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Finance Act 2026

Type Public General Act

Publication 2026-03-18

Last updated 2026-10-01

State In force

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(b) the Commissioners have power under Part 9 of this Schedule to make an assessment on that person as to an amount of CBAM due from that person,

the assessments may be combined and notified to the person as one assessment.

(5) A notice of a combined assessment under sub-paragraph (4) must separately identify the amount being assessed in respect of repayments of CBAM.

Supplementary assessments

30

(1) Sub-paragraph (2) applies where—

(a) an assessment has been notified to a person under paragraph 29, and

(b) it appears to an officer of Revenue and Customs that the amount which ought to have been assessed as due exceeds the amount that has already been assessed.

(2) The officer of Revenue and Customs may—

(a) on or before the last day on which the assessment under paragraph 29 could have been made (see paragraph 32), make a supplementary assessment of the amount of CBAM due from the person, and

(b) where such a supplementary assessment is made, notify the amount to that person.

Further provision about assessments under paragraphs 29 and 30

31

(1) Where an amount has been assessed and notified to a person under paragraph 29 or 30, it is recoverable on the basis that it is an amount of CBAM due from that person.

(2) But sub-paragraph (1) does not have effect if, or to the extent that, the assessment has been withdrawn or reduced.

Time limit for assessments

32

An assessment under paragraph 29 or 30 may not be made more than 2 years after evidence of facts, sufficient in the opinion of the officer of Revenue and Customs making the assessment to justify making it, comes to the knowledge of any officer of Revenue and Customs.

Part 11 — Penalties

Penalties payable in connection with this Schedule

33

This Part of this Schedule provides for penalties payable in connection with this Schedule, as follows—

(a) paragraph 34 amends Schedule 41 to FA 2008 to impose a penalty for a failure to register with, or provide information to, HMRC under paragraph 2 of this Schedule;

(b) paragraph 35 amends Schedule 24 to FA 2021 to impose a penalty for a failure to make a return under paragraph 7 of this Schedule;

(c) paragraph 36 amends Schedule 24 to FA 2007 to impose a penalty for errors in returns under paragraph 7 of this Schedule and in other documents;

(d) paragraph 37 amends Schedule 26 to FA 2021 to impose a penalty for a failure to pay CBAM;

(e) paragraph 38 imposes a penalty for failing to make a notification under—

(i) paragraph 4 (changed or incorrect registration information);

(ii) Part 8 (death, incapacity or insolvency);

(f) paragraph 39 imposes a penalty for failing to keep or preserve records under Part 6 of this Schedule or regulations under that Part.

34

(1) Schedule 41 to FA 2008 (penalties: failure to notify and certain VAT and excise wrongdoing) is amended in accordance with sub-paragraphs (2) and (3).

(2) In the table in paragraph 1 (failure to notify etc), after the entry related to climate change levy, insert—

Carbon border adjustment mechanism	Obligation of a person under paragraph 2 of Schedule 17 to FA 2026.

(3) In paragraph 7, after sub-paragraph (9) insert—

(10) In the case of a relevant obligation under paragraph 2 of Schedule 17 to FA 2026 (which relates to the carbon border adjustment mechanism), the potential lost revenue is the amount of the tax (if any) for which P is liable for the period— (a) beginning with the end of the period specified in paragraph 2 (4) of Schedule 17 of FA 2026, and (b) ending with the day on which P registers under paragraph 2 of Schedule 17 to FA 2026 or HMRC otherwise becomes fully aware of P’s obligation to register.

(4) No failure to comply with an obligation under paragraph 2 of this Schedule “involves an offshore matter” for the purposes of Schedule 41 to FA 2008 (see paragraph 6A of that Schedule).

(5) Paragraph 16(1) of Schedule 41 to FA 2008 (penalties: failure to notify etc) has effect in its application to CBAM as if for “shall” there were substituted “may”.

35

In Schedule 24 to FA 2021 (penalties for failure to make returns etc), in the Table in paragraph 2(1), after item 5 (inserted by paragraph 1(3) of Schedule 15 to this Act) insert—

6	Carbon border adjustment mechanism	-	Return under paragraph 7 of Schedule 17 to FA 2026	-

36

(1) In the table in paragraph 1 of Schedule 24 to FA 2007 (penalties for errors), after the entry relating to climate change levy, insert—

Carbon border adjustment mechanism	Return under paragraph 7 of Schedule 17 to FA 2026.

(2) No inaccuracy in a return under paragraph 7 of this Schedule “involves an offshore matter” for the purposes of Schedule 24 to FA 2007 (see paragraph 4A of that Schedule).

(3) Paragraph 13(1) of Schedule 24 to FA 2007 (penalties for errors) has effect in its application to CBAM as if for “shall” there were substituted “may”.

