Working with Tax Agents: Deliberate Wrongdoing Legislation

February 11th 2010

HMRC proposes to introduce new powers to address deliberate wrongdoing by tax agents. The aim is said to be a modernisation of powers which already apply to direct taxes to, in future, apply across all taxes and duties. The proposals would:

• enable HMRC to access the working papers of tax agents who engage in deliberate wrongdoing which leads or is intended to lead to a loss of tax; and
• make a tax agent who has been involved in deliberate wrongdoing liable to a penalty of up to 100% of the tax related to each client affected by the wrongdoing- capped at £50K pa.

The trigger to access working papers and for liability to penalty will be the same. It will be deliberate wrongdoing by the tax agent intended to cause a loss of tax. This is broadly the same test as applies for direct taxes currently under sections 20A and 99 of the Taxes Management Act 1970.

HMRC would welcome views and feedback on any aspect of the draft legislation. Comments should be received by 3 March 2010. They may be made:

by email to: powers.review-of-hmrc@hmrc.gsi.gov.uk;

or by post to: HMRC review of powers: penalties Room 1/72, 100 Parliament Street, London SW1A 2BQ;