Published: March 2026

Law firms – will compulsory tax advisor registration with HMRC apply to you?

Introducing tax adviser registration will give HMRC greater control over the tax adviser community as will the new sanctionable conduct rules that sit alongside them. So, if your firm provides tax services or any legal advice on tax issues and planning, it’s time to get to grips with the new rules and the risks they pose to your firm. Are you ready?

Finance (No. 2) Bill 2025-26 – changing the market

As a tax adviser of over 20 years standing, any time a Finance Bill includes specific clauses focusing on the actions of ‘tax advisers’ this obviously sets off my antennae – and the current Finance Bill has certainly caused vibrations. But it is not just accountancy firms that should be taking notice, any firm providing tax services and interacting with HMRC should be getting ready now.

Many law firms will comment on tax issues and guide clients, and whether this is on transactions, conveyancing, planning, expert opinion and plain old compliance operations, there is likely to be some interaction between the adviser and HMRC. Those interactions will face greater regulation from May onwards when a new registration system will take effect.

‘Prohibition against unregistered tax advisers interacting with HMRC’

That is the snappy title of clause 220 of the Finance Bill: at least it is fairly self-explanatory. When the law is implemented, HMRC will not only refuse to correspond with ‘tax advisers’ that are not registered, but it can also suspend and prohibit registrations as well as issuing financial penalties to suspended advisers who seek to interact with it. In many ways, this formalises its procedures to refuse to deal with some firms under CRCA 2005, but as HMRC is setting the conditions and behavioural standards to which advisers must adhere, this Bill makes it clear that HMRC will be, in effect, a regulator of tax services.

There are some exceptions to the need to register: in-house tax teams, those only representing a client against HMRC in court are exempt, as are tax software providers and advisers dealing with customs and excise duties and import VAT for clients. Those advisers that already have an agent services account with HMRC should not need to re-apply for registration – although all agents will need to meet the registration conditions, nominate their ‘responsible individuals’ and provide information in relation to HMRC’s monitoring of compliance with registration conditions. We await HMRC’s guidance on this process.

Those firms that do need to register (or maintain their registration) will need to meet a number of conditions – breaching some of these can result in HMRC denying or suspending the firm’s registration. If a firm interacts (or attempts to interact) with HMRC whilst not registered or whilst their registration is suspended, then compliance notices may be issued which may lead to the firm and “relevant individuals” at the firm being fined and named.

Registration conditions

The tax adviser registration rules seek to ensure that registered tax advisers are both transparent and compliant – an aim I heartily support. To enforce this, the rules require that firms with six or more LLP members must nominate all “relevant individuals” (“RIs”) who work for the firm and play:

“a significant role in— 
 (i) the making of decisions about how the whole or a substantial part of the tax adviser activities of the organisation are to     be managed or organised, or 
 (ii) the actual managing or organising of the whole or a substantial part of those activities,”

As yet, HMRC has yet to comment on what it regards as a ‘significant role’ and how this may vary with the size of the tax advisory business in the firm – it could encompass all tax partners and directors. If your firm has a sizeable team focused on tax, it is likely that it will be easy to identify many individuals who could qualify as RIs and, on the face of it, all of them may need to be nominated (even if they are not actually based in the UK). Different rules apply for smaller firms but the rule is that each firm that needs to register must have (or nominate) at least 5 relevant individuals.

What is 100% clear is that the RIs, and the firm itself, must not only be personally solvent and up to date with all their taxes, but they also cannot be a disqualified director, have unspent convictions, be subject to any anti-avoidance sanctions or are subject to a HMRC decision ‘to refuse to deal with them’. Furthermore, any breach of these rules in the future (or committing any one of wide range of offences from falsifying documents to ‘cheating the public revenue’ – see below) could, in theory, lead to HMRC suspending or withdrawing the firm’s registration.

What about firms with a small group of tax focused partners and staff?

Many firms will carry out small amounts of tax work as an adjunct to their legal services. So, let’s consider a 5 partner law firm where there is only one partner focusing on tax issues, helped by a director and an associate. Although there are only 3 people working on tax advice, if the firm wants to go on interacting with HMRC, it will have to nominate all of its five partners as “relevant individuals” (regardless of whether they advise on tax or not) to meet the registration conditions because each partner is an ‘officer’ of the firm under these rules. The director or associate may also need to be named as RIs if they have a ‘significant role’.

While HMRC has now published some brief guidance on the registration conditions, its description of RIs is rather simplistic compared to the legislation so should be treated with care.

Advice only clients

If all your client tax engagements are purely of an advisory nature and all normal interaction with HMRC is left to the taxpayer or another tax advisor, in theory, you will not currently need to register with HMRC. However, note that your firm will likely still meet the test of being a ‘tax advisor’ – if “in the course of a business carried on by it, assists other persons with their tax affairs” (and advice is very broadly defined).

Similarly, if you are representing a client at Tax Tribunal or higher courts against HMRC, a registration is not required to interact with HMRC on the proceedings (although it would be required to handle a tax enquiry/dispute). I suspect that some firms will choose to follow this ‘no contact’ route although, over time, the fact that a firm does not have a registration with HMRC may start to have an impact on perception of that firm with prospective clients.

Given that the registration rules exclude a distinct part of the “tax advice” market, it is perhaps no surprise that the Finance Bill also expands the sanctions for all ‘tax advisors’.

Sanctionable conduct

The Bill changes the current rules in Schedule 38 to FA 2012 about the dishonest conduct of tax agents – this will become ‘sanctionable conduct’ of tax advisers – and you don’t need to be a registered tax advisor for sanctions to apply. Sanctionable conduct is defined broadly as:

“in the course of acting as a tax adviser, the person does something [or omits to do something] with a view to bringing about a loss of tax revenue.”

This raises the interesting question of whether your internal tax teams for the firm are now “advisers” for the purpose of the sanctions in this part of the Bill? And tax counsels advising on planning arrangements will need to consider these rules carefully.

I won’t list all the sanctions that HMRC can impose but suffice to say they include personal financial penalties and the power to name and shame. Of course, for a registered tax advisor any sanctionable conduct may result in the loss of registration as they would fail the behavioural test - by behaving in a manner which falls below the standards that might reasonably be expected of a tax adviser in their interactions with HMRC. Equally, committing one of the new offences in part 6 of the Bill (prohibition of the promotion of certain tax avoidance arrangements) might well see a tax advisor’s registration cancelled.

And just to rub it in, where HMRC suspends (for more than 30 days) or withdraws a registration the tax adviser must also notify all their clients of this within 30 days.