37

In Schedule 26 to FA 2021 (penalties for failure to pay tax), in paragraph 1(1), after the table relating to value added tax insert—

Carbon border adjustment mechanism	Carbon border adjustment mechanism	Carbon border adjustment mechanism
1	Amount of CBAM payable under paragraph 6 of Schedule 17 to FA 2026 (except an amount within item 2, 3 or 4)	The date determined by paragraph 6 of Schedule 17 to FA 2026 as the date by which the amount must be paid
2	Amount of CBAM shown in an assessment made by HMRC in default of a return (see paragraph 3)	The date by which the amount would have been required to be paid if it had been shown in the return in question
3	Amount of CBAM shown in an amendment of a return	The date falling 30 days after the date on which the amendment is made
4	Amount of CBAM shown in an assessment made by HMRC otherwise than in default of a return (see paragraph 3)	The date falling 30 days after the date on which the assessment is made

38

(1) A person (P) is liable to a penalty if P fails to comply with a requirement to make a notification under—

(a) paragraph 4 (changed or incorrect registration information);

(b) paragraph 17 (death or incapacity).

(2) The penalty is—

(a) a fixed penalty of £500, and

(b) a daily penalty of £40 for each day on which P continues to fail to make the required notification after the last day on which P was permitted to do so.

39

A person (P) is liable to a penalty of £500 if P fails to comply with a requirement to keep or preserve a record under Part 6 of this Schedule or regulations under that Part.

40

(1) But a penalty is not payable under paragraph 38 or 39 if—

(a) P satisfies an officer of Revenue and Customs or, on appeal, the tribunal that there is a reasonable excuse for the failure, or

(b) the penalty would subject P to double jeopardy.

(2) For the purpose of sub-paragraph (1)(a)—

(a) an insufficiency of funds is not a reasonable excuse,

(b) where P relies on any other person to do anything, that is not a reasonable excuse unless P took reasonable care to avoid the failure, and

(c) where P had a reasonable excuse for the failure but the excuse has ceased, P is to be treated as having continued to have the excuse only if the failure is remedied without unreasonable delay after the excuse ceased.

(3) For the purpose of sub-paragraph (1)(b), the penalty would subject P to double jeopardy if, by reason of the conduct constituting the failure, P has been—

(a) convicted of an offence, or

(b) assessed to a penalty other than under paragraph 38 or 39.

Penalties under paragraphs 38 or 39: administration and supplementary provision

41

The following paragraphs of this Part of this Schedule apply in relation to a penalty under paragraph 38 or 39.

42

(1) Where a person is liable to a penalty, an officer of Revenue and Customs—

(a) may assess the amount of the penalty, and

(b) where such an assessment is made, must notify the person of the amount.

(2) Sub-paragraph (3) applies where—

(a) an officer of Revenue and Customs has made an assessment of a penalty, and

(b) it appears to the officer that the amount which ought to have been assessed exceeds the amount that has already been assessed.

(3) The officer may—

(a) may make a supplementary assessment of the amount of the penalty, and

(b) where such an assessment is made, must notify the person of that amount.

(4) An amount assessed and notified to a person under sub-paragraph (1) or (3) is recoverable on the basis that it is an amount of CBAM due from that person.

(5) But sub-paragraph (4) does not apply if, or to the extent that, the assessment has been withdrawn or reduced.

(6) The fact that conduct giving rise to a penalty has ended before an assessment is made under sub-paragraph (1) or (3) does not affect the power of an officer of Revenue and Customs to make such an assessment.

43

(1) Sub-paragraph (2) applies where—

(a) an officer of Revenue and Customs assesses a person to an amount of penalty under paragraph 42 (1) or (3), and

(b) the person is also assessed under Part 9 of this Schedule for an accounting period to which the conduct attracting the penalty relates.

(2) The assessments under paragraph 42 (1) or (3) and under Part 9 of this Schedule may be combined and notified to the person as one assessment.

(3) A notice of a combined assessment under sub-paragraph (2) must separately identify the penalty being assessed.

44

(1) Where an assessment is made under paragraph 42 (1) or (3) to an amount of daily penalty under paragraph 38 (2)(b), the notification of that amount must specify a date, not later than the day on which the notification is given, to which the amount is assessed.

(2) If the failure attracting the penalty continues after that date, a further assessment or further assessments may be made under paragraph 42 (1) or (3) in respect of the continued failure.

(3) Sub-paragraph (4) applies where—

(a) a notification of an amount of a penalty specifies a date under sub-paragraph (1), and

(b) the failure in question is remedied within such period as may for the purpose of this sub-paragraph be specified in the notification.

(4) The failure is to be deemed to be remedied on the date specified under sub-paragraph (1).

45

(1) An officer of Revenue and Customs assessing a penalty or, on appeal, the tribunal may reduce the penalty to such amount (including nil) as they think proper.

(2) On an appeal relating to a penalty reduced by an officer of Revenue and Customs under sub-paragraph (1), the tribunal may cancel the whole or any part of the officer’s reduction.

46

(1) An assessment under paragraph 42 (1) or (3) may not be made after the end of the relevant period.

(2) Except in a case within sub-paragraph (3), the relevant period is the period of 4 years beginning with the day on which the failure attracting the penalty began.

(3) Where an assessment under paragraph 42 (1) or (3) is made in a case involving loss of CBAM—

(a) brought about deliberately by the person liable to the penalty, or

(b) attributable to a failure by that person to comply with a requirement under Part 2 of this Schedule,

the relevant period is the period of 20 years beginning with the day on which the failure attracting the penalty began.

