Tax Avoidance – Accountants face tougher penalties

HMRC strengthening tax avoidance sanctions and deterrents

HMRC published a “consultation document” on “strengthening tax avoidance sanctions and deterrents”.

Under the proposed new rules, accountants and advisers who assist their clients to avoid tax could face penalties.  This could be up to 100% of the tax avoided. “These tough new sanctions will make would-be enablers think twice and in turn reduce the number of avoidance schemes on the market,” said the Financial Secretary to the Treasury, Jane Ellison.

The government has said that HMRC will only target those firms that help clients exploit tax rules.  This will include the setting up of offshore tax havens.  Although they will not take any action against legitimate ways of saving tax, such as putting money in pensions or ISAs.  However, it will be up to HMRC to draw the line between planning and avoidance.

Extension to HMRC’s investigation powers

This is another extension to HMRC’s investigation powers and could lead to accountants facing high financial penalties, as well as their clients. Given extra powers, HMRC has a habit of using them.

If your clients aren’t protected by Tax Fee Protection insurance, you may wish to look at this again. Given the proposed new rules, you should also ensure that your practice is protected.

Tax Fee Protection cover from Vantage Fee Protect

At Vantage Fee Protect, we believe in two over-riding principles. Simplifying tax fee protection by not over-complicating what we offer to practices and also creating complete transparency for accountants, in all practice relationships.  All practices with a Vantage Fee Protect tax fee protection scheme have the same level of cover.  There will be no hidden caps or limits, unless exceptionally the practice requests changes.  With us, you will have a dedicated relationship manager and Tax Fee Protection claims consultant and will know who to contact when you have a question or problem regarding fee protection.

If you require more information about Vantage Fee Protect Tax Fee Protection cover, please call 0116 274 9123.  Alternatively email us on

Related News Articles

CIS changes

HMRC announced they were making some minor changes to the CIS scheme from 6 April 2024, in that VAT failures are now counted when looking at whether a firm qualifies for gross payment status. In line with other taxes, minor failures will not count towards gross payment disqualification. “Minor failures” are: 3 late submissions of…

Navigating Tax Changes: High-Income Child Benefit Charge and Other Updates 

THE HIGH-INCOME CHILD BENEFIT CHARGE In an effort to reduce unfairness, the thresholds for the high-income child benefit charge (HICBC) will be increased from 2024/25. You may have to pay the HICBC if you are considered to have ‘high income’ and child benefit is being paid in relation to a child that lives with you,…

CIOT Responds to HMRC Regarding the Current Problems with R&D Tax Relief

In the summer of 2023, HMRC and the Chartered Institute of Taxation (CIOT) exchanged lengthy correspondence about the approach being taken by HMRC relating to R&D tax relief claim compliance checks. The CIOT expressed concern about a number of tactics being employed; HMRC’s response was to largely defend the measures being undertaken. Several months have…