HMRC to mandate tax advisor registration and minimum standards

HM Revenue & Customs (HMRC) plan to raise the standards of the tax advisory market by introducing proposed legislation which will compel tax advisors to meet minimum standards and also register with them whenever they need to interact with HMRC when acting for a client. The proposed requirements are expected to come into play from 1 April 2026 but with a 3-month transition period.

These new proposals have been set out in the policy paper called ‘Modernising and Mandating Tax Advisor Registration with HMRC’ which was published on 21 July 2025, with the aim for the draft legislation to be inserted into the draft Finance Bill 2026. These proposals have been put forward following earlier consultations on introducing mandatory registration of tax advisors and tackling tax advisor non-compliance.

Some have welcomed the proposed changes as they see it as an active step in preventing rogue tax advisors, which has been a hot topic for some time. On the other hand, alarm bells have started to ring for others as, not long ago, the Law Society criticised the proposals for placing an undue burden on professions but with no real benefit to tax payers.

Proposals

A tax advisor will have a legal requirement to register with HMRC before communicating with them in relation to the affairs of a client or on behalf of a client. There will be some exceptions such as, advisors who are already working for HMRC. Moreover, the advisor along with their senior managers will also need to meet minimum standards.

One of the key questions which advisors will want to know is what exactly are the conditions which need to be met to be able to register? So far, the criteria set out requires a declaration that the advisor meets the standards expected of a tax advisor but which will be published in due course. They must not be subject to any outstanding tax repayments or be insolvent. They must also not have any unspent convictions or be subject to a decision by HMRC not to deal with them. 

The advisor must also be registered with, or be in the process of registering, with a supervisory authority for anti-money laundering purposes. Furthermore, advisors who are based overseas or who have a connection abroad maybe subject to additional requirements.

The advisor will also have an ongoing duty to meet the eligibility criteria and therefore should there be any change of circumstances they will be obliged to notify HMRC.

To register, the advisor must submit the required information in a format specified in an HMRC notice. This will set out the details of the advisor(s) and their senior managers of the organisation. They will also need to provide a statement to confirm that they are able to meet the eligibility criteria.

What will happen if an advisor fails to register or report any change in circumstances? In the event that this happens then this leaves the advisor at risk of receiving a financial penalty. At present figures are £5,000 or £10,000 if the advisor or their senior managers fail to register after receiving a compliance notice from HMRC. They will also have the discretion to suspend or prohibit the advisor’s registration.