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Fresh proposals to clamp down on dishonest tax agents have been published by HMRC in light of responses to Working with Tax Agents: The Next Stage, the consulation issued in December 2009, which led to draft legislation, published in February 2010, that was strongly criticised by tax professionals.
The latest discussion paper, Working with Tax Agents: Dishonest Conduct, sets out the Revenue's revised proposals and draft rules.
Key points include:
- Issuing of 'dishonest conduct' notices, with a right of appeal, where there is evidence a tax agent has dishonestly advised or assisted clients.
- Access to the working papers of dishonest tax agents, subject to approval by the First-tier Tribunal once conduct has been determined.
- Where working papers are no longer in the power or possession of the tax agent, HMRC will be able to request them from a third party.
- A civil penalty on the dishonest tax agent, and power allowing the Revenue to publish details on its website when an agent does not make a full disclosure.
The new document also notes that only illegitimate tax loss will be caught, after concerns were expressed that legitimate tax planning, such as advising a client to invest in an ISA, could be caught within the remit to stamp out dishonest advisers.
The consultation period will end on 16 September 2011.
