Get ready for a game-changer! The HMRC has just dropped some major news that will impact tax advisers and businesses alike. It's time to talk about the new registration rules and the potential consequences.
The HMRC has released an updated guide, shedding light on the necessity of registering as a tax adviser and the criteria individuals and firms must meet. From May 18th onwards, any business interacting with the HMRC regarding someone else's tax affairs and receiving payment for it must register for an agent services account. This includes all forms of communication, from phone calls to emails and even messaging through official government channels.
Here's where it gets controversial: even if you don't consider yourself a tax adviser or describe your work as such, you still need to register. It's a blanket rule that applies to everyone, regardless of their self-perception.
For smaller firms with five or fewer employees, each person must register as a 'relevant individual', even if they don't directly provide tax services. In larger firms with six or more employees, all 'relevant individuals' must be registered, including officers involved in tax adviser activities and anyone playing a significant role in tax-related management or organization.
If a firm has fewer than five people carrying out these activities, they must nominate additional individuals to reach a total of five registered members.
Now, here's an interesting point: while firms registering for agent services accounts must provide evidence of anti-money laundering supervision, individuals are not required to do so.
However, businesses with outstanding tax returns or unpaid taxes (unless covered by a payment plan) will not be eligible for registration. It's a strict policy aimed at ensuring compliance.
Sean Swimby, director at SCA Tax, emphasizes the importance of these rules, stating, "This is about maintaining professional standards and oversight when dealing with tax." But not everyone is on board with this approach.
Legal regulators have criticized the guidance, with Simon Law, chair of the Society of Licensed Conveyancers, expressing concerns about the operational burdens it places on firms. The Society has consistently raised issues with mandatory adviser registration, arguing that it may impose disproportionate administrative obligations on compliant legal practices without clear benefits to consumers.
Sheila Kumar, chief executive of the Council for Licensed Conveyancers, shares similar sentiments, disappointed that HMRC hasn't excluded conveyancers who aren't permitted to give tax advice but still make SDLT submissions and payments on behalf of clients. She warns that this step could lead to regulatory oversight duplication and allow bad actors to present themselves as registered tax advisers without proper authorization.
Lidia Quinlan, director at Compass, a specialist tax adviser, highlights that the registration requirement emphasizes a crucial point: taking advice on an SDLT calculation doesn't transfer responsibility. The firm remains accountable for the tax position, and true protection arises only when the submission is outsourced to a third-party tax adviser.
George Bould, head of new business at SDLT Check, agrees, suggesting that while the rule shouldn't cause alarm, it's a good opportunity to review existing processes. It's about ensuring clarity on tax advice within the firm and having proper oversight.
And this is the part most people miss: the HMRC guidance provides clarity on some procedural points, but many fundamental issues still require further clarification, especially regarding evidential requirements, the scope of 'relevant individuals', and how HMRC will apply expected conduct standards.
With the registration requirement being introduced in stages from 2026, there's an urgent need for greater certainty to allow firms to prepare without disrupting client services.
So, what do you think? Are these rules necessary to maintain professional standards, or do they impose unnecessary burdens? Let's discuss in the comments and share our thoughts on this controversial topic!
