Finance Bill 2025-26 – Who This Affects

Earlier this year, we contacted our serviced firms about the Finance Bill 2025-26 and Tax Advisor Registration obligations coming into force in May 2026. In this updated, follow-up guidance, we set out how the UK government’s tax adviser registration could affect your firm.

It is especially important to pay attention to these details if your firm covers any of the following practice areas, which are likely to be the most affected by these changes:

• Conveyancing – residential and commercial
• Private client – inheritance tax, trust administration, and estate tax compliance
• Family law – where services involve capital gains tax, trust taxation, maintenance and lump sum orders
• Corporate and commercial – where queries are directed to HMRC on a client’s behalf
• Litigation – contentious tax work, including dispute resolution involving HMRC

These changes mean that by May 2026, thousands of legal practices that have never described themselves as tax advisors will need to be registered with HMRC as exactly that. Any department that submits returns or corresponds with HMRC on behalf of clients must act now to ensure they are compliant with these new obligations.

What The Updated Legislation Actually Says

Under Chapter 1 of Part 7 of the Finance Bill 2025-26, there is an updated ‘mandatory’ HMRC register for tax advisors. Once this comes into force, unregistered firms or individuals cannot interact with HMRC on behalf of clients. That includes submitting returns, responding to queries, and any other official communication on a client’s behalf.

What firms need to be acutely aware of is that the definition of “tax advisor” is based on the tasks you perform, not what you call yourself. The test is whether you interact with HMRC on a client’s behalf. If you do, you are a tax advisor under this legislation.

Registration opens on 18 May 2026. However, firms with existing self-assessment or corporation tax agent accounts have until 18 August 2026 to complete registration. Further guidance on who needs to register and by when can be found here: Gov.UK Check if and When You Need to Register as a Tax Advisor with HMRC.

The Broad Catchment Areas and Potential Implications for Your Firm

HMRC’s broad description of a ‘tax advisor’ is what brings thousands of firms into the new obligations:

“If you interact with HMRC about someone else’s tax affairs and get paid for it, we consider you to be a tax adviser. This means you’ll need to register for an agent services account.”

Effectively, this legislation reaches departments that would not traditionally consider themselves tax practices. We provide a few examples below of the departments now within this scope:

Conveyancing: Under Clause 221, the submission of an SDLT return is classified as an interaction with HMRC. That is the mechanism that brings conveyancing firms into scope. For many practices, filing an SDLT return is a largely administrative step. The firm calculates the duty due, completes the return, and submits it as part of completing a property transaction. There is often no tax planning involved, and no advice given beyond confirming the figures are correct.

Probate and Private Client Work: The same applies to firms submitting Inheritance Tax returns in probate matters, which would now be classed as interacting with HMRC under the Bill’s definition. Private client teams that handle VAT queries or deal with HMRC correspondence as part of trust administration fall into the same category.

While these are some of the most obvious examples, they are not the only categories that now fall within the new scope. If the work involves any form of official communication with HMRC on the client’s behalf, the obligation applies.

In response, the Law Society has flagged concerns with these requirements, highlighting that the conditions for registration are too broad to be meaningfully applied to those in the legal profession:

“We’ve been in an ongoing dialogue with HMRC since its consultation on modernising and mandating tax adviser registration with HMRC in September 2025.”

“Our response explained why any changes introduced should be proportionate and account for the existing framework of the Solicitors Regulation Authority (SRA).”

“Since then, we have pushed for firms regulated by the SRA to be passported onto the register, or for a carveout for firms that have incidental tax functions without providing specialist advice.”

“We’ve also highlighted the pitfalls of double regulation and of granting HMRC wide discretionary powers without adequate safeguards.”

Read the updated guidance here: https://www.lawsociety.org.uk/topics/business-management/meet-charlotte-garvey-hmrc-tax-adviser-registration

The Requirement for Relevant Individuals

Another element that may catch some firms out is that, while registration is made at firm level, the Bill requires firms to identify and vet “relevant individuals” before they can register. These are the people who play a significant role in managing or organising the firm’s HMRC-facing activities. Individuals who fall under this scope include officers of the business, including partners, directors, or senior managers with oversight responsibility. Additionally, firms will be expected to identify those individuals who perform activities that fall within the new definition.

