MTAR30550 | Sanctions and safeguards: requirement for tax advisers to notify clients of suspension or ineligibility orders

Overview

A tax adviser must notify their clients if they become subject to:

• a suspension that continues for more than 30 days, or

• a temporary or permanent ineligibility order.

This provision is set out in section 238 of the Finance Act 2026.

This requirement is intended to ensure that clients are aware when their tax adviser is no longer permitted to interact with HMRC on their behalf. This allows clients to make informed decisions about their tax affairs and, where necessary, to appoint an alternative tax adviser to ensure that their tax obligations continue to be met. For more information about taxpayers relying on tax advisers to meet their tax obligations, see CH160700.

Suspension for failing to meet one or more registration conditions

Where a suspension relates to a failure to meet a registration condition, the tax adviser is only required to notify their clients if the suspension remains in place for more than 30 days.

In those circumstances, the tax adviser must notify their clients within 30 days beginning with the 31st day of the suspension.

Example

A suspension takes effect on 1 January. The tax adviser is not required to notify clients during the first 30 days of the suspension. If the suspension is still in place on 31 January (the 31st day), the tax adviser must notify their clients no later than 1 March.

If the suspension is lifted before the end of the first 30 days, no client notification is required.

Suspension for failing to meet HMRC’s standard for agents

Where a suspension relates to a failure to meet HMRC’s standard for agents, the tax adviser must notify their clients within 30 days beginning with the date on which the suspension takes effect.

Ineligibility orders

Where a temporary or permanent ineligibility order is issued, the tax adviser must notify their clients within 30 days beginning with the date on which the order takes effect.

Penalty for not notifying clients

HMRC may impose a financial penalty of £5,000 where it has evidence that a tax adviser has failed to comply with the requirement to notify clients.

Where the failure relates to more than one client, a separate penalty may be charged in respect of each client.

Any penalty for failing to notify clients is separate from, and may be imposed in addition to, any penalty relating to a prohibited interaction with HMRC.

Example

A tax adviser who is required to notify three clients fails to do so within the required period. HMRC may impose a separate £5,000 penalty for each client, resulting in total penalties of £15,000. If the adviser also undertakes a prohibited interaction whilst subject to a compliance notice, HMRC may impose a further financial penalty relating to that interaction.