How HMRC's new information gathering powers may apply to your advisers, auditors and beyond

HMRC's new anti-avoidance information notice (AAIN) regime is notable not simply because it creates another information-gathering power. More importantly, it reflects HMRC's developing approach to obtaining information and documents at an earlier stage, from persons it reasonably suspects are connected with the promotion or facilitation of tax avoidance.

The recently published HMRC guidance confirms that these powers are designed as an investigative tool rather than an enforcement mechanism. An anti-avoidance information notice is not dependent on HMRC proving a tax loss or establishing that arrangements are ineffective. Instead, the question is whether the information sought is "reasonably required" for HMRC's statutory purposes.

For businesses, advisers and other professional firms, the most interesting aspect of the guidance may be the breadth of the "connected person" test.

How the information-gathering power operates

Traditionally, debates around HMRC information powers often centred on whether HMRC had sufficient grounds to investigate a tax position. The new guidance confirms that the AAIN provisions operate differently.

HMRC can use these powers at any stage of its engagement, including during its initial consideration of whether a person may be involved in activities connected with the promotion or facilitation of tax avoidance.

That is significant from a governance perspective. It demonstrates HMRC's focus on obtaining information earlier in the compliance process, enabling it to build evidence before reaching conclusions about the effectiveness of arrangements or pursuing formal action.

Who is a "connected person"?

The legislation adopts a broad definition.

A connected person includes someone whom HMRC reasonably suspects is:

• contravening an anti-avoidance enactment;

• connected to a person who is or has been contravening such an enactment; or

• connected to arrangements that led to the alleged contravention.

The guidance goes on to explain that connection can arise through corporate, partnership and trust relationships. It also extends to anyone who:

• is involved in making arrangements available;

• is involved in organising or managing arrangements; or

• benefits directly or indirectly from the arrangements.

The guidance also explains the threshold for suspicion. HMRC refers to the criminal authority of R v Da Silva, which states that suspicion means thinking there is a possibility, which is more than merely imaginable or fanciful, that relevant facts may be true.

Could your adviser be a connected person?

The breadth of the connected person test means that the AAIN regime is not confined to promoters or taxpayers. Based on HMRC's guidance, and depending on the facts of any particular arrangement, the regime could potentially extend to tax advisers, accountants, insurers and others involved in making arrangements available, organising or managing them, or deriving a direct or indirect benefit from them.

Against that backdrop, HMRC may seek information from a range of professional service providers connected with arrangements under review.

For example, tax advisers and accountants involved in the design, implementation, administration or promotion of arrangements could potentially fall within the scope of the connected person provisions where HMRC reasonably suspects the necessary connection exists. Equally, organisations providing services that support or facilitate arrangements may wish to consider whether their role could bring them within the ambit of the legislation.

The same question may arise for tax insurers. Where insurance products are linked to particular tax arrangements, HMRC may seek to understand the broader network of parties involved and the commercial relationships surrounding those arrangements. While each case will depend on its facts, the legislation is designed to help HMRC build a picture of the promoter and facilitator ecosystem rather than focus solely on taxpayers.

That does not mean every adviser associated with an arrangement is within scope, but many firms will want to consider not only whether they are a promoter, but whether HMRC could regard them as sufficiently connected to the arrangements to justify an information notice.

What about lawyers and auditors?

The position for legal advisers and auditors is particularly interesting.

The guidance itself acknowledges the breadth of the connected person definition. However, the legislation contains an important safeguard. AAINs do not require disclosure of information that is protected by legal professional privilege (LPP). Information in respect of which a claim to LPP could be maintained in legal proceedings remains excepted from the notice requirements.

Questions about whether information is protected by privilege may still require careful consideration. The government has introduced a dedicated procedure for resolving disputes about whether material is privileged, including the involvement of the tribunal where agreement cannot be reached.

A similar safeguard exists for auditors. An AAIN does not require an auditor to provide information held or created in the course of performing statutory audit functions, except where the auditor has assisted a client in preparing information for, or sending information to, HMRC. That distinction is likely to be of considerable practical relevance for audit firms whose clients are connected with arrangements under review.

Governance considerations

For boards and tax teams, the AAIN regime reinforces the importance of understanding who holds relevant information, where it is located and how it could be requested. For professional advisers, it underlines the need to understand both the scope of modern information powers and the limits imposed by legal professional privilege and the statutory audit function safeguard.

As HMRC applies these information-gathering powers, questions about whether an organisation is sufficiently connected to an arrangement to receive a notice, and whether particular communications are protected by privilege, are likely to become increasingly important aspects of tax risk management.

The connected person test may therefore prove to be one of the most significant features of the new regime. Not because it determines liability, but because it determines who HMRC can approach while it is still gathering the facts.

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at October 2026.  For more information see our terms & conditions.