HM Revenue & Customs (HMRC) released significantly expanded guidance on 1 October 2026 regarding the sanctionable conduct regime for tax advisers, introduced under the Finance Act 2022 and effective from April 2023. The updated manual (CH182000+) now includes detailed case studies illustrating the boundary between legitimate tax planning and ‘enabling’ of tax avoidance schemes that trigger sanctions. Key additions cover the treatment of ‘marketed arrangements’ under the Disclosure of Tax Avoidance Schemes (DOTAS) rules, the obligations of advisers who become aware of client non-compliance post-engagement, and the application of the ‘reasonable excuse’ defense in the context of professional negligence. The guidance also clarifies the interaction between HMRC’s civil sanction powers and professional body disciplinary proceedings.
Key Takeaways
- Broader ‘Enabler’ Definition: The guidance confirms that advisers who provide ‘material aid, assistance, or advice’ for arrangements they know—or ought to know—are notifiable under DOTAS face sanctions even if they did not design the scheme.
- Enhanced Due Diligence Required: Firms must implement documented risk assessment procedures for new clients and existing engagements, particularly where clients operate in high-risk sectors or utilize complex structures.
- Sanction Tiers Escalate: Penalties range from warning letters and publication on the sanctions list to financial penalties up to 100% of the fee earned from the relevant engagement, with repeat offenses attracting mandatory publication.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement