We are HMRC Tax Investigations Specialists and are industry recognised for defending our clients. See our 5* client testimonials. We are ex-HMRC staff.

Tag Archive for: tax investigations

HMRC’s Plan To Register and Monitor Tax Advisers

The draconian HMRC interaction register will drive many professional tax advisers out of the market and impose considerable extra costs on honest majority, warns ICAEW. There is major concern across the profession about the new HMRC interaction register, set to come into effect from April 2026.

Government proposals to create a mandatory register for any tax advisers involved in ‘interaction with HMRC’ will harm the tax system, ICAEW said, and make the UK one of the most difficult tax environments in the world for practicing tax professionals.

So the ICAEW has called on the government to reconsider its plans, which would introduce a legal requirement for tax advisers to register with HMRC, and introduce significant new penalties for advisers based on their clients’ underpaid taxes.

Penalties could be issued for any tax return where HMRC considers more tax is due, even if the tax adviser has not acted improperly. Draft legislation for the Finance Bill 2025/26 also proposes the introduction of a strict liability criminal offence for failure to disclose a tax avoidance scheme, and even partners is limited liability partnerships could be caught if they do not file their tax return on time.

One of the biggest problems for the various professional bodies representing tax advisers, accountants, lawyers and conveyancing solicitors, is the ‘catch-all’ nature of the proposals and use of the very vague ‘interaction with HMRC’ criteria as the government’s definition of who is affected. The use of the word ‘interaction’ is also widely questioned.

ICAEW said that as drafted, the legislation misses the target. On mandatory registration for all tax practitioners who interact with HMRC, ICAEW said ‘the plans amounted to quasi regulation, as the eligibility criteria would allow for monitoring against a prescribed standard. It could also ban a firm from providing tax advice if just one of its partners was late in filing their own personal tax return’.

ICAEW called for mandatory registration to be deferred until April 2027 allowing time for more consultation, adding it was ‘supportive of policies that aim to raise standards in the tax market and drive out the bad actors who cause considerable harm to the tax system. However, these proposals don’t achieve those objectives and would not improve standards in the tax market’.

Alan Vallance, ICAEW chief executive (pictured), said:

‘These proposals will simply add costs and burdens to businesses, some of whom may find they can no longer access the tax advice they need.

‘Under these plans, the UK will become the most difficult tax environment in the OECD, with tax advice un-affordable and inaccessible alongside a negative impact on our long-term tax compliance culture.

‘They will make it harder for people to access the tax advice they need, which means the wrong tax will be paid, costing both businesses and HMRC time as they try to resolve matters – taking their focus away from growth.

‘These proposals undermine the prospects for growth when we need it more than ever, and we are calling on the government to revisit these plans.’

ICAEW warned that the ability for HMRC to access confidential client papers via advisers where there is no dishonesty risks making the UK unattractive in the global market and could harm inward investment. ICAEW suggests that the legislation should be reframed to catch only actions that amount to misconduct by the tax adviser.

Another concern is that there will be a lower bar to penalise tax advisers for any tax return where HMRC considers more tax is due, even if the adviser has not acted improperly, could make tax advisers unlikely to take on clients with large tax liabilities such as large companies or high net worth individuals, as they would consider the risk too high.

The Law Society added: ‘The definitions of “tax adviser” and “interaction with HMRC” are so broad that many legal professionals who do not hold themselves out as tax specialists, or who are not in any real sense tax advisers, would be caught.’

HOW CAN PURE TAX HELP?

At Pure Tax our Tax Investigation & Disclosure specialists are industry recognised and have dealt with hundreds of contentious situations with HMRC over the years. We are adept at managing interactions with the tax authorities to ensure that the investigation and disclosure processes run smoothly and that your interests are best protected.

UK’s Serious Civil Tax Investigations Lack a Deterrence Effect

Tax Evasion and HMRC’s Fraud Investigation Service

In this article for Bloomberg Tax we covered how HMRC’s Fraud Investigation Service, with some 5,500 new investigative officers promised in the UK’s recent budgets and the June Spending Review, are still expected to “do more, with more” to increase the deterrence effect of their most serious civil tax investigations.

Anecdotally, it seems the chains have still not come off in the case of HMRC’s most aggressive tax investigations, carried out by the Fraud Investigation Service, or FIS, where large amounts of tax are believed to be at risk and/or suspicions of tax fraud are alleged; predominantly working on tax evasion cases.

Despite an impressive responsibility, staff numbers have stayed stubbornly close to or below 5,000 across the country. Anecdotal evidence shows that the public is not afraid of FIS civil investigations and is seldom aware that a person has been subject to one—so the low number of investigations has a poor deterrence effect.

Over the 2024-2025 period, only 450 new such investigations were commenced (down from 480 in the 2023-2024 period), although FIS still managed to secure almost £190 million ($257 million) in revenue.

Here is the link to the full article at Bloomberg Tax; read on to learn more.

Its serious! HMRC civil tax investigations – Tax Insider (FEBRUARY 2025)

 

Here’s an updated article from Amit about serious, civil HMRC tax investigations, focusing on Code of Practice 9 (COP9, CDF) and Code of Practice 8 (COP8) investigations:

Written for Tax Insider: Tax Investigations: When Jail Is a Risk

“When it comes to tax investigations, HMRC’s Fraud Investigation Service (FIS) is known for its aggressive and intrusive tactics, especially in cases involving large amounts of tax at risk or suspected tax fraud. While the investigative approach hasn’t changed much, the consequences can be severe.

In the February issue of Business Tax Insider, Amit Puri dives deep into HMRC’s most in-depth investigations and explores the circumstances where jail time may be a real possibility.”

If you don’t already have a Tax Insider subscription, give their free 14-day trial a go.

Diwali 2023 party pictures

Pure Tax hosted trusted friends and family over festive drinks and nibbles, to savour great quality relationships and acknowledge another great year.

Thank you of course to everyone that joined us! Here’s to next year!

Our team are experts at resolving contentious tax issues accurately and efficiently, and we are highly adept at managing our clients’ interactions with HMRC to ensure processes run smoothly and that our clients’ interests are best protected at all times.

 

Importantly, we deliver that all-important trusted ‘buffer’ between our clients and HMRC during disclosures, and in-depth and intrusive investigations.

Get in touch to learn more about how Amit and the Tax Investigations and Disputes team have successfully guided clients through the COP9 or COP8 investigation processes; see our tax investigations guide here.

See our large business/corporate enquiries enquiries guide here.

Learn more about how we have helped our clients through their kind feedback here.

See our tax investigations FAQs here.