The government wants to step up the fight against enablers of tax abuse (again). New powers and better information can help. But HMRC is barely using some of the powers and penalties it already has.
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Laws that aren’t enforced are simply polite recommendations.
Over the last decade, under successive governments, HMRC has acquired an armoury1 of legal weapons to use against unscrupulous tax advisers.
This makes sense. Most people can’t and don’t evade tax on their own, beyond basic cash-in-hand income concealment. They need help. In case after case, dishonest tax advisers have been essential accomplices or even the prime movers in hiding clients’ income, creating and marketing failed tax avoidance schemes, and navigating the financial plumbing of the offshore world that still enables some of the wealthiest and most mobile in our society to place income outside the UK tax net, lawfully and not.
But there’s a problem: many of these legal weapons are barely ever used.
We know this from digging that TaxWatch and others have done into figures that aren’t routinely published.
Lots of bark, little bite
Since 2017, for instance, HMRC has been able to fine enablers of abusive tax arrangements:2 those who create and market unreasonable schemes that avoid taxes, don’t work in law, and so are counteracted by HMRC or an expert advisory panel. At the time, ministers promised this would “tackle the full supply chain of tax avoidance”.3
Yet while tax avoidance schemes continue to be marketed, defeated, and their users penalised, HMRC imposed fewer than five penalties on the adviser ‘enablers’ of such tax schemes in each financial year from 2020 to 2024, and possibly none at all in some years. We can’t know the precise annual figures, because HMRC told us that they are so small they can’t reveal them without risk of identifying the individual recipients of the penalties.
(This in itself is a slightly strange approach to the privacy of tax abuse enablers: because the same 2017 legislation4 actually gives HMRC the power to publish the names and details of those penalised in this way. Yet the current list5 contains no names of enablers at all).
Penalties for dishonest conduct by tax advisers – a serious charge – are similarly sparse. Since legal changes in 2012, HMRC can use civil powers to investigate tax advisers they suspect of dishonesty, such as deliberately concealing documents, or providing HMRC with misleading information about their clients’ tax affairs. Yet between 2020 and 2024, we discovered, this process wasn’t even initiated – through issuing a ‘Conduct Order’ – more than five times in any financial year (and, as above, possibly never in some years). Again, the risk of exposing the advisers in question, HMRC told us, prevents them from confirming the precise figures, though it’s hard to know how the public would go from a single published digit to identifying the names of individuals under investigation. Likewise, we don’t have full details of penalties levied on dishonest tax advisers at the end of this process, but HMRC is currently publishing the names of no adviser penalised for dishonesty, which they are empowered to publish under the 2012 Act.
What about the powers introduced in 2016,6 in the wake of the Panama Papers scandal, to penalise enablers of offshore tax evasion and non-compliance: those who help “shady people in sunny places” 7 to conceal their income and assets? As of June 2024, HMRC hadn’t fined any offshore evasion enablers in the preceding five years.8 Since 2017 companies can also be criminally prosecuted under strict liability for failing to stop their employees from facilitating tax evasion: as of January 2024 not a single company had been prosecuted in this way.9
In a subsequent blog we’ll dig into why these powers aren’t being used. It’s an important question as HMRC is now seeking10 wider and more agile powers against tax advisers that help their clients evade or avoid tax, in the wake of anti-avoidance targets in the Spring Statement. When debating these new tools, parliament will want to know whether existing powers are voluntarily unused, or unworkable. (When my family don’t eat the dinner I cook for them, is it because they’re picky, or is my cooking inedible?)
Gathering dust
TaxWatch has just submitted our response to HMRC’s consultation on some of these expanded powers. We stress that whatever the changes in powers and procedures, there need to be meaningful sanctions for the small minority of tax advisers who make a living from cheating the public purse. We also need a regulator with teeth to stop delinquent tax advisers from continuing to practice. And the public deserves the protection – as with financial advisers or lawyers – of knowing whether the tax adviser they’re about to hire has been penalised, disciplined, or flagged as a tax avoidance promoter. There should be a single, easily accessible place to access this information.
But it’s easy to dream up new measures. They too risk sitting on the statute book gathering dust unless HMRC has the resources and – as importantly – the will to use them.
TaxWatch’s submission to HMRC’s recent consultation on powers and penalties against tax advisers who facilitate non-compliance is here.
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[1] This includes: (1) penalties for enablers of defeated abusive tax arrangements and powers to publish their details (Schedule 16, Finance Act (No. 2) 2017); (2) conduct notices, information powers, penalties and publication powers for dishonest conduct by tax agents (Schedule 38, Finance Act 2012); (3) publication of tax agents issued with a Stop Notice or Monitoring Notice under the Promoters of Tax Avoidance Schemes (POTAS) rules; plus penalties and, more recently, potential criminal liability, for failing to comply with obligations under a POTAS Stop Notice (Part 5, Finance Act 2014); (4) penalties for facilitating the promotion of avoidance schemes involving non-resident promoters for which other penalties have been issued (Section 91 Schedule 13, Finance Act 2022); (5) powers to publish details of disclosable tax avoidance schemes under DOTAS, DASVOIT or VADR, plus penalties for failing to disclose, or to provide HMRC with required information about, a disclosable scheme under these regimes; (6) penalties for failure to disclose, or to provide HMRC with required information about, certain opaque offshore arrangements or CRS-defeating arrangements under the Mandatory Reporting Rules (Section 84 Finance Act 2019); (7) penalties and publication powers for enablers of offshore tax evasion or non-compliance (Section 162(1) and Schedule 20, Finance Act 2016); (8) publication of information about suspected tax avoidance scheme promoters (Section 86 Part 6 of Finance Act 2022). We’d be delighted for readers to send us other measures we may have missed off this list.
[2] HMRC, Guidance: Compliance checks: penalties for enablers of defeated tax avoidance — CC/FS43, updated 16 March 2023
[3] Mel Stride (Financial Secretary to the Treasury), House of Commons, 24 October 2017
[4] Schedule 16, Finance (No. 2) Act 2017
[5] HMRC, Current list of named tax avoidance schemes, promoters, enablers and suppliers, updated 8 May 2025
[6] Schedule 20, Finance Act 2016
[7] Though this quote is often attributed to the writer W. Somerset Maugham, writing about the French Riviera, he apparently didn’t coin the phrase.
[8] HMRC fines zero ‘enablers’ of offshore tax evasion in five years, The Bureau of Investigative Journalism, 16 June 2024
[9] HMRC has not charged a single company over tax evasion under landmark legislation, The Guardian, 20 January 2024
[10] HMRC, Enhancing HMRC’s powers: tackling tax advisers facilitating non-compliance (consultation document), 26 March 2025; HMRC, Closing in on promoters of marketed tax avoidance (consultation document), 26 March 2025
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Image: Draughtsmen at work in Sunderland, April 1958 (North East Museums)
