HMRC are concerned about tax agents who are incompetent or are dishonest and are a ‘centre of infection’. Thus, HMRC have significant powers under FA 2012, s. 223 and Sch. 38 from 1 April 2013 to deal with dishonest conduct by tax agents in relation to a wide range of taxes, including VAT (Finance Act 2012, Sch. 38 (Tax Agents: Dishonest Conduct) (Appointed Day and Savings) Order 2013 (SI 2013/279 (C. 13)).
There are criminal powers which could be used to deal with dishonest agents, but in practice these are often too costly and time-consuming. Thus, HMRC need greater powers to deal cost effectively with dishonest agents.