(4) In sub-paragraph (3) the reference to a loss brought about by a person includes a reference to a loss brought about by another person acting on behalf of that person.

Penalties under paragraphs 38 and 39: power to amend in light of inflation

47

The Treasury may by regulations amend paragraph 38 or 39 so as to substitute for an amount for the time being specified there another amount that takes account of inflation.

Part 12 — Reviews and appeals

Appealable decisions

48

(1) A person may appeal against a decision of the Commissioners or an officer of Revenue and Customs in respect of any of the following matters—

(a) where a person has made a return under paragraph 7 (returns) in respect of an accounting period—

(i) whether or not the person is liable to pay an amount of CBAM for that period;

(ii) the amount of CBAM payable by the person for that period;

(b) the registration, or de-registration, of a person under Part 2 of this Schedule;

(c) whether to treat a person as if they were a registered person for the purposes of CBAM under paragraph 17 (5) or 18 (2);

(d) whether to extend such treatment under paragraph 17 (6);

(e) whether the Commissioners are liable to repay an amount to a person under paragraph 25 (2) or the amount of such a repayment;

(f) whether or not the repayment of an amount under paragraph 25 (2) is excessive (see paragraph 29);

(g) the amount that a person is liable to pay the Commissioners to comply with an obligation under paragraph 28 (3)(b), (c) or (e);

(h) whether a person is liable to a penalty under paragraph 38 or 39 or the amount of such a penalty;

(i) the period by reference to which payments of CBAM are to be made.

(2) A person may also appeal against the following directions of the Commissioners or an officer of Revenue and Customs—

(a) a direction under paragraph 15;

(b) a direction under paragraph 16 (2) or (6).

(3) In sub-paragraph (1), “amount of CBAM” includes an amount recoverable on the basis that it is an amount of CBAM.

(4) In the following provisions of this Part of this Schedule—

(a) “decision” means a decision, determination or direction within sub-paragraph (1) or (2);

(b) references to appealing against a decision are to appealing against the decision under paragraph 48

Offer of a review to a person notified of a decision

49

(1) HMRC must offer a person (P) who has been notified of a decision that they may appeal against a review of the decision.

(2) The offer of a review must be made by notice given to P at the same time as the decision is notified to P.

(3) P has a period of 30 days, beginning with the date of the document notifying P of the decision, to accept the offer (if P chooses to) by notifying HMRC.

(4) The offer is to be treated as withdrawn if P has appealed against the decision.

(5) This paragraph does not apply in relation to a decision consisting of a conclusion of a review.

Right of other persons to require review

50

(1) A person, other than P, who has the right to appeal against a decision may require a review of the decision by notifying HMRC.

(2) But that right to require a review ceases if the person appeals against the decision.

(3) A notification under sub-paragraph (1) must be made within the period of 30 days beginning with the day on which the person becomes aware of the decision.

Duty to review

51

(1) An officer of Revenue and Customs must review a decision if—

(a) P has notified HMRC under paragraph 49 accepting the offer of a review, or

(b) a person other than P has notified HMRC under paragraph 50 that they require a review.

(2) But the officer must not review the decision if any person who has the right to appeal against the decision has done so before HMRC has been notified as described in sub-paragraph (1).

Extension of time to accept or require review

52

(1) An officer of Revenue and Customs may by notice extend (or further extend) the period mentioned in paragraph 49 (3) or 50 (3).

(2) The period is extended to the end of the period of 30 days beginning with—

(a) the date of the notice, or

(b) any other date set out in the notice or a further notice.

Review out of time

53

(1) This paragraph applies if—

(a) P has not accepted the offer of a review of a decision within the period mentioned in paragraph 49 (3) (including as extended under paragraph 52) and makes a request to HMRC in writing for a review out of time, or

(b) a person other than P who may require a review of a decision has not done so within the period mentioned in paragraph 50 (3) (including as extended under paragraph 52) and makes a request to HMRC in writing for a review out of time.

(2) An officer of Revenue and Customs must review the decision if the officer is satisfied that the person—

(a) had a reasonable excuse for not accepting the offer of a review or requiring the review within the applicable period, and

(b) made the request without unreasonable delay after the excuse had ceased to apply.

(3) But the officer must not review the decision if any person who has the right to appeal against the decision has done so before the request was made.

The review

54

(1) This paragraph applies if an officer of Revenue and Customs is required to undertake a review under paragraph 51 or 53.

(2) The nature and extent of the review are to be such as appear appropriate to the officer in the circumstances.

(3) For the purposes of sub-paragraph (2), the officer must have regard to steps taken before the beginning of the review by—

(a) the decision-maker in reaching the decision, and

(b) any person in seeking to resolve disagreement about the decision.

(4) The review must take account of any representations made by the person requiring the review, at a stage which gives the officer a reasonable opportunity to consider them.

(5) The review may conclude that the decision is to be—

(a) upheld,

(b) varied, or

(6) The officer must give the person who required the review notice of the conclusions of the review and their reasoning before the end of—

(a) the period of 45 days beginning with the relevant date, or

(b) such other period as the officer and the person who required the review may agree.

