Negligent Tax Advice

“In this world nothing can be said to be certain, except death and taxes.” Benjamin Franklin

Tax planning and avoidance 

All individuals and businesses will pay tax in some form, be it income, capital gains, stamp duty land tax  or corporation tax. It is also likely that they will have sought expert advice on the amount of tax payable from an accountant or financial adviser or tax specialist.

Financial professionals may often recommend beneficial tax planning arrangements, also known as tax avoidance schemes, which are designed to reduce the overall level of tax payable by their clients.

Investment Fund or Scheme Managers who promote of these types of schemes will often use accountants, financial advisers, or intermediaries to sell their product. Those intermediaries, or ‘introducers’ will usually be paid significant sums in commission which may impact upon their impartiality of the advice given.

The problems arise when it turns out that the scheme does not work. In other words, HMRC may determine that a scheme is not permissible, in which case the tax that the client thinks it has saved, has to be paid, along with penalties for late payment and interest. These sums can be considerable and can have a crippling effect on an individual or business.

So if you have relied upon the advice or representations of either the scheme managers, promoter or introducer, accountant or other tax adviser, to invest in a tax avoidance scheme which you now understand may not work, and you have or will suffer financial losses as a result, then you may be able to bring a professional negligence claim against them.

Have you received a Follower Notice or Accelerated Payment Notice (APN)?

Following recent law changes, HMRC can now demand a payment on account of the tax calculated as if the tax avoidance scheme had failed, whilst they investigate whether or not the scheme is permissible,

HMRC can require that tax be paid within 90 days of the notice with no rights of appeal. The issuing of an APN can be retrospective and therefore does not only apply to tax avoidance schemes implemented after APNs were introduced in 2014, but could affect any scheme which has been set up.

Your tax adviser or accountant may have advised that a scheme be disclosed under the ‘Disclosure of Tax Avoidance Schemes’ (DoTAS) rules, or has been subjected to a Follower Notice, and is therefore now exposed to an APN. Potentially, you were not actually required to disclose a scheme and may therefore have been put to great expense for no reason.. Alternatively, if you have not disclosed the existence of a scheme because of the advice you received, and have now been fined because of that, you may have a claim against your accountant or tax adviser.

Do you have a Claim against your Tax Adviser

In order to understand whether you may have a claim against your Tax Adviser or accountant, we would need to consider:

  • The nature and scope of  the advice sought and  given about the tax planning arrangement at the outset;
  • The terms of your retainer with the tax adviser or accountant
  • Where that advice came from (i.e. a senior tax barrister providing a written Opinion on the viability of the scheme);
  • How this advice was presented to you;
  • What documentation was provided in order to help you make an informed decision; and
  • Whether you are part of a much larger number of other individuals or businesses who have been ‘mis-sold’ the same scheme.


There are time limits to bring a professional negligence claim. You have 6 years from the act of negligence or 3 years from the date of knowledge to start court proceedings for a claim for professional negligence. The test for ascertaining the date of knowledge is when a reasonable person ought to have realised that there was a risk that negligence had occurred. There is a long stop date of 15 years from the act of negligence after which a claim may not be brought regardless of the date of knowledge. If you do not bring your claim in time, then your claim will usually be lost forever.

Funding your claim

We offer a number of options to fund professional negligence claims including Conditional Fee Agreements and fixed fees.

Why you should choose Seth Lovis & Co

We are experts in professional negligence. We are experts in litigation. We have a dedicated department that only deal with professional negligence claims. We will fight for our clients' best interests. Because of our expertise, we are able to offer flexible ways to fund your claim.

Contact our professional negligence solicitors

To arrange a free initial consultation with one of the members of our professional negligence team, contact us online or by phone on 0333 920 1466.

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