The legislation which deals with dishonest conduct by tax agents became operational on 1 April 2013 following a long process of consultation which began in 2010. Chartered Accountants Ireland was involved in all aspects of the process from the initial consultation to the development of the final detailed guidance which has now been published.

HMRC worked closely with Chartered Accountants Ireland and the other professional bodies to develop the legislation which contains many safeguards and checks. These include tribunal approval for a file access notice, the right of appeal against some of HMRC's decisions, and that key decisions must be authorised at a senior level.

The initial consultation document issued in 2010 was widely considered to go far beyond the stated intention of the legislation which has been introduced to allow HMRC a civil remedy to deal with serious and dishonest behaviour by tax agents who cannot be pursued under the criminal prosecution route. HMRC have stated that the legislation is only expected to be used in a scattering of instances.

From 1 April 2013, the new legislation allows HMRC to:

• investigate dishonest conduct by tax agents;
• charge civil penalties; and
• publish the details of tax agents who have acted dishonestly

A short guide to the legislation is available on the HMRC website which explains what to expect if HMRC investigates an agent, the penalties that may be charged and what details can be published. A factsheet is also available.

Briefly, the minimum penalty for dishonest conduct is £5,000 with the maximum set at £50,000. The minimum penalty will be only charged if an agent tells HMRC everything about the dishonesty, and did everything possible to help them establish the full extent. If a penalty of more than £5,000 is charged, then HMRC can also publish the agent's details on their website for up to 12 months. The decision to publish is made by a senior HMRC officer.

Details which can be published include:

• the agent's name and address (business or private)
• the nature of their business
• the periods of their dishonest conduct
• the amount of the penalty
• any other details necessary to identify the agent clearly

HMRC will let an agent know in advance about their intention to publish their details and will provide 30 days to respond.

Readers should note that if an agent worked for or still works for a company, their details can also be published to help identify the agent on whom the penalty has been charged. Before doing this, HMRC will tell the organisation, they will then also have 30 days to respond.

More detailed technical and operational guidance is contained in the Compliance Manual available on the HMRC website.