(7) In sub-paragraph (6), “the relevant date” means—

(a) in a case falling within paragraph 49, the date HMRC received the person’s notification accepting the offer of a review,

(b) in a case falling within paragraph 50, the date HMRC received notification from the person requiring a review, or

(c) in a case falling within paragraph 53, the date on which the officer decided they were under a duty to undertake the review.

(8) Where an officer of Revenue and Customs is required to undertake a review but does not give notice of the conclusions within the period specified in sub-paragraph (6), the review is to be treated as having concluded that the decision is upheld.

(9) If sub-paragraph (8) applies, the officer must notify the person who required the review of the conclusion which the review is treated as having reached.

The review: penalties under Schedule 24 to FA 2021

55

(1) This paragraph applies if HMRC are required, by virtue of paragraph 23(1) of Schedule 24 to FA 2021, to undertake a review under paragraph 51 or 53 of a penalty decision in respect of which an appeal lies under paragraph 22(b) of that Schedule.

(2) The review may also conclude that HMRC’s decision that the person requiring the review was liable to any of the penalty points by virtue of which they were liable to the penalty in respect of which the appeal lies is to be—

(a) upheld, or

(b) cancelled.

(3) Sub-paragraph (2) applies in relation to a penalty point even if the time limit for appealing against it expired before the relevant date.

(4) Sub-paragraph (2) does not apply in relation to a penalty point if—

(a) it was concluded on an earlier review required to be undertaken under paragraph 51 or 53 that HMRC’s decision that the person who required the review was liable to the penalty point was to be upheld, or

(b) HMRC's decision that the person who required the review was liable to the penalty point has been affirmed on appeal.

(5) In sub-paragraph (3) “relevant date” has the same meaning as in paragraph 54 (6) (see paragraph 54 (7)).

56

(1) If the conclusions of a review include conclusions reached by virtue of paragraph 55 and the conclusions of the review are final, sub-paragraphs (4) and (5) of paragraph 24 of Schedule 24 to FA 2021 apply but with the following modifications—

(a) references to the appeal under paragraph 22(b) of that Schedule are to be read as references to the review required to be undertaken under paragraph 51 or 53 (as the case may be),

(b) references to the tribunal are to be read as references to HMRC, and

(c) references to cancelling a decision are to be read as references to concluding that HMRC’s decision is to be cancelled.

(2) For the purposes of sub-paragraph (1), the conclusions of a review are to be treated as final only if the period specified in paragraph 57 (3)(b), (4)(b) or (5) for appealing the reviewed decision has ended and no appeal has been made within that period.

Bringing of appeals

57

(1) An appeal under paragraph 48 is to be made to the tribunal before—

(a) the end of the period of 30 days beginning with—

(i) in a case where P is the appellant, the date of the document notifying P of the decision to which the appeal relates, or

(ii) in a case where a person other than P is the appellant, the day on which that person becomes aware of the decision, or

(b) if later, the end of the period in which the appellant may accept or require a review (see paragraph 49 (3) or 50 (3)), including as extended under paragraph 52.

(2) But this is subject to sub-paragraphs (3) to (5).

(3) In a case where a review of the decision has been required under paragraph 51—

(a) an appeal may not be made until the conclusion date, and

(b) any appeal is to be made within the period of 30 days beginning with that date.

(4) In a case where a review of the decision has been requested under paragraph 53—

(a) an appeal may not be made—

(i) unless an officer of Revenue and Customs has notified the person who requested the review as to whether or not a review will be undertaken, and

(ii) if an officer of Revenue and Customs has notified that person that a review will be undertaken, before the conclusion date;

(b) any appeal where paragraph (a)(ii) applies is to be made within the period of 30 days beginning with the conclusion date;

(c) if an officer of Revenue and Customs has notified the person who requested the review that a review will not be undertaken, an appeal may be made only if the tribunal gives permission to do so.

(5) In a case where paragraph 54 (8) applies, any appeal is to be made at any time in the period beginning with the end of the applicable period in paragraph 54 (6) and ending with the date 30 days after the conclusion date.

(6) An appeal may be made after the end of any period specified by this paragraph if the tribunal gives permission to do so.

(7) In this paragraph, “conclusion date” means the date of the document notifying the conclusions of the review.

Further provision about appeals

58

(1) An appeal under paragraph 48 relating to a decision that an amount is due from a person may not be entertained by the tribunal unless the amount which HMRC have determined to be due has been paid to or deposited with the Commissioners.

(2) But sub-paragraph (1) does not apply if—

(a) HMRC are satisfied or, if HMRC are not satisfied but the tribunal has decided, on the application of the appellant, that the requirement to pay or deposit the amount would cause the appellant to suffer hardship, and

(b) the appellant has—

(i) paid or deposited such other amount (if any) by way of security, or

(ii) provided such other security,

as HMRC or, as the case may be, the tribunal consider appropriate.

(3) Notwithstanding sections 11 and 13 of the Tribunals, Courts and Enforcement Act 2007, the decision of the tribunal as to the issue of hardship is final.

Determination on appeal

59

(1) Where, on an appeal under paragraph 48—

(a) it is found that an assessment in respect of the appellant is an assessment for an amount that is less than it ought to have been, and

(b) the tribunal give a direction specifying the correct amount,

the assessment has effect as an assessment of the amount specified in the direction and (without prejudice to any power under this Schedule to reduce the amount of interest payable on the amount of an assessment) as if it were an assessment notified to the appellant in that amount at the same time as the original assessment.

