What does taking reasonable care actually mean when I have hired an adviser?

Three things, in HMRC's own framing. Give the adviser complete information — most penalty arguments are lost here, on the invoice or the bank account nobody handed over. Act on the advice you receive rather than filing it. And check the work to the best of your own ability, which means the level a reasonable person in your position could manage, not a technical review you are not qualified to do. You are not expected to audit a specialist. You are expected to read what is put in front of you, ask about anything that looks unfamiliar, and keep a record that you did. That record is the evidence if HMRC ever asks.

How much does an adviser's error actually cost once HMRC adds everything up?

Far more than the tax. Take an illustrative importer with £2.4m of turnover that has underpaid duty by £48,000 a year for three years. The tax is £144,000. Interest runs at HMRC's late payment rate of 7.75%, which has applied since 9 January 2026 and is set at base rate plus four points — roughly £22,320 across the three years. A careless inaccuracy disclosed after HMRC starts asking attracts a penalty of 15% to 30%, so £21,600 to £43,200 more. The total lands between £187,920 and £209,520. On a 5% net margin that business earns £120,000 a year, so the bill is around eighteen months of profit.

Is suing a former accountant a realistic way to get the money back?

It is a real remedy, but it is slow, expensive and uncertain, and it never pauses the HMRC bill. You have to prove the adviser owed you a duty, breached it, and that the breach caused your loss — and the scope of that duty is set by the engagement letter you signed, which is why the wording matters so much. Recovery is then capped by whatever professional indemnity cover sits behind the firm. Corporate structures move on, too: in the Brompton claim one of the three defendants, Woodward Trade Consulting, was dissolved in June 2025. Litigation is the fallback. It is not the protection.

What should I look for in my engagement letter before something goes wrong?

Scope first: list what your adviser is engaged to do and, just as importantly, what they are not. Most disputes start in that gap — the specialist area nobody was actually retained to look at. Then check who signs off and reviews the work, what your own obligations are for supplying records and by when, any cap on the firm's liability, and whether the firm holds professional indemnity cover and to what limit. You are entitled to ask for that limit. Buzz publishes its own regulatory detail rather than waiting to be asked. If your current letter is years old and the business has changed shape since, it is out of date.

When your adviser gets it wrong, who actually pays?

Q: If my accountant makes the mistake, can HMRC still charge me a penalty?

Yes. The tax liability is yours, and so is the penalty risk. HMRC's compliance handbook is blunt about it: a person cannot simply appoint an agent and deny responsibility for their tax affairs. Its factsheet on inaccuracies makes the same point — if you ask an adviser or an employee to do something on your behalf, you have to do everything you reasonably can to prevent inaccuracies. Get that right and a penalty should not arise even though the return was wrong. Say instead that you left it all to your accountant and you have described the thing HMRC treats as a failure to take reasonable care. Recovering from the adviser afterwards is a separate matter, in a separate forum, on a much slower clock.

Reacting to: Brompton Bicycle sues former adviser for 'professional negligence' (City A.M.) →

Brompton Bicycle, the London folding bike manufacturer, has issued a professional negligence claim against its former accounting and tax advisers. City A.M. reports the defendants are AAB Business & Tax Advisory LLP, AAB Customs and Woodward Trade Consulting, that Brompton is represented by the City firm HFW, and that the claim has been filed in the Commercial Court — a venue that generally expects claims to be worth over £3m. AAB stopped acting for Brompton in January 2024. The specifics of the allegation are not yet public.

Two things before any comment. These are allegations. They have not been tested, no defence has been reported, and nothing below should be read as a finding against anyone. And the point of writing about it is not the gossip. It is that most owners reading a story like this quietly think at least there's a backstop if my accountant drops the ball — and that is the wrong lesson to take from it.

Here is the one that matters. A negligence claim is what you do after you have already paid. It does not sit between you and HMRC, it does not delay a penalty, and it does not pause interest. If your adviser gets your tax wrong, HMRC bills you, on its own timetable, years before a court gets anywhere near the question of whose fault it was.

You cannot outsource the liability

This is settled and it is written down in plain English, but it surprises people every time.

HMRC's compliance handbook puts it at CH84540: "A person cannot simply appoint an agent and deny responsibility for their tax affairs." The public factsheet on penalties for inaccuracies says the same thing to taxpayers directly — if you ask someone else, an employee or an adviser, to act on your behalf, you must do everything you reasonably can to prevent inaccuracies, and if you do not, HMRC may charge you a penalty.

