How HMRC deals with tax adviser sanctionable conduct

From 1 April 2026, HMRC can take stronger action against tax advisers who deliberately contribute to non-compliance which causes, or intends to cause, a tax loss — known as sanctionable conduct.

A tax adviser is an organisation, or an individual, who assists others with their tax affairs.

What sanctionable conduct is

Sanctionable conduct can include actions such as, knowingly: 

• claiming a tax repayment for a client who is not entitled to it  
• submitting an incorrect tax return to HMRC on behalf of a client

If HMRC suspects you of sanctionable conduct

If HMRC suspects you of sanctionable conduct, they will send you a file access notice. You will need to give them your working papers and audit files, for example any documents used to prepare your client’s accounts.

If the working papers contain one inaccuracy, HMRC can charge a penalty of up to £3,000. If the working papers contain more than one inaccuracy, you can be charged a penalty of up to £3,000 for each inaccuracy.

If you do not provide the papers, HMRC may charge a £300 penalty, followed by daily penalties of up to £60. In serious cases, HMRC may ask the tribunal to increase the daily penalty to £1,000.

If HMRC decides you have committed sanctionable conduct

Where it is decided you have committed sanctionable conduct, HMRC will:

• send you a conduct notice
• charge you penalties

Conduct notices

HMRC will send you a conduct notice that sets out the assessment of your conduct and tells you to expect a financial penalty. You will be able to provide evidence to dispute the assessment. HMRC can charge you a penalty for the sanctionable conduct based on the potential lost revenue caused by your actions.

If HMRC does not issue a penalty before the time limit, the conduct notice will be withdrawn. HMRC may also withdraw the conduct notice at any time.

Penalties

Penalties for sanctionable conduct will be worked out based on the potential lost revenue (PLR) due to your sanctionable conduct — you can appeal against a penalty. If you are charged a penalty of more than £7,500 for sanctionable conduct, HMRC must publish your details on GOV.UK.

When working out the penalty amount, HMRC will consider:

• how you dealt with any file access notices
• if and when you told us about your sanctionable conduct
• how much you helped us find out the extent of your sanctionable conduct and the tax loss
• how many times we have charged you sanctionable conduct penalties before

The penalties are:

Number of penalties	Percentage of PLR	Maximum penalty amount
1	up to 70%	£1 million
2 to 5	up to 85%	£5 million
6 or more	up to 100%	No maximum amount

If the PLR cannot be determined, the minimum penalty for sanctionable conduct is £7,500.

Previous penalties may be used to work out an increase in future penalties, if they are issued within 4 years of each other. All penalties expire 20 years after they were issued and can no longer be used to work out future penalty amounts.

Information that can be published

If you are charged a penalty of more than £7,500 for sanctionable conduct, HMRC must publish your details on GOV.UK, and will let you know in advance that your details will be published.

Details that can be published include:

• your name and postcode
• the nature of your business
• the periods of your sanctionable conduct
• the amount of the penalty
• any other details necessary to identify you clearly

You cannot appeal against the decision to publish these details.

HMRC may also publish details of the company you work or worked for, if needed to make your identity clear. HMRC will let the company know in advance and the company will have the opportunity to respond.