(2) Where the tribunal allows an appeal under paragraph 48 (1)(c), (d) or (i) or (2) on the ground that the decision-maker could not reasonably have arrived at the decision, the tribunal may—

(a) direct that the decision, so far as it remains in force, is to cease to have effect from such time as the tribunal may direct, or

(b) require an officer of Revenue and Customs to conduct, in accordance with the directions of the tribunal, a review or a further review of the original decision as appropriate.

(3) Where, on an appeal under paragraph 48, the tribunal find that a liability to a penalty or to an amount of interest arises, the tribunal must not give any direction for the modification of the amount payable in respect of that liability except—

(a) in exercise of a power conferred on the tribunal by Part 11 of this Schedule (penalties), or

(b) for the purpose of making the amount payable conform to the amount due in accordance with this Part of this Act.

(4) Sections 85 and 85B of VATA 1994 (settling of appeals by agreement and payment of tax where there is a further appeal) apply in relation to an appeal under paragraph 48 of this Schedule as they apply to an appeal under section 83 of VATA 1994, reading—

(a) references to section 83 of that Act as references to paragraph 48 of this Schedule, and

(b) the references to value added tax as references to CBAM.

Part 13 — Service

60

(1) Anything that may or must be given, notified or issued to a person (P) under this Part of this Act, or provision made under this Part of this Act, may be given, notified or issued by sending it to P or to P’s representative by post, addressed to P’s, or (as the case may be) P’s representative’s, last known address.

(2) Anything given to P’s representative is to be treated as having been given to P.

(3) In this section, “representative”, in relation to P, means—

(a) any of P’s personal representatives;

(b) any person holding office as receiver in relation to P or any of P’s property;

(d) a trustee (or interim trustee) in a sequestration of P’s estate under the Bankruptcy (Scotland) Act 2016;

(e) any other person acting in a representative capacity in relation to P.

Part 14 — Interpretation

61

In this Schedule, “the tribunal” means the First-tier Tribunal or, where determined by or under Tribunal Procedure Rules, the Upper Tribunal.

Schedule 18 — Offences relating to CBAM

Part 1 — Fraudulent evasion

1

(1) A person commits an offence if the person is knowingly concerned in, or in the taking of steps with a view to, the fraudulent evasion (by that person or another person) of CBAM.

(2) The reference in sub-paragraph (1) to the evasion of CBAM includes a reference to obtaining—

(a) relief relating to CBAM, or

(b) a repayment of CBAM,

in circumstances where there is no entitlement to it.

(3) A person guilty of an offence under this paragraph is liable—

(a) on summary conviction in England and Wales—

(i) to imprisonment for a term not exceeding the general limit in a magistrates’ court,

(ii) to a fine not exceeding £20,000 or (if greater) three times the total of the amounts of CBAM that were, or were intended to be, evaded, or

(iii) to both;

(b) on summary conviction in Scotland—

(i) to imprisonment for a term not exceeding 12 months,

(ii) to a fine not exceeding the statutory maximum or (if greater) three times the total of the amounts of CBAM that were, or were intended to be, evaded, or

(iii) to both;

(i) to imprisonment for a term not exceeding 6 months,

(ii) to a fine not exceeding the statutory maximum or (if greater) three times the total of the amounts of CBAM that were, or were intended to be, evaded, or

(iii) to both;

(d) on conviction on indictment—

(i) to imprisonment for a term not exceeding 14 years,

(ii) to a fine, or

(iii) to both.

(4) In sub-paragraph (3), the references to the amounts of CBAM that were, or were intended to be, evaded include—

(a) the amounts of any relief relating to CBAM, and

(b) the amounts of any repayment of CBAM,

which were, or were intended to be, obtained in circumstances when there was no entitlement to them.

(5) In determining for the purposes of sub-paragraph (3) the amounts of CBAM that were, or were intended to be, evaded, no account is to be taken of the extent to which any liability to tax of a person would be, or would have been, reduced by the amount of any relief relating to CBAM or repayment of CBAM to which the person was, or would have been, entitled.

Part 2 — Misstatement

2

(1) A person commits an offence if, for purposes connected with CBAM, the person—

(a) produces or provides, causes to be produced or provided, or otherwise makes use of any document which is false in a material particular, and

(b) does so intending to deceive any person or to secure that a machine will respond to the document as if it were a true document.

(2) A person commits an offence if, in providing any information under any provision made by or under this Part of this Act, the person—

(a) makes a statement which the person knows to be false in a material particular, or

(b) recklessly makes a statement which is false in a material particular.

(3) A person guilty of an offence under this paragraph is liable—

(a) on summary conviction in England and Wales—

(i) to imprisonment for a term not exceeding 6 months,

(ii) to a fine not exceeding £20,000, or

(iii) to both;

(b) on summary conviction in Scotland—

(i) to imprisonment for a term not exceeding 6 months,

(ii) to a fine not exceeding the statutory maximum, or

(iii) to both;

(i) to imprisonment for a term not exceeding 6 months,

(ii) to a fine not exceeding the statutory maximum, or

(iii) to both;

(d) on conviction on indictment—

(i) to imprisonment for a term not exceeding 14 years,

(ii) to a fine, or

(iii) to both.

