Entity Setup
Strengthening HMRC’s Powers Against Non-Compliant Advisers: What This Means for Businesses
New legislation effective April 2026 arms HMRC with enhanced powers over tax advisers who deliberately facilitate non-compliance, bringing sharper penalties and stricter oversight.
By NomadicTax Research Team • 5-8 min read • February 18, 2026
## Overview of the Proposed Enhancements
In a publication dated **26 November 2025**, UK government announced that from **1 April 2026**, legislation will expand HMRC’s power to address tax advisers who knowingly facilitate non-compliance. This includes misconduct in client affairs, failing to report incorrect information, and aiding tax avoidance. ([gov.uk](https://www.gov.uk/government/publications/tackling-tax-adviser-facilitated-non-compliance/tackling-tax-adviser-facilitated-non-compliance-by-enhancing-hmrcs-powers?utm_source=openai))
Key changes include:
- HMRC may issue **file access notices** without prior tribunal approval; a senior officer may approve them, with appeal options. ([gov.uk](https://www.gov.uk/government/publications/tackling-tax-adviser-facilitated-non-compliance/tackling-tax-adviser-facilitated-non-compliance-by-enhancing-hmrcs-powers?utm_source=openai))
- Penalties for inaccurate or incomplete responses, or failure to comply, will be increased. ([gov.uk](https://www.gov.uk/government/publications/tackling-tax-adviser-facilitated-non-compliance/tackling-tax-adviser-facilitated-non-compliance-by-enhancing-hmrcs-powers?utm_source=openai))
- New powers to publish the names of advisers who are sanctioned for deliberate non-compliance. ([gov.uk](https://www.gov.uk/government/publications/tackling-tax-adviser-facilitated-non-compliance/tackling-tax-adviser-facilitated-non-compliance-by-enhancing-hmrcs-powers?utm_source=openai))
## Why This Matters for Businesses & Advisers
- **Reputational risk** increases: advisers whose misconduct becomes public may lose client trust and professional standing.
- **Greater due diligence** required by businesses when selecting tax advisers—verifying credentials, AML supervision, and fitness to act.
- Advisers will need to tighten internal controls to avoid accidental involvement in non-compliant behaviour.
## What Both Businesses and Advisers Should Do
1. **Review existing adviser relationships**: Check your tax adviser is properly registered, meets minimum standards, and has appropriate safeguards against misuse of advice.
2. **Request documentation**: Ask your adviser for evidence of compliance practices, regular training, and ethical standards.
3. **Ensure transparency internally**: Businesses using tax advisers should maintain clear written agreements, document the basis of advice received, and ensure advice aligns with current law.
4. **Monitor HMRC guidance and compliance notices**: New technical notes and guidance will be published ahead of 1 April 2026. ([gov.uk](https://www.gov.uk/government/publications/tackling-tax-adviser-facilitated-non-compliance/tackling-tax-adviser-facilitated-non-compliance-by-enhancing-hmrcs-powers?utm_source=openai))
## Example Application
Imagine a small tech startup engaging a tax adviser to structure its overseas sales. If the advisor uses aggressive tax‐avoidance arrangements or fails to disclose material information to HMRC, both adviser and client could face sanctions under the new law. If discovered, HMRC can issue file access notices, increasing risk for both parties.
## Final Thoughts
These changes reflect a drive toward fairness, accountability, and closing the tax gap. From April 2026, advisers must operate under tighter oversight—businesses and clients should expect more transparency and may need to adjust governance and advisory arrangements accordingly.
**Category**: Entity Setup | **TaxHome**: UK | **Author**: NomadicTax Research Team | **ReadTime**: 5-8 min | **Published**: true