Guidance on Fixed Penalties

This guidance provides information on the fixed penalties which can be applied by the CIOT and ATT in relation to administrative requirements, rules and procedures.  Members who have any queries in relation to fines issued to them should contact the Head of Professional Standards by emailing [email protected]

Introduction

Under the Taxation Disciplinary Scheme (TDS) Regulations 2014 applying up until 31 December 2023, there was a provision for the Taxation Disciplinary Board (’TDB’) to apply an administrative fine in circumstances where there had been a breach of the CIOT or ATT’s administrative requirements, rules, or procedures.

From 1 January 2024 the TDS Regulations permit the issuing of administrative fines for administrative breaches to be done by the CIOT and ATT.  This change means that fines can be issued more quickly to deal with administrative matters, and they can be concluded in a proportionate manner without a member or student needing to enter the formal disciplinary process.

At present the CIOT and ATT may publish details of the total number of fines issued but will not name the members who have been issued with one. This is subject to ongoing requirements particularly those required by the Office of Professional Body AML Supervision in relation to the CIOT and ATT’s roles as AML supervisors.

This guidance covers the circumstances in which fixed penalty fines can be issued as agreed between the CIOT, ATT and the TDB and are only relevant in situations which have been agreed to be breaches of the CIOT and ATT’s administrative requirements, rules, or procedures.

Background

The relevant provisions are set out in Regulations 3.2 (b)—3.3. These provide that the TDB Operations team may:

“3.2 After initial consideration, the TDB Operations Team may:

(a) Decide to refer the Complaint or part of the Complaint to a Reviewer to consider under this Regulation 3; and/or

(b) Agree with the Professional Standards Team that the Complaint or part of the Complaint is appropriate for the issue of an administrative fine in accordance with guidance published by the TDB, the Institute and/or the Association from time to time. Such an administrative fine must be paid to the Institute and/or the Association within 14 days of the Defendant being notified of such a decision, and the reasons for it, unless an extension of time is granted.

3.3 In the event that an administrative fine is issued pursuant to Regulation 3.2(b) but no payment is made within the specified period, the Complaint shall be referred to a Reviewer to consider under this Regulation 3.”

• A financial penalty (the fine) can be imposed on a member up to a maximum of £500 for each breach.

• Payment must be made within 14 days unless the Head of Professional Standards, CIOT Director of Public Policy or ATT Chief Executive grants an extension.

• If the member objects to the fine, they may request in writing that the complaint be referred to the TDB for a reviewer to consider. The request must be sent to the CIOT and ATT by emailing [email protected] within 14 days of receipt of the fine.

If such a case is referred to the reviewer, they will consider the case as set out in Regulation 3 of the TDS Regulations.

Nature of administrative breaches

• The main issue to be considered is what constitutes a breach of the CIOT and ATT’s administrative requirements, rules, or procedures. Many complaints of misconduct will entail some breach of the participants’ rules, as set out in the Professional Rules and Practice Guidelines (‘PRPG’). All serious allegations of such breaches will be referred by the CIOT and ATT for consideration under the normal procedures of the TDB for dealing with complaints, as described in Regulations 3.1—3.11.

• The reference to administrative requirements, rules or procedures is intended to relate to breaches of provisions which have been introduced by the CIOT and ATT for the sound regulation of the profession and of their memberships, but which do not impinge directly upon the public.

• The following are agreed circumstances that may be regarded as an administrative failure:

• Failure to submit a record of Continuing Professional Development (‘CPD’) by the deadline set by the CIOT or ATT;

• Minor infringement of the rules governing the designation of firms as Chartered Tax Advisers;

• Failure to renew AML supervision by the deadline set by the CIOT or ATT; Failures include:

• Failure to submit both the renewal form and payment

• Failure to submit a payment (form has been submitted)

• Failure to submit a form (payment has been submitted)

• Failure to submit an annual return by the deadline set by the CIOT or ATT;

• Failure to notify the participant that disciplinary proceedings have been upheld against them by another professional body to which the member belongs within the 2 month period required by PRPG.

If a member is already with the TDB for AML related failings, then the failure to complete AML renewal requirements will result in a fine which the member must pay, and the TDB will also be informed about the matter and the issue of the fine.

This is not intended to suggest that such failings are trivial, however, it is important that complaints are dealt with proportionately.

The administrative fine arrangements are intended to provide a quick and effective remedy for what are essentially minor failings, largely administrative in character.

Size of fixed penalty

• For a first offence the fine will be £350.

• For a second similar offence within a five-year period, the fine will be up to £500.

• Fines will be reviewed and updated on agreement with the TDB on a regular basis.

• These figures are applied to each individual breach.  For example, if a member fails to submit an AML renewal for two firms they might receive a penalty of £700 (£350 x 2).

• If there was a third offence by a member within a five-year period, the matter would be referred to the TDB for the reviewer to consider under normal TDS Regulation procedures.

Last reviewed June 2024