UK Tax Adviser Sanctionable Conduct 2026/27

From 1 April 2026, HMRC can take stronger action against tax advisers who deliberately contribute to a loss of tax revenue. HMRC calls this sanctionable conduct. The regime can apply to an individual or organisation that assists another person with their tax affairs.

The key distinction is intention. A genuine mistake, a good-faith disagreement with HMRC or a credible interpretation of the law is not automatically sanctionable conduct. HMRC's test is aimed at conduct done with the intention of bringing about a loss of tax revenue. Where HMRC has reasonable grounds to suspect the conduct, it can seek working papers, issue a conduct notice, charge a penalty and publish details in serious cases.

What counts as sanctionable conduct?

HMRC describes sanctionable conduct as doing something, or omitting to do something, in the course of acting as a tax adviser with the intention of bringing about a loss of tax revenue. Examples can include knowingly claiming a repayment for a client who is not entitled to it, submitting an incorrect tax return on a client's behalf or failing to notify HMRC that tax is due.

The test is not “did an error happen?” and it is not “does HMRC disagree with the adviser?” HMRC's internal guidance says that advisers generally do not engage in sanctionable conduct merely because they take a credible view of the law, follow published HMRC guidance or make a genuine mistake while trying to comply. The evidence must be considered in context, including what the adviser knew and intended when acting.

Who can be affected?

The regime can apply to an individual tax adviser or an organisation. It may concern accountants, tax agents, payroll advisers, consultants or other businesses that assist with another person's tax affairs. The label used by the business does not settle the question; HMRC looks at the role performed and the conduct.

The client can be affected indirectly because the adviser’s working papers, returns, correspondence and instructions may be relevant to the investigation. A client should not destroy records simply because the adviser is under review. Keep the client's own accounting, tax and instruction records and obtain specialist advice about any request for information.

How the HMRC process works

These stages are not necessarily a simple automatic sequence. HMRC's guidance says it may sometimes have enough evidence to proceed without first issuing a file access notice. The existence of a notice or investigation is not itself proof that sanctionable conduct occurred.

What to do when a file access notice arrives

Penalties and publication

HMRC calculates a sanctionable-conduct penalty by reference to the potential lost revenue (PLR) attributable to the conduct. HMRC's current overview describes the following upper boundaries:

The minimum penalty is £7,500 where PLR cannot be determined or no PLR is available. HMRC may take disclosure, cooperation, previous penalties and other factors into account when setting the amount. Separate penalties can apply for failing to comply with a file access notice or providing inaccurate information in response to one.

Where HMRC charges a sanctionable-conduct penalty of more than £7,500, it must publish the adviser’s details on GOV.UK under the published rules. Publication can include name, postcode, business nature, periods of conduct and penalty amount. The penalty decision and the publication decision are related but should be reviewed separately.

Controls advisers should maintain now

Advisers can reduce uncertainty by maintaining a clear file showing:

• the client's instructions and the facts supplied;
• the law, guidance and reasonable interpretation relied upon;
• review and approval steps for returns and claims;
• unresolved questions and advice given to the client;
• corrections, disclosures and communications with HMRC;
• who prepared, reviewed and authorised the submission; and
• retention and access controls for working papers.

These controls do not immunise a firm from an investigation, but they can help show the difference between deliberate conduct, a careless error and a reasonable professional judgment.

Frequently Asked Questions

Evidence and decision checks

A reliable uk tax adviser sanctionable conduct 2026 27 review starts by fixing the tax year and the date on which the relevant event happened. Record the person's or business's status, the income or transaction category, the amount before tax, tax already withheld, and any election or claim being relied on. Do not combine a headline figure with a final liability: the result can change when another income source, a payment date, an ownership interest or a qualifying condition is added.

Keep the source documents behind every important input. Depending on the subject, that may include payslips, invoices, bank statements, contracts, provider statements, travel records, HMRC notices, payroll submissions, valuations or correspondence. Where an amount is apportioned, write down the method and retain the underlying total. If a correction is made, preserve the original figure and explain the reason, date and evidence for the replacement.

Before relying on the result, check the current official guidance for the same tax year and jurisdiction. Distinguish enacted law from a consultation, draft measure, announcement or future proposal, and record the effective date. Reconcile the final estimate to the relevant return, payroll record or HMRC account. A calculator or explanatory guide can support a decision, but it cannot replace the eligibility test or the official filing and payment process.

Evidence and decision checks

A reliable uk tax adviser sanctionable conduct 2026 27 review starts by fixing the tax year and the date on which the relevant event happened. Record the person's or business's status, the income or transaction category, the amount before tax, tax already withheld, and any election or claim being relied on. Do not combine a headline figure with a final liability: the result can change when another income source, a payment date, an ownership interest or a qualifying condition is added.

Keep the source documents behind every important input. Depending on the subject, that may include payslips, invoices, bank statements, contracts, provider statements, travel records, HMRC notices, payroll submissions, valuations or correspondence. Where an amount is apportioned, write down the method and retain the underlying total. If a correction is made, preserve the original figure and explain the reason, date and evidence for the replacement.

Before relying on the result, check the current official guidance for the same tax year and jurisdiction. Distinguish enacted law from a consultation, draft measure, announcement or future proposal, and record the effective date. Reconcile the final estimate to the relevant return, payroll record or HMRC account. A calculator or explanatory guide can support a decision, but it cannot replace the eligibility test or the official filing and payment process.

Evidence and decision checks

A reliable uk tax adviser sanctionable conduct 2026 27 review starts by fixing the tax year and the date on which the relevant event happened. Record the person's or business's status, the income or transaction category, the amount before tax, tax already withheld, and any election or claim being relied on. Do not combine a headline figure with a final liability: the result can change when another income source, a payment date, an ownership interest or a qualifying condition is added.

Keep the source documents behind every important input. Depending on the subject, that may include payslips, invoices, bank statements, contracts, provider statements, travel records, HMRC notices, payroll submissions, valuations or correspondence. Where an amount is apportioned, write down the method and retain the underlying total. If a correction is made, preserve the original figure and explain the reason, date and evidence for the replacement.

Before relying on the result, check the current official guidance for the same tax year and jurisdiction. Distinguish enacted law from a consultation, draft measure, announcement or future proposal, and record the effective date. Reconcile the final estimate to the relevant return, payroll record or HMRC account. A calculator or explanatory guide can support a decision, but it cannot replace the eligibility test or the official filing and payment process.

For related agent-security preparation, read the HMRC agent MFA guide. For scheme-risk screening, read the named tax avoidance schemes guide. This page explains HMRC's process and does not assess a particular adviser’s conduct.

Official sources

• HMRC — How HMRC deals with tax adviser sanctionable conduct
• HMRC Compliance Handbook — sanctionable conduct overview
• HMRC Compliance Handbook — what is sanctionable conduct
• HMRC — The standard for agents
• UK Parliament — Finance Act 2026