Budget 09: tax advisers fear new fines

The taxman has been accused of looking to regulate the tax profession
‘through the back door’, after releasing a consultation paper flagging up the
possibility of fining and monitoring advisers.

Tax advisers have greeted
with Tax Agents
, a 43-page consultation, with great concern,
particularly around plans to charge financial penalties for advisers who fail to
take ‘reasonable care’ or are ‘deliberately non-compliant’ when dealing with tax

‘It’s regulation by the back door, the thin end of the wedge,’ said Roger
Barnard, Tenon director of taxation. Anne Redston, visiting professor at King’s
College London, said the consultation was one of the ‘most important debates
ever’ for the tax profession. ‘My key message is for the profession to engage in
the debate. It will affect the way we work.’

Grant Thornton senior tax manager Sheena Hay said HMRC was trying to
‘regulate this, that and the other’.

One adviser described HMRC staff as ‘swapping their bicycle clips for

Where there is sufficient evidence that the deliberate actions of an adviser
put tax at risk HMRC could introduce financial penalties; report the person to
their representative body or introduce monitoring. They could also refuse to
deal with the adviser in the future.

The penalties could be structured in a manner of ways, including fixed, or
linked to the tax at risk or the fee income or turnover.

‘If you’re competent then the bane of your existence, incompetent advisers,
could be forced out, but if you make the odd mistake, how far would HMRC push
these powers?’ Barnard added.

Richard Mannion, national tax director for Smith & Williamson, said he
was ‘relaxed’ about
the consultation, provided it is implemented and applied sensibly.

‘HMRC fully recognises that the overwhelming majority of agents perform to a
high standard. This is not about introducing regulation through the back door,’
HMRC said.

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Consultation Document:
with Tax Agents

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