A crucial element of the registration process is meeting the HMRC’s registration conditions. The HMRC will refuse registration if any named relevant individual has outstanding personal tax returns or unresolved tax debts. This is a personal compliance check, not a firm-level one. As an example, if a partner overseeing your conveyancing department has a late self-assessment return, that has the potential to block the firm’s registration entirely.

The same applies where an individual has an unspent conviction for fraud, money laundering, or a tax-related offence, or where the firm or an individual has been subject to an anti-avoidance penalty or a Stop Notice under the Promoters of Tax Avoidance Schemes rules in the previous twelve months. These are not remote scenarios. These are the criteria HMRC will apply when assessing whether your firm can register.

However, HMRC has promised further guidance on who qualifies as a relevant individual and how the relevant individual concept applies in larger firms.

This is not an invitation to delay registration; firms should start preparing now for the new requirements.

How AML Supervision is Linked to Registration

Another detail that could easily be overlooked is the AML supervision prerequisite for HMRC registration. Your firm must be registered with an appropriate AML supervisory body to appear on the HMRC register. For most law firms, and until the FCA takes over as the UK’s sole AML/CTF supervisor, that means the Solicitors Regulation Authority (SRA), or the Council for Licensed Conveyancers (CLC).

HMRC will now be formally linked with the legal industry regulators. An AML supervision failure does not just create a problem with the SRA or the CLC. It puts your HMRC registration at risk as well. If your AML supervision lapses for any reason between now and the registration deadline, you could find yourself unable to complete the process.

Firms should confirm their current AML supervision is up-to-date and ensure any renewal date is tracked and managed with May 2026 in mind.

Sanctions Firms Should Be Aware Of

Penalties range from £5,000 to £10,000 for interacting with HMRC while unregistered or failing to comply with a notice. Those are not trivial figures, but they are not the main concern.

The real risk is the client notification requirement. If HMRC suspends a firm’s registration for more than thirty days, the legislation requires the firm to notify all its clients in writing. For a conveyancing practice or private client department, the reputational consequences of that letter landing on a client’s desk would, in most cases, far outweigh any financial penalty. It is the kind of disclosure that damages client relationships, generates referral anxiety, and creates questions that are difficult to answer.

HMRC can also publish details of suspended firms. The combination of mandatory client notification and public naming means that a compliance failure here is not something that can be quietly resolved.

What you should be doing now

With registration opening in May 2026, the preparation window is narrower than it looks. Here is where to focus.

• Scope audit. Identify every department that submits anything to HMRC on behalf of clients. SDLT returns, IHT returns, VAT correspondence, agent authority requests. Everything counts.
• Relevant individuals. Establish who in your management structure has significant oversight of those activities. Check that every identified individual is personally tax-compliant with no outstanding returns or unpaid liabilities. Do not wait until the registration form is in front of you to discover a problem.
• Fit and proper checks. Confirm that no relevant individual is a disqualified director or subject to current insolvency proceedings. This is part of the registration criteria.
• AML status. Confirm your AML supervision is current and that you have a process in place to maintain it.
• Engagement letters. Review your standard retainer terms. Update the language to accurately describe the scope of HMRC-related work and, where appropriate, to distinguish administrative filings from substantive tax advice.
• Key dates:
  • 18 May 2026, registration opens.
  • 18 August 2026, deadline for firms with existing HMRC agent accounts.
  • Ongoing annual affirmation of compliance status required.

Compliance Obligations – How RACO Can Help

The Finance Bill creates a compliance obligation for firms that have, until now, had no direct regulatory relationship with HMRC beyond submitting their own affairs. That changes in May 2026. The new regime is not unworkable, but it does require deliberate preparation rather than a last-minute response.

The firms most likely to face problems are those that assume this does not apply to them because they do not consider themselves tax practices.

For firms that utilise our services for regulation and compliance, we will be in touch directly to offer a solution to help firms register and maintain their registrations. We will also consider whether audits need to be extended to cover tax advice and engagement, and if your risk registers need to be updated. We will also be providing further and updated information when the final guidance is published by HMRC, including any updates provided by the Law Society.

Contact Us

To ask any questions about the Regulation and Compliance Office and how we can support your Law Firm, please call us on 0203 985 8550, complete the online enquiry form, or email us at info@regulationandcomplianceoffice.co.uk