Read that the right way round and it is not a threat, it is a defence. Taking reasonable care is the thing that stops a penalty arising even when the return turns out to be wrong. HMRC's own description of what that looks like is unglamorous: give the adviser complete information, act on the advice, and check their work to the best of your ability. What fails is the sentence "I leave it all to my accountant."

So there are two separate questions after an error, and they run on different clocks. Does HMRC get its money, with interest and possibly a penalty? Almost always, and soon. Do you get any of it back from the adviser? Maybe, in a few years, if the engagement letter covers it and there is cover behind the firm.

What an error actually costs — the arithmetic nobody publishes

Brompton's claim is in a court that expects £3m-plus, which is not most readers' world. So here is the same shape of problem at the size Buzz clients actually run at. This is an illustration built from published rates, not a client, and it is deliberately not a guess at what happened at Brompton.

Take a manufacturer turning over £2.4m that imports components. A commodity code is applied wrongly, and duty is understated by £48,000 a year. HMRC opens a check three years later and unwinds it.

Underpaid duty across three years: £144,000
Interest at HMRC's late payment rate of 7.75% — in force since 9 January 2026, and set at base rate plus four points, with the base rate held at 3.75% on 30 July 2026. Year one's £48,000 has been outstanding three years, year two's for two, year three's for one, so simple interest runs on six amount-years: £22,320
Penalty for a careless inaccuracy, disclosed only once HMRC came asking, at 15% to 30% of the tax: £21,600 to £43,200
Total: £187,920 to £209,520

Now put that next to the business. On a 5% net margin, £2.4m of turnover earns £120,000 a year. The bill is roughly eighteen to twenty-one months of profit, payable now, out of a company that has already spent the money it never knew it owed.

And notice what the behaviour label does. Careless, prompted, costs 15% to 30%. Had the same error been found by the business and disclosed before HMRC asked, the range starts at 0%. That single distinction is worth up to £43,200 here, and it is entirely within the owner's control — it is decided by who spots it first.

Why the lawsuit is the fallback, not the protection

Suing works, sometimes. But look at what it demands. You have to show the adviser owed you a duty, that they breached it, and that the breach caused your loss. The duty is defined by the engagement letter you signed, which is exactly why the scope paragraph nobody reads is the paragraph the whole case turns on. Disputes cluster in the gap between what you assumed your accountant was watching and what they were actually retained to do.

Then there is who is left to pay. Recovery is bounded by the professional indemnity cover behind the firm, and cover limits are finite — every firm has one. Structures also move on while a dispute matures: in this claim, City A.M. notes that one of the three defendants, Woodward Trade Consulting, was dissolved in June 2025. AAB stopped acting in January 2024 and the claim is being filed now. That gap is normal, and it is the whole problem — HMRC does not wait in it.

What is still unknown, and when we will know it

Almost all of it. The particulars of claim are not public, so what is actually alleged, over what period, and to what value are unknown. No defence has been reported. Commercial Court claims of this size commonly take a year or more to reach any public airing, and most settle privately without one — so the realistic outcome is that we never learn the detail. Treat the headline as a prompt to check your own arrangements, not as a verdict about anyone's competence.

Two things to do this week

Re-read your engagement letter, specifically the scope. Not the fees — the list of what your adviser is engaged to do, and the sentence saying what they are not. If you have added imports, staff, property, a second company or an overseas customer since it was signed, the letter describes a business you no longer run. Ask your accountant to confirm in writing who is watching the areas that are missing. Ten minutes, and it is the single highest-value thing in this article. While you are there, ask what professional indemnity limit the firm carries. You are entitled to ask, and a firm that is straight with you will tell you — ours is set out on our regulatory information page.

Build one review point where you actually look. Reasonable care is evidenced, not asserted. Before anything is filed, spend twenty minutes on it and write down that you did: does the turnover match what you think you sold, are there entries you cannot explain, did anything unusual this year — an asset sale, a grant, a new supply route — get treated at all? You are not doing a technical review. You are creating the record that says you did not leave it all to somebody else.

That is the honest position. There is no arrangement that removes your responsibility for your own tax, and any adviser promising otherwise is selling something. What good advice does is make errors less likely and catch them while disclosure is still unprompted and the penalty range still starts at zero. That is the real work behind tax planning and management accounts — a second set of eyes on the numbers often enough that problems surface in months rather than in a Commercial Court filing two years after the relationship ended.

If you are not confident anyone is currently looking, that is worth a conversation. Our accountancy packages set out who checks what, and if you are weighing a change we have written up how switching accountants actually works.