The Law Society has made a submission to HMRC on the provisions within the draft Finance Bill 2017 which would impose penalties on so-called enablers of tax avoidance schemes which are subsequently ‘defeated’ by HMRC. Although the proposals would not apply to advice given before the Bill receives Royal Assent, in the fullness of time penalties could be imposed on lawyers on the basis of advice that they gave possibly years previously.

The Society has discussed with HMRC that there should be a safeguard that an adviser could not be subject to a penalty if the advice was reasonable at the time it was given based on all the facts and circumstances known to the adviser. HMRC officials appeared receptive to this proposal, although it remains to be seen if there will be a change in the draft Bill’s wording. The practicalities of any legal professional privilege ‘certification’ that could be used by a solicitor to respond to an allegation that they are an ‘enabler’ remain unresolved.