(4) In the case of an offence under this paragraph where—

(a) the document referred to in sub-paragraph (1) is a return required under Part 3 of Schedule 17, or

(b) the information referred to in sub-paragraph (2) is contained in or otherwise relevant to such a return,

the maximum amount of the fine on summary conviction is the greater of £20,000 or the statutory maximum (as the case may be), and the amount equal to three times the sum of the amounts (if any) by which the return understates any person’s liability to CBAM.

(5) In sub-paragraph (4) the reference to the amount by which a return understates a person’s liability to CBAM is the sum of—

(a) the amount (if any) by which the person’s gross liability is understated, and

(b) the amount (if any) by which any entitlements of the person to relief relating to CBAM and repayments of CBAM is overstated.

(6) In sub-paragraph (5) “gross liability” means liability to CBAM before any deduction is made in respect of any entitlements to relief relating to CBAM and repayments of CBAM.

Part 3 — Proceedings

3

Sections 145 to 155 of CEMA 1979 (proceedings for offences, mitigation of penalties and certain other matters) apply in relation to offences and penalties under this Schedule as they apply in relation to offences under the customs and excise Acts.

Schedule 19 — Supplementary amendments relating to CBAM

Provisional collection of CBAM

1

In section 1 of the Provisional Collection of Taxes Act 1968 (temporary statutory effect of House of Commons resolutions), in subsection (1), after “climate change levy,” insert “carbon border adjustment mechanism,”.

Information and inspection powers

2

(1) Schedule 36 to FA 2008 (information and inspection powers) is amended as follows.

(2) In the table in paragraph 61A(2) (definition of involved third parties), after item 14 insert—

15	A person involved (in any capacity) in the production, or importation to or exportation from the United Kingdom, of CBAM goods (within the meaning of section 2 of FA 2026) or in connected activities	Documents relating to matters in which the person is or has been involved	Carbon border adjustment mechanism
16	A person involved (in any capacity) in the supply, storage purchase, sale or transportation of CBAM goods (within the meaning of section 2 of FA 2026)	Documents relating to matters in which the person is or has been involved	Carbon border adjustment mechanism

(3) In paragraph 63(1) (definition of tax), after paragraph (k) insert—

(ka) carbon border adjustment mechanism,

Serial tax avoidance

3

In paragraph 4(2) of Schedule 18 to FA 2016 (serial tax avoidance: definition of indirect tax), after “climate change levy” insert—

carbon border adjustment mechanism

Disclosure of tax avoidance schemes

4

In paragraph 2(1) of Schedule 17 to F(No.2)A 2017 (disclosure of tax avoidance schemes: definition of indirect tax), after “climate change levy” insert—

carbon border adjustment mechanism

Schedule 20 — Registration of tax advisers: exceptions

1

(1) A tax adviser does not contravene section 223(1) (prohibited interaction with HMRC) in any of the following circumstances—

(a) where the adviser provides payroll, or other tax or accounting, software to a client for use in relation to the client’s tax affairs and the adviser interacts with HMRC in their capacity as such a provider;

(b) where the adviser interacts with HMRC in relation to—

(i) any matter relating to a duty of customs or to any provision, so far as relating to a duty of customs, made by or under the customs and excise Acts or Union customs legislation, or

(ii) any matter relating to a duty of excise or import VAT that is connected to a matter within sub-paragraph (i);

(ca) where the adviser is an IOSS representative and interacts with HMRC in their capacity as such;

(d) where the adviser is a NI tax representative and interacts with HMRC in their capacity as such;

(e) where the adviser is a UK representative and interacts with HMRC in their capacity as such;

(ea) where the adviser interacts with HMRC in relation to a tax that is not payable to HMRC (such as council tax or non-domestic rates);

(eb) where the adviser interacts with HMRC in relation to the provision of a valuation of property under section 10 of CRCA 2005 (the valuation office);

(f) where the adviser interacts with HMRC in relation to a client who is a group undertaking in relation to the adviser;

(g) where the adviser interacts with HMRC in relation to an appeal to a court or tribunal;

(h) where the adviser interacts with HMRC in order to comply with an obligation of the adviser under any enactment (including this Act);

(i) where the adviser interacts with HMRC in response to a request for information from HMRC.

(2) In this paragraph—

“the customs and excise acts” has the meaning given by section 1(1) of CEMA 1979 (interpretation);

“group undertaking” has the meaning given by section 1161(5) of the Companies Act 2006 (meaning of “undertaking” and related expressions);

“import VAT” means value added tax chargeable by virtue of section 1(1)(c) of VATA 1994 (importation of goods into the United Kingdom);

“IOSS representative” means a person registered as an IOSS representative under Schedule 9ZE to VATA 1994 (distance selling of goods imported to Northern Ireland: special accounting scheme) (see Part 5 of that Schedule);

“NI tax representative” has the meaning given by regulation 76(2) of the Excise Goods (Holding, Movement and Duty Point) Regulations 2010 (S.I. 2010/593) (excise duty and distance sales: NI representatives), as those Regulations have effect subject to the Excise Duties (Northern Ireland Miscellaneous Modifications and Amendments) (EU Exit) Regulations 2020 (S.I. 2020/1559);

“UK representative” has the meaning given by section 123 (vaping product duty: UK representatives);

“Union customs legislation” has the meaning given by section 37(1) of TCTA 2018 (minor definitions);

“VAT representative” has the meaning given by section 48(2A) of VATA 1994 (VAT representatives).

