Good news for everyone who gives tax advice: HMRC has been persuaded to re-work its proposals for dealing with Tax Agents.

HMRC has faced heavy criticsm that its recently issued legislation for dealing with tax agents who are found guilty of a new fraud offence is unworkable. Some of the concerns are as follows:

  • The term "tax agent" is so widely drafted in the rules that it could apply to include anyone giving any form of paid or unpaid tax tips or advice, directly or indirectly, and all their employees.
  • The new measures are aimed at tackling agent fraud, but because HMRC wants to create a civil procedure, it created what appears to be a curiously downplayed new offence for tax agents called "deliberate wrongdoing". Why this could not be termed as "deliberate and concealed" behaviour to bring it into line with the schedule 24 Finance 2007 taxpayer penalty regime, is anyone's guess.

The measures have been introduced to tackle, only a handful of cases, per year, according to HMRC. This leads many agents to  beg the question, of whether in that case, it is proportional to introduce a whole raft of new laws when HMRC has already wide ranging powers to bring about a criminal prosecution of frausters (and confiscate their assets).

The good news is that the new measures are unlikely to be included in the 2010 Finance bill.

The Tax Agent consultation is open for comment until 3 March. The draft legislation is open for comment until 28 April.