By Steve Conley, Academy of Life Planning
March 31, 2025
In a bid to close the UK’s persistent £40 billion tax gap, the government has used the Spring Statement 2025 to unveil a fresh crackdown on tax advisers. But while ministers argue this is about fairness and fiscal responsibility, past experience warns us of the unintended—and often devastating—human consequences of such enforcement.
New Powers, Old Concerns
On March 26, the Chancellor announced a consultation to grant HMRC broader powers to target tax advisers who “facilitate non-compliance.” The proposals include:
- Stronger penalties for advisers who contribute to the tax gap;
- Expanded information-gathering powers;
- Publication of sanctioned advisers’ details;
- Closer cooperation with professional bodies.
The government says the aim is to enhance transparency and restore public trust. But for many in the tax advice profession, this initiative rekindles fears of overreach.
Robert Marchant of Crowe UK cautiously welcomed the consultation, but noted that “compliant clients are increasingly subjected to protracted tax audits with no material benefit to HMRC.” In other words, the system often punishes the innocent, not the guilty.
The Cost of Being Caught in the Crosshairs
While most agree that deliberate tax evasion should be pursued vigorously, the record shows that HMRC’s approach has sometimes ensnared those acting in good faith—ruining careers, reputations, and lives in the process.
Numerous advisers have faced years-long investigations, only to be exonerated at great personal and financial cost. In many such cases, HMRC has offered little more than an apology—if that. The public rarely hears about these silent casualties: small firms bankrupted, professionals mentally broken, and clients left uncertain and exposed.
The Loan Charge scandal stands as a stark example of policy enforcement gone awry. While it primarily impacted contractors and freelance workers, it originated with adviser-led schemes—many of which were marketed as compliant and even HMRC-approved at the time. The tragic fallout included bankruptcies and suicides, and an ongoing All-Party Parliamentary Group inquiry.
A Worrying Shift in Tone
The tone of the Spring Statement—emphasising criminal prosecutions, AI surveillance, and personal liability for directors—may resonate with voters, but it risks sending a chilling message to those offering legitimate tax guidance.
Tax advisers are not the enemy. In a complex system, they are essential intermediaries helping individuals and businesses navigate lawful compliance. Yet when HMRC conflates minor administrative missteps with criminal intent, trust in the tax system erodes.
The Ethical Line Between Avoidance and Evasion
There is a clear and important distinction between tax avoidance—legally minimising one’s tax liability—and tax evasion, which is a criminal offence. But HMRC’s ever-expanding definition of “aggressive avoidance” has blurred these lines. As a result, even well-intentioned advisers fear being targeted for offering clients prudent planning options.
Reform Without Ruin
If the government is truly committed to closing the tax gap, it must avoid creating new injustices in the process. Empowering HMRC with enhanced tools must be matched with proper oversight, proportionality, and accountability.
A just tax system must not only protect the Treasury—it must also protect the people who support its operation. That includes tax advisers, especially those acting with integrity, transparency, and in service of their clients.
As we navigate this new chapter, the Academy of Life Planning calls for policies that reform without ruin, enforce without persecution, and strike a balance between revenue protection and the rights of individuals.
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By Steve Conley. Available on Amazon. Visit www.steve.conley.co.uk to find out more.
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