From 1 April 2026, HMRC wields new powers to penalise tax advisers engaging in ‘sanctionable conduct’. Penalties range from £7,500 to £1 million for first offences, with public naming on GOV.UK. File access requests can trigger £3,000 per inaccuracy penalties. This targets intentional tax revenue losses but raises questions for compliant professionals.
What Constitutes Sanctionable Conduct?
Sanctionable conduct occurs when a tax adviser acts (or omits to act) with intent to cause a tax loss: underpayment, late payment, excess relief, or early relief. ‘Tax adviser’ broadly covers accountants, lawyers, valuers, even bank employees handling tax.
Key exclusions: in-house tax staff (penalties hit the employer) and informal family help.
Intent is subjective—HMRC must prove >50% likelihood based on knowledge and actions at the time.
- Not sanctionable: Credible legal views differing from HMRC; following HMRC guidance (even if later wrong); genuine mistakes or carelessness.
ICAEW analysis highlights risks from overbroad drafting.
Recent HMRC Moves Signal Enforcement Push
Week ending 21 April 2026 (ICAEW brief):
- HMRC performance data (Feb 2026): Closer to targets, but post handling lags.
- Self Assessment 2025/26 special cases published for individuals/partnerships.
- CT late filing penalties delayed due to system updates (higher from Apr 2026).
- Overlap relief online service closes 31 May 2026—use calculator or records post-date.
- New trusts helpline: 0300 322 9640.
- VAT road fuel scale charges from 1 May 2026.
AccountingWEB reports (latest): Agent MFA rollout June 2026; ramped admin for close company directors; £11m umbrella penalties; FRC Practice Note 28 updates.
CFO Implications: Risk Mitigation Checklist
- Adviser Vetting: Confirm registration, track record. Avoid offshore unverified.
- Documentation: Retain advice rationale, even differing from HMRC.
- In-House vs External: In-house errors penalise company, not individual.
- MTD Prep: Overlap relief—grab figures now; MFA training for agents.
- Close Cos: Review director loans, benefits—new reporting looms.
- Audit Trail: Timestamp decisions; use HMRC tools/guidance.
Non-compliance costs escalate: CT penalties up, agent sanctions add layers.
Forward Look
HMRC’s focus: digital compliance (MTD ITSA April 2027?), adviser accountability. Pillar 2, R&D changes compound pressures.
Tanous Ltd, your HMRC-registered agent (30+ years), navigates this. Schedule compliance audit: mark@tanous.co.uk. First consult free for Tanous clients.
Stay ahead—tax rights precede compliance burdens.