Legislation – Finance Act 2026

have been, or are likely to be, marketed as a means by which a person may seek a particular tax advantage if there is no realistic prospect that the arrangements will result in the tax advantage, or

(b)

are of a kind specified in regulations under subsection (2).

(2)

The Commissioners may by regulations specify arrangements that in the reasonable opinion of the Commissioners—

(a)

have been, or are likely to be, marketed as a means by which a person may seek a particular tax advantage,

(b)

are unlikely to result in the tax advantage, and

(c)

are likely to cause harm to participants.

(3)

The following factors would, for example, indicate that arrangements are likely to cause harm to participants—

(a)

a large number of participants;

(b)

participants that are not independently advised;

(c)

participants with otherwise straightforward tax affairs;

(d)

mass-marketing;

(e)

standardised implementation documents;

(f)

promoters that are unknown to, or not able to be contacted by, participants.

(4)

Regulations under subsection (2) may specify arrangements by—

(a)

describing—

(i)

some or all of the steps to be taken by participants or other persons;

(ii)

the tax advantage sought;

(iii)

the marketing;

(iv)

characteristics of participants;

(b)

providing examples or illustrations;

(c)

such other means as the Commissioners consider appropriate.

(5)

It does not matter for the purposes of this section whether a person knows, or has reason to believe, that the arrangements fall within subsection (1).

160Meaning of promotion

(1)

For the purposes of section 159, a person promotes arrangements if, in the course of a business or with a view to monetary gain, the person—

(a)

communicates information with a view to encouraging another person to implement the arrangements or part of the arrangements,

(b)

makes the arrangements available for implementation by another person,

(c)

in circumstances where the arrangements have been implemented by another person, organises or manages any aspect of the arrangements, or

(d)

arranges (whether directly or indirectly) for another person or persons to take the steps above.

(2)

A person does not promote arrangements merely by—

(a)

providing goods or services on commercial terms in circumstances where the person does not know, and could not reasonably be expected to know, that the goods or services are being procured or used for the purposes of arrangements falling within section 159(1) (prohibition of promotion), or

(b)

providing legally privileged advice or legally privileged information.

(3)

For the purposes of subsection (2)(b), advice or information is legally privileged if a claim to legal professional privilege, or (in Scotland) to confidentiality of communications as between client and professional legal adviser, could be maintained in respect of it in legal proceedings.

161Procedure

(1)

Regulations under section 159(2) are to be made by statutory instrument.

(2)

A statutory instrument containing regulations under section 159(2) must be laid before the House of Commons after being made.

(3)

Regulations contained in a statutory instrument laid before the House of Commons under subsection (2) cease to have effect at the end of the period of 28 days beginning on the day on which the instrument is made unless, during that period, the instrument is approved by a resolution of the House of Commons.

(4)

In calculating the period of 28 days, no account is to be taken of any whole days that fall within a period during which—

(a)

Parliament is dissolved or prorogued, or

(b)

the House of Commons is adjourned for more than four days.

(5)

If the regulations cease to have effect as a result of subsection (3), that does not—

(a)

affect the validity of anything previously done under the regulations, or

(b)

prevent the making of new regulations.

Sanctions

162Civil penalties

(1)

A person who promotes arrangements in breach of section 159(1) is liable to a penalty.

(2)

The maximum penalty under this section is the sum of—

(a)

£1,000,000, and

(b)

£5,000 for each person who participated in the arrangements.

(3)

Before imposing a penalty under this section, an authorised officer of Revenue and Customs must—

(a)

notify the person of the fact that the authorised officer considers subsection (1) to apply, and

(b)

allow the person 30 days from the date of notification to make representations to HMRC.

(4)

In imposing a penalty under this section, an authorised officer of Revenue and Customs must have regard to—

(a)

the number of persons participating, or targeted to participate, in the arrangements,

(b)

the amount of tax that was likely at risk in connection with the arrangements,

(c)

whether and to what extent the person cooperated with HMRC, and

(d)

whether the wrongdoing was repeated, or continued over an extended period.

(5)

A penalty imposed under this section is to be treated as a penalty determined under section 100(1) of TMA 1970.

(6)

A penalty imposed under this section is to carry interest in accordance with section 101 of FA 2009.

(7)

A person is not liable to a penalty under this section in respect of anything for which the person has been convicted of an offence.

(8)

In paragraph 5(6) of Schedule 13 to FA 2020 (joint and several liability of company directors etc) after paragraph (f) insert—

“(g)

section 162 of FA 2026 (prohibition of promotion of certain tax avoidance arrangements: penalties).”

163Criminal offence

(1)

A person who promotes arrangements in breach of section 159(1) commits an offence.

(2)

A person who commits an offence under this section is liable—

(a)

on summary conviction, to—

(i)

in England and Wales, a fine, or

(ii)

in Scotland or Northern Ireland, a fine not exceeding the statutory maximum, or

(b)

on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or both.

164Criminal liability of responsible persons

(1)

If an offence under section 163 is committed by a body corporate or a partnership and—

(a)

is committed with the consent or connivance of a responsible person, or

(b)

is attributable to the neglect of a responsible person,

the responsible person commits the offence (as well as the body or partnership).

(2)

A “responsible person” means—

(a)

in relation to a body corporate other than one whose affairs are managed by its members—

(i)

a director, manager, secretary or other similar officer of the body, or a person purporting to act in such a capacity, or

(ii)

a shadow director within the meaning given in section 251 of the Companies Act 2006;

(b)

in relation to a limited liability partnership or other body corporate whose affairs are managed by its members—

(i)

a member exercising management functions, or purporting to do so, or

(ii)

in the case of a limited liability partnership, a shadow member;

(c)

in relation to a partnership, a partner or a person purporting to act in that capacity.

(3)

In this section, a “shadow member” means a person in accordance with whose directions or instructions the members of the limited liability partnership are accustomed to act, save that a person is not a shadow member by reason only of the fact that the members act on advice given by that person in a professional capacity.

General

165Interpretation and commencement

(1)

In this Chapter—

“arrangements” includes any agreement, scheme, arrangement or understanding of any kind whether or not legally enforceable involving one or more transactions, and includes a proposal for arrangements;

“authorised officer of Revenue and Customs” means an officer of Revenue and Customs who is, or is a member of a class of officers who are, authorised by the Commissioners for the purpose of this Chapter;

“Commissioners” means the Commissioners for His Majesty’s Revenue and Customs;

“HMRC” means His Majesty’s Revenue and Customs;

“promotion” has the meaning given in section 160;

“tax advantage” includes—

(a)

relief or increased relief from tax,

(b)

repayment or increased repayment from tax,

(c)

avoidance or reduction of a charge to tax or an assessment to tax,

(d)

avoidance of a possible assessment to tax,

(e)

deferral of a payment of tax or advancement of a repayment of tax, and

(f)

avoidance of an obligation to deduct or account for tax.

(2)

Section 159(1) comes into force two months after the day on which this Act is passed.