Schedule 21 — Registration of tax advisers: reviews and appeals

Appealable decisions

1

A person may appeal to the tribunal against a decision of an officer of Revenue and Customs in respect of any of the following matters—

(a) whether to approve the person’s application for registration under section 230 (application for registration);

(b) whether to suspend the person’s registration under section 232 (suspension of registration);

(d) whether to assess the person to a financial penalty under section 234 or 235 (prohibited interactions with HMRC);

(e) whether to issue a temporary or permanent ineligibility order to the person under section 236 or 237 (ineligibility orders);

(f) whether to assess the person to a financial penalty under section 238 (failure to notify clients);

(g) whether to approve an application under paragraph 10 (temporary relief from suspension of registration pending review or appeal: cases other than amount of tax etc overdue);

(h) whether to revoke such an approval, or to impose or vary any conditions or restrictions that such an approval is subject to, under paragraph 10.

Offer of review

2

(1) HMRC must offer a person a review of a decision that has been notified to the person if an appeal against the decision may be brought under paragraph 1.

(2) The offer of a review must be made by notice to the person at the same time as the decision is notified to them.

(3) This paragraph does not apply in relation to—

(a) a decision mentioned in paragraph 1 (g) or (h) (temporary relief from suspension of registration pending review or appeal: cases other than amount of tax etc overdue), or

(b) a decision consisting of a conclusion of a review under this Schedule.

Time to accept offer of review

3

(1) Where HMRC have offered a person a review of a decision under paragraph 2, the person may accept the offer by notice to HMRC within the period of 30 days beginning with the day on which notice of the offer was issued.

(2) An officer of Revenue and Customs may by notice extend the period within which a person may accept the offer to—

(a) the end of the period of 30 days beginning with the date of the notice, or

(b) any other date set out in the notice or a further notice.

(3) But an officer may not give a notice under sub-paragraph (2) after the period within which a person may accept the offer has ended.

Review out of time

4

(1) Where HMRC have offered a person a review of a decision under paragraph 2, the person may accept the offer by notice to HMRC after the period for accepting the offer has ended if an officer of Revenue and Customs agrees.

(2) An officer of Revenue and Customs must agree to an offer being accepted under this paragraph if the person has requested in writing that HMRC do so and the officer is satisfied that—

(a) there was a reasonable excuse for not accepting the offer before the period for accepting the offer had ended, and

(b) the request has been made without unreasonable delay after the excuse has ceased to apply.

(3) If a request of the kind mentioned in sub-paragraph (2) is made, an officer of Revenue and Customs must notify the person whether they agree to the request.

No review after appeal to the tribunal

5

Where HMRC have offered a person a review of a decision under paragraph 2, the person may not accept the offer under paragraph 3 or 4 if they have appealed to the tribunal against the decision.

Review

6

(1) This paragraph applies if a person accepts an offer under paragraph 3 or 4 to review a decision.

(2) An officer of Revenue and Customs must review the decision.

(3) The nature and extent of the review are to be such as appear appropriate to the officer in the circumstances.

(4) The review must take account of any representations made by the person at a stage which gives the officer a reasonable opportunity to consider them.

(5) The review may conclude that the decision is to be—

(a) upheld,

(b) varied, or

(6) The officer must give the person notice of the conclusions of the review and their reasoning before the end of—

(a) the period of 45 days beginning with the day on which HMRC received notice of the person’s acceptance of the offer to review the decision, or

(b) such other period as the officer and the person may agree.

(7) Where an officer of Revenue and Customs is required to undertake a review but does not give notice of the conclusions within the period specified in sub-paragraph (6), the review is to be treated as having concluded that the decision is upheld.

(8) If sub-paragraph (7) applies, an officer of Revenue and Customs must notify the person of the conclusion which the review is treated as having reached.

Bringing of appeals

7

(1) This paragraph applies where HMRC have offered to review a decision that a person may appeal against to the tribunal.

(2) The right of the person at any time to appeal to the tribunal depends on whether or not the person has accepted the offer at that time.

(3) If the person has accepted the offer, the person—

(a) may not appeal to the tribunal before the beginning of the post-review period;

(b) may appeal to the tribunal after the end of that period only if the tribunal gives permission.

(4) If the person has not accepted the offer, the person—

(a) may appeal to the tribunal within—

(i) the period of 30 days beginning with the day on which notice of the offer to review the decision was issued by HMRC, or

(ii) if the period for accepting the offer has been extended under paragraph 3 (2), such extended period;

(b) may appeal to the tribunal after the end of that period only if the tribunal gives permission.

