Modernising and mandating tax adviser registration with HMRC

Shoosmiths is making representations to HMRC on the draft legislation for mandatory registration of tax advisers.

The draft legislation seeks to introduce a legal requirement for tax advisers who “interact” with HMRC on behalf of clients to register with HMRC and meet minimum standards, starting from April 2026.

It is understandable that HMRC wishes to ensure that taxpayers are represented only by agents who meet certain standards - but we have some concerns. Here are my top five:

1. No registration will be required for a tax agent dealing with HMRC from the point at which an appeal to the tribunal is lodged. However, registration will be required for firms wanting to assist clients at earlier stages, for example in requesting an internal review or engaging in ADR. It is not clear why there should be such a delineation in respect of properly instructed, SRA regulated law firms, given that solicitors cannot act outside their expertise as a matter of professional conduct. However, it will stop unregistered firms from engaging constructively with HMRC at an early stage, when taxpayers may need help the most.
2. Individuals do not need to be registered if interacting with HMRC in the course of the business carried on by the organisation for which they work. In practice, this probably means that individuals working for registered firms will not themselves be registered. What does this mean for pro bono activities? 
3. There are likely to be some firms which are oblivious to this (for the moment at least). For example, conveyancing firms will no longer be able to submit SDLT returns for their clients without obtaining registration. I believe people are only just appreciating this now, even though the draft legislation was published back in July. What are the chances they will all get registered in time?
4. It is incongruous that a tax adviser operating in a purely advisory capacity need not register, whereas an adviser wishing to “interact” with HMRC must. The scope of “interaction” is wide - registration is needed for anyone wishing to submit SDLT returns, stamp duty letters for payment of stamp duty following share acquisitions, clearance applications, share option valuations, EIS/VCT advance assurances, S/EIS1 forms, non-statutory clearance requests, voluntary disclosures, responses to compliance checks and enquiries, applications for ADR and requests for review. What is the logic for this distinction?
5. One of the conditions for registration is that no “senior manager” of a firm has any outstanding tax return or payment of tax. The scope of the definition of “senior manager” is unclear and needs work. However, on a wide reading, a firm will not be eligible for registration if just one individual partner of the firm has underpaid £1 of tax, even if that partner has nothing to do with tax work. Surely this is not really required for tax advisers to meet minimum standards?

Shoosmiths supports HMRC’s aim to raise standards in tax advice, but we believe the draft legislation needs refinement to avoid unintended consequences for regulated professionals and their clients. We hope that through constructive dialogue, HMRC will consider these concerns and ensure the final framework is both proportionate and practical.