Purpose of the guidance 

The guidance is used by ICAEW’s disciplinary and regulatory committees as the starting point to determine the sanctions that will be imposed on members, or member firms, for misconduct or regulatory failings. It provides a list of common aggravating and mitigating factors, as well as factors that are specific to each offence. The sanctions vary depending on the seriousness of the matter. 

Proposed revisions 

The current guidance was issued in June 2023 and stands at 76 pages. The version published for consultation runs to 133 pages. There are revised definitions of “seriousness” to better reflect the nature of the misconduct and new or updated sections on: 

• ethical breaches;
• sexual misconduct;
• audit-related misconduct;
• non-cooperation;
• anti-money laundering compliance; and 
• tax-related breaches. 

Learn more about the consultation in this earlier article from ICAEW.  

Tax-related changes 

From a tax perspective, a number of additions are proposed to section 6 (general accountancy failings). In addition to the existing sanctions for poor tax work (sub-section e), there are three new sub-sections for breaches of any of the five PCRT standards for tax planning. These are: 

• the standard on ‘advising on tax planning arrangements’ (f);
• the ‘lawful’ and ‘disclosure and transparency’ standards (g); and
• the ‘client specific’ and ‘professional judgement and appropriate documentation’ standards (h). 

Aggravating factors for these breaches include the number of clients involved and whether the member is on HMRC’s list of named tax avoidance promoters. 

There are also three new sub-sections for where a member fails to keep their own tax affairs up to date. These are: 

• failure to maintain their own personal tax affairs (i); 
• failure to file their own tax returns (j); and
• incorrect filing of their own tax returns (k).  

There are common aggravating factors for sub-sections i to k, including:  

• large amounts of unpaid tax; 
• misreporting their tax liabilities; and
• failing to respond to HMRC’s enquiries or notices. 

Responding to the consultation 

There are 21 questions in the consultation document. ICAEW members can submit their comments by email to sanctionsconsultation@icaew.com or by post to: 

Regulatory & Conduct Director 
Professional Standards Department 
ICAEW 
Metropolitan House 
Avebury Boulevard 
Milton Keynes 
MK9 3FZ