(5) In this paragraph “post-review period” means—

(a) the period of 30 days beginning with the day on which notice of the conclusions of the review was issued by an officer of Revenue and Customs, or

(b) where paragraph 6 (7) applies, the period beginning with the end of the period specified in paragraph 6 (6) and ending 30 days after the day on which the notification under paragraph 6 (8) is issued by an officer of Revenue and Customs.

Powers of tribunal

8

On an appeal under paragraph 1 that is notified to the tribunal, the tribunal may confirm, vary or cancel the decision.

Temporary relief from suspension of registration pending review or appeal: amount of tax etc overdue

9

(1) This paragraph applies where—

(a) an authorised officer of Revenue and Customs decides under section 232 (1) to suspend a tax adviser’s registration,

(b) the decision is made solely on the basis that the adviser or a relevant individual of the adviser does not meet the condition in section 227 (2)(a) (amount of tax etc overdue), and

(i) accepted an offer under this Schedule to review the decision, or

(ii) appealed against the decision to the tribunal.

(2) The adviser may apply to HMRC to suspend the effect of the decision pending the outcome of the review or appeal.

(3) An authorised officer of Revenue and Customs must, by notice, approve an application made under sub-paragraph (2).

(4) A notice under sub-paragraph (3) must—

(a) state the date from which it has effect, and

(b) in a case where the adviser’s registration has already been suspended, temporarily reinstate the adviser’s registration.

(5) The day on which the approval of an application under this paragraph (including any temporary reinstatement of the adviser’s registration) expires is—

(a) in a case where the decision to suspend the tax adviser’s registration is cancelled on a review under this Schedule, the day on which it is cancelled;

(b) in a case where the decision to suspend the tax adviser’s registration is upheld on a review under this Schedule, the last day on which an appeal could be brought against that decision (ignoring any possibility of an appeal brought out of time with permission), unless paragraph (c) applies;

(c) in a case where an appeal (other than an appeal brought out of time with permission) is brought in respect of the decision to suspend the tax adviser’s registration, the day on which the appeal is finally determined.

(6) HMRC may specify in a notice published by them provision about the form, manner, timing and content of applications under this paragraph.

Temporary relief from suspension of registration pending review or appeal: other cases

10

(1) This paragraph applies where—

(a) an authorised officer of Revenue and Customs decides under section 232 (suspension of registration) to suspend a tax adviser’s registration,

(b) paragraph 9 (amount of tax etc overdue) does not apply in relation to the decision, and

(i) accepted an offer under this Schedule to review the decision, or

(ii) appealed against the decision to the tribunal.

(2) The adviser may apply to HMRC to suspend the effect of the decision pending the outcome of the review or appeal.

(3) An authorised officer of Revenue and Customs may, by notice, approve an application under sub-paragraph (2) only if they are satisfied that—

(a) the adviser has demonstrated that if the application were not approved the adviser would be unable to continue as a going concern pending the final determination of the review or appeal, and

(b) it is appropriate in all the circumstances to approve the application.

(4) In determining whether it would be appropriate to approve the application, the officer must have regard to—

(a) the prospect of the review or appeal succeeding;

(b) any alternative steps available to, and taken by, the adviser to protect their position pending the final determination of the review or appeal;

(c) whether the adviser has acted expeditiously in accepting the offer of the review or in bringing and progressing the appeal.

(5) A notice under sub-paragraph (3) approving the application must—

(a) state the date from which it has effect, and

(b) in a case where the adviser’s registration has already been suspended, temporarily reinstate the adviser’s registration.

(6) A notice under sub-paragraph (3) may approve an application subject to any conditions or restrictions specified in the notice.

(7) The day on which the approval of an application under this paragraph (including any temporary reinstatement of the adviser’s registration) expires is—

(a) in a case where the decision to suspend the tax adviser’s registration is cancelled on a review under this Schedule, the day on which it is cancelled;

(b) in a case where the decision to suspend the tax adviser’s registration is upheld on a review under this Schedule, the last day on which an appeal could be brought against that decision (ignoring any possibility of an appeal brought out of time with permission), unless paragraph (c) applies;

(c) in a case where an appeal (other than an appeal brought out of time with permission) is brought in respect of the decision to suspend the tax adviser’s registration, the day on which the appeal is finally determined.

(8) An authorised officer of Revenue and Customs may, by notice, revoke the approval of an application under this paragraph, or vary the conditions or restrictions to which it is subject, if they are satisfied that a change in circumstances justifies doing so.

(9) HMRC may specify in a notice published by them provision about the form, manner, timing and content of applications under this paragraph.

Schedule 22 — Conduct of tax advisers

Part 1 — Amendments to Schedule 38 to FA 2012

1

Schedule 38 to FA 2012 (tax agents: dishonest conduct) is amended in accordance with this Part.

2

For the Schedule heading substitute “Tax advisers: sanctionable conduct”.

3

In paragraph 1 (overview)—

(a) in paragraph (a)—

(i) for “agent” substitute “adviser”;

(ii) for “dishonest” substitute “sanctionable”;

(b) omit paragraph (b);

(ca) Part 3A confers power on HMRC to issue conduct notices,

(d) in paragraph (d), for “dishonest” substitute “sanctionable”.

4

(1) For paragraph 2 and the italic heading before it (tax agent) substitute—

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