV. The publication-representation declaration route sits under sections 209 to 213 of the Finance Act 2026 with SI 2026/570, and the enabler-penalty declaration route sits under paragraph 44 of Schedule 16 to the Finance (No. 2) Act 2017 with SI 2017/1245, alongside the naming provisions in section 316C of the Finance Act 2004, paragraph 36 of Schedule 17 to the Finance (No. 2) Act 2017 and section 86 of the Finance Act 2022.