HMRC explains prohibited tax-scheme promotion

New guidance on an existing prohibition

HMRC published guidance on 30 October explaining sections 159 to 165 of the Finance Act 2026, concerning promotion of certain tax-avoidance arrangements. The guidance says the prohibition came into force on 19 May 2026. The publication is therefore new explanatory material about existing powers, not a statement that every aspect of the regime first becomes law on 30 October. Official source.

Which arrangements are addressed

The guidance describes arrangements marketed, or likely to be marketed, for a tax advantage with no realistic prospect of delivering it, and arrangements of a kind specified in regulations. It explains HMRC’s interpretation of those categories. That interpretation should be read with the legislation and any relevant regulations, rather than treated as permission to label every disputed tax position or legitimate planning exercise a prohibited scheme.

Promotion is wider than a sales pitch

The stated definition includes encouraging implementation, making arrangements available, organising or managing aspects after implementation, and arranging for others to do those things in business or for monetary gain. The guidance also describes limits for certain commercial suppliers without the relevant knowledge. A professional or business should examine its actual role, communications and knowledge instead of relying solely on its contractual job title.

A clearly hypothetical example

A business is offered a referral payment for introducing clients to a structure advertised as eliminating tax. Before distributing the material, it should establish how the claimed advantage is supported and whether its proposed conduct could fall within the promotion provisions. A disclaimer calling the introduction “administrative only” does not resolve the substance of that question. This example does not determine that any particular arrangement is prohibited.

Sanctions are potential outcomes, not automatic invoices

The guidance describes criminal sanctions and civil penalties, with a civil maximum of £1 million plus £5,000 per participant, subject to the applicable process. It explains representations and appeal rights and prevents a civil penalty for the same action where there has already been a criminal conviction. A headline maximum should not be presented as the inevitable amount in every case.

What to review before responding

Preserve promotional material, advice, agreements, payment records and the exact HMRC notice if one has arrived. Distinguish the arrangement’s legal analysis from the business’s own role in promoting it. Obtain advice on the relevant procedure and deadlines rather than ignoring correspondence or changing records retrospectively. The new guidance is a reason to review exposure carefully, without assuming that all professional advice or ordinary commercial supply falls within the prohibition.

Legal check date

Sources and law checked on 30 October 2026. Later developments are not reflected automatically. Application of the rules depends on the individual facts.