Negligent Tax Advice Claims

Like it or not, we all have to pay tax, and many individuals and businesses quite properly take tax advice from specialist accountants or other financial advisers with a view to minimising how much tax actually have to pay.

And those advisers have a duty to provide us with the right advice. If they don’t, and you lose out, you could be entitled to claim compensation.

Can I Make a Claim?

When it comes to negligent tax advice, there are a wide variety of grounds for making a claim but some of the more common include advice given in respect of;

  • Tax avoidance schemes
  • Income and corporation tax
  • Capital gains tax
  • Stamp duty
  • VAT
  • Inheritance tax

The claim can cover a variety of financial losses including over payment of tax, interest and late payment penalties, which can prove substantial.

Who Can I Claim Against?

Usually the claim is against whoever provided you with the advice directly – often an accountant or other financial adviser.

But claims can also be made, on occasions, against a number of others including those who manage, promote or introduce you to illegal or failed tax avoidance schemes, for example.

I Received Negligent Advice about a Tax Avoidance Scheme – Can I Still Claim?

In principle yes, subject to the paragraph below about proving your negligence claim.

Recently the government has started to crackdown much harder on tax avoidance schemes – and it looks like this will only continue. As a result the number of claims in relation to these schemes has increased significantly – and is likely to continue doing so in the next few years.

The size of the compensation bill In respect of the schemes is likely to be huge, following the £13.6bn for PPI compensation and £1.05bn arising from the interest rate hedging products scandal.

What may be particularly frightening for many people is that following a ruling in September 2015, British courts have confirmed that HMRC can now claim back dated tax on avoidance schemes that were originally entered into legitimately and before new legislation outlawing such schemes was introduced

Among the more common reasons for making a successful claim for negligent advice about a tax scheme are the following;

  • Your adviser failed to provide enough information or advice
  • Your adviser recommended a scheme that simply didn’t suit your particular financial and personal circumstances
  • Your adviser recommended a scheme that was simply flawed
  • Your adviser recommended an illegal scheme, or one in breach of the financial regulations.

Tax Advice – Proving My Negligence Claim

Having to pay high levels of tax in the first place is bad enough, but many people find it quite intolerable when they suffer a big loss because of the wrong tax advice from a trusted adviser in the first place.

And any subsequent investigation by HMRC only makes matters worse.

In broad terms, to make a successful professional negligence claim in relation to tax advice, you will need to prove the following;

  1. That your adviser was acting for you and had a duty of care to you in respect of the advice which was given, or which should have been given to you
  2. That your adviser was negligent i.e. they didn’t take sufficient care when advising you in the first place about your payment of tax. This normally means that it was the kind of advice that a reasonably competent tax advisor or accountant would not have given.
  3. That you relied on that advice i.e. you have to prove that you took direct action as a result of the advice you received.
  4. That as a result of acting on that advice, you suffered a financial loss such as an unnecessarily high tax bill, interest or penalties imposed by HMRC.
  5. That you can’t recover any loss – e.g. that you can’t recover any over payment of tax from HMRC

What’s more, if your adviser claimed to be a tax specialist, that will certainly help you claim.

Is There a Time Limit?

Yes, there is normally a strict time limitation on bringing your claim against a tax adviser or accountant..

In general terms any claim must be made within 6  years of the original negligence – or alternatively within 3 years of the date you became aware of that negligence.

Please note, however, that there is an absolute 15 year limit from the date of the negligence beyond which you are unable to make a claim regardless of when you became aware of the negligence].

So our advice is simple – don’t delay, take action today and get in touch with us for FREE initial advice on FREEPHONE 0800 1404544

How Can I Fund My Negligent Tax Advice Claim?

There are a number of ways to potentially pay for your claim – including no-win no fee [or conditional fee agreements as they are also known] and fixed fees, which are often used for the initial assessment of your claim.

Our professional negligence team can explain your funding options to you.

However we strongly advise, where appropriate, the use of mediation to resolve your claim – and rest assured we will do our utmost to settle your claim without the need for the inevitably high legal costs involved in an expensive contested court application.

Working As Part of a Team

Getting the right specialist tax adviser on board is one of the most important parts of your claim.

If your existing accountant has the right tax specialism, we are more than happy to work with them. However many accountants don’t have the degree of expertise required. In that case we can help you find the right tax expert to support your claim – we have established a close working relationship with the specialist professional negligence team at leading accountants BDO.

How We Can Help

If you believe that the tax advice you received was negligent, and you suffered a financial loss as a result of at least £25,000, then don’t delay, get in touch with our team without delay.

We will;

  1. Provide FREE initial advice on the phone on FREEPHONE 0800 1404544
  2. Provide, where possible, an initial view on whether or not you might have a successful claim
  3. Investigate your claim further with a view to giving you more substantial advice on your chances of success. This will involve looking at the advice you are given, the terms of the retainer with your adviser, the way the advice was given to you and any supporting written or other materials that encouraged you to take the action that caused you a financial loss
  4. Explain your options if you decide to make a claim

Thinking of making a Negligent Tax Advice Claim? Contact us as soon as possible

Don’t delay getting in touch – or you could find that you lose your right to claim compensation entirely.

For a FREE first phone consultation about making your Claim, contact our specialist Solicitors on

  • FREEPHONE 0800 1404544 OR
  • Email our team using the contact form below

    Comments or questions are welcome.

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