Tax advisers to be required to register with HMRC

Details, including draft legislation, have been published as part of UK tax’s L-day (21 July 2025) setting out in more detail the plans for tax advisers to become registered with HM Revenue and Customs (HMRC) as part of the UK government’s drive to raise standards in the tax advice market.

The policy paper  and draft legislation which have been published follows on from a consultation carried out in 2024 which explored options to raise standards in the tax advice market. Consultation respondents were strongly in favour of the proposal to mandate the registration of tax advisers who wish to interact with HMRC on behalf of their clients.

The proposals, which will be brought forward within the Finance Bill 2025-26, will introduce a legal requirement for tax advisers who interact with HMRC on behalf of their clients to register with HMRC and meet minimum standards. The changes are expected to improve HMRC’s ability to monitor and exclude tax advisers who are objectively unable to meet HMRC’s Standards for Agents or cannot lawfully act as a tax adviser.

The registration will be mandated from 1 April 2026, with a minimum transition period of 3 months, and HMRC is investing £36 million to modernise existing registration services to make the registration process smoother.

Who will require to register?

A tax adviser is defined as a person who, in the course of business, assists others with their tax affairs. Assisting others with their tax affairs is if they give tax advice, act as an agent in tax matters, or assist with documents used by HMRC to determine tax positions.

The drafting of the provision makes it clear that activities which are caught apply irrespective of whether the work is undertaken by a tax adviser who works for an organisation or is appointed indirectly.

Tax advisers will be required to register with HMRC before interacting with HMRC on behalf of clients. Interacting with HMRC includes contacting them by phone, post, email, or online communication or filing returns or other documents with HMRC.

The requirement to register applies regardless of whether the tax adviser or client is based in the UK or outside the UK.

Registration isn’t required in specific cases, such as:

• Individuals working within an organisation.
• Software providers.
• Tax advisers who interact with HMRC in relation to customs duties or import VAT matters.
• VAT representatives.
• Tax advisers who are interacting with HMRC as part of a group undertaking.
• Tax advisers who are interacting with HMRC in relation to appeals to courts or tribunals.

Application and eligibility

While the detailed application process and information that will be required to be provided is still to be defined, applications for registration will be required to include the name and address of the tax adviser, the name of each senior manager of the tax adviser, confirmation of eligibility and any other information or evidence that may be required by HMRC.

To be eligible for registration the tax adviser and each senior manager must meet certain conditions. These include: 

• No outstanding tax returns or tax payments. A time to pay arrangement which is being adhered to is not counted towards outstanding tax payments.
• Not be subject to a sanction or other measure imposed by HMRC in relation to tax anti-avoidance activities or be subject to a decision by HMRC to refuse to deal with them. 
• Not be subject to a suspension or prohibition from registration under the legislation.
• Does not have any unspent convictions for certain tax related offences.
• Not be disqualified as a director in the UK or other jurisdiction.
• Not be insolvent (subject to any procedure where an Insolvency Practitioner is acting).
• They meet any standards expected of tax advisers (which will be set and published by HMRC).
• Is registered with an anti-money laundering supervisory authority (tax adviser requirement only).

Senior managers are defined as directors and shadow directors (or similar) of body corporates who aren’t managed by its members, a member who exercises a management function or purports to exercise such a function of a LLP or other body corporate managed by its members, a shadow member of a LLP or a partner, or person purporting to act as a partner, in a partnership.

Ongoing monitoring, compliance and registration

HMRC will be able to request information to monitor compliance. Tax advisers will be under an obligation to notify HMRC of changes affecting the eligibility conditions.

HMRC can suspend or prohibit registration for non-compliance or where they believe the eligibility conditions are no longer met. Suspensions can be temporary or extended. Prohibitions can be permanent.

Where a tax adviser hasn’t registered, HMRC would issue a Compliance notice. Failure to register after the issuance of a Compliance notice would result in a penalty of £5,000 rising to £10,000 for repeat breaches. Penalties of £10,000 would apply where tax advisers are acting when subject to a suspension or prohibition from registration.

Where HMRC believe that the contravention is attributable to the action or inaction of a senior manager of the tax adviser then the penalties would be raised against those individuals who will be personally liable.

Tax advisers can appeal HMRC decisions to a tribunal but only after a Review. Temporary reinstatement of registration is possible during appeals.

Client notification of sanction

Tax advisers will also be required to inform clients of any suspension of registration of more than 30 days. The notification must be made to clients within 60 days of the suspension commencing. Failure to notify clients will result in liability for a penalty of £5,000.

Information sharing

Provision is also being made to allow HMRC to share information acquired or held in connection with the purpose of tax adviser registration with regulatory or supervisory bodies.

Next steps

In the short term there is little action that tax advisers require to undertake. The requirements will not be effective until the Finance Bill 2025-26 is passed by Parliament. While it is unlikely that the measures won’t get enacted there is the possibility that some of the detail may change as the legislation makes it ways through the parliamentary process.

At this stage we don’t know the detail of how HMRC intend to carry out the registration process, but we’ll be engaging with HMRC to understand this in more detail. We’ll be particularly keen to ensure that the registration process is as streamlined and efficient as possible given many tax advisors will already be engaged and registered with HMRC as agents.

Tax advisers should however make sure that they and their senior managers keep their tax affairs up-to-date to ensure they don’t fall foul of the eligibility requirements when they kick in. Any tax advisers or senior managers who is subject to an insolvency process (including an Individual Voluntary Arrangement or Protected Trust Deed, bankruptcy, Company Voluntary Arrangements or Administration) and who are expected to be in the process after 1 April 2026 will require to consider the implications of them not being eligible for registration and the impact on their business.