The tax advisory landscape is about to change fundamentally. Following the Autumn Budget 2024 and draft legislation published in July 2025, all tax advisers must register with HMRC, ensuring compliance with new regulations starting May 2026.6.
This represents a seismic shift from the current voluntary system to mandatory registration, backed by significant penalties for non-compliance.
Key Points for Busy Readers
- Tax advisers must register with HMRC from May 2026, with enforcement beginning after a three-month transitional period. The soft-landing window ends on 1 April 2026, after which unregistered advisers face sanctions
- Principals must have clean tax records, no unspent tax fraud convictions, and agree to HMRC standards. Insolvency or director disqualification bars registration entirely
- Penalties escalate from £5,000 per breach to £10,000 for repeat offenders, with permanent prohibition possible. Failing to notify clients during suspension costs £5,000 per client
- Registration covers any HMRC interaction, including phone calls, emails, software API submissions, and online portal access. Even chasing a PAYE code requires registration
- Individual employees don’t need to register unless they’re principals (partners, LLP members, directors), but software providers and customs-only advisers are exempt
What's Changed: Why Tax Advisers Must Register with HMRC
Until now, tax advisers have operated without a centralised registration requirement. Aside from specific categories like VAT representatives, advisers could interact with HMRC on behalf of clients without formal registration or standardised verification of their credentials.
That changes with the Finance Act 2026. The draft legislation, published on 21 July 2025 and confirmed at the Autumn Budget 2025, introduces mandatory registration for all tax advisers. The Government intends to invest £36 million to modernise the registration infrastructure, signalling this is a permanent fixture rather than a temporary compliance exercise.
The policy objective is twofold.
- First, to protect taxpayers by ensuring tax advice meets agreed standards.
- Second, to allow HMRC to focus resources on unscrupulous advisers who contribute to non-compliance.
The measure follows a 2024 consultation titled “Raising standards in the tax advice market: strengthening the regulatory framework and improving registration.“
Mandatory registration requirements take effect in 2026, with HMRC providing a three-month transitional period before full enforcement begins. Advisers should prepare now by ensuring principals have clean tax records and all eligibility criteria are met.
Who Must Register (And Who Doesn't)
The legislation defines a tax adviser broadly as anyone who, in the course of business, assists others with their tax affairs. Tax advisers must register with HMRC if they interact with the tax authority on behalf of clients, whether directly or via software submissions.
This covers giving tax advice, acting as an agent (or purporting to act as one), and providing assistance with documents that HMRC relies upon when determining tax liability. It also includes employees of organisations appointed to give advice.
Critically, the definition of “interaction with HMRC” is comprehensive. It includes:
- telephone calls (such as chasing a PAYE code),
- postal correspondence,
- emails,
- online portal access,
- electronic submissions, and
- API submissions through accounting software
Every touchpoint with HMRC counts. If your firm uses cloud accounting software that automatically files returns via API, that qualifies as interaction requiring registration.
The geographic scope is equally broad. The rules apply to all UK and overseas advisers who interact with HMRC on behalf of clients, regardless of where either the adviser or client is based. An advisor in Singapore acting for a UK client needs to register just as much as a London-based practice.
However, there are targeted exemptions.
- Individual employees working for organisations don’t need to register unless they’re principals
- Tax and accounting software providers are exempt, as are advisers dealing solely with customs duties and related import VAT or excise duties
- VAT representatives operating under VATA 1994 section 48, intra-group advisers, and those whose HMRC interaction is limited to Tribunal and court appeals also fall outside the scope
Mixed-service practices offering both registrable and exempt services must ring-fence the exempt work and be prepared to provide evidence of their entitlement to exemption. HMRC will expect clear demarcation.
Registration Requirements & Eligibility Criteria
To comply with the new rules, tax advisers must register with HMRC using an online form integrated into the existing Agent Services Account. The application must include:
- the adviser’s name and address, plus
- the names of all principals
In the legislation’s terminology, these are called “senior managers” and include LLP members, partners (or those purporting to act as such), and directors, including shadow directors.
The eligibility criteria focus heavily on principals. Each principal must meet four core requirements:
- Fit & Proper Status – Each principal must provide a tax compliance statement demonstrating their suitability to act as a tax adviser. This requires disclosure of any unspent convictions for specified tax fraud offences, which automatically bar registration. Similarly, insolvency or disqualification as a director prevents registration entirely.
- Personal Tax Compliance – Principals cannot have any unpaid tax, with the sole exception being amounts covered by a time to pay arrangement that is being met in all particulars. A principal with outstanding PAYE liabilities or a self-assessment balance sitting unpaid would fail this test immediately.
- Agreement to HMRC Standards – All principals must agree to adhere to HMRC’s standards for agents. The firm must also confirm it has anti-money laundering supervision in place, and this confirmation must be maintained on an ongoing basis.
- Additional Requirements for Overseas Advisers – Overseas advisers must upload certified translations of all relevant documents, adding an administrative layer to the registration process.
HMRC may request further information before approving registration, and there’s an ongoing duty to report any change in circumstances that affects eligibility. If a principal becomes insolvent or receives a conviction, the firm must notify HMRC promptly.
HMRC will conduct light-touch monitoring of ongoing eligibility and may require annual assurance. The authority is also empowered to share registration details with professional bodies and Anti-Money Laundering (AML) supervisors. Crucially, registration doesn’t replace existing requirements. Advisers still need a 64-8 form or digital handshake to act for clients on specific taxes.
What You Must Do Now to Prepare
The first step is determining whether registration applies to your practice. Review the exemptions carefully, particularly if you operate a mixed-service firm. If any part of your business involves tax advice or HMRC interaction beyond the exempt categories, you’ll need to register.
Once you know registration applies, follow this six-step preparation plan:
Step 1: Audit Principals’ Tax Compliance – Every partner, LLP member, director, and shadow director must have their personal tax affairs completely up to date. This means clearing any outstanding liabilities now, not waiting until registration opens. If someone needs a time to pay arrangement, get it in place and ensure it’s being met precisely as agreed.
Step 2: Check for Disqualifying Factors – Review principals for any unspent convictions, particularly for tax fraud offences. These are automatic disqualifiers. Similarly, identify any principals who are insolvent or subject to director disqualification orders.
Step 3: Verify AML Supervision – Confirm not just that supervision is in place, but that it will continue throughout your registration. If you’re supervised by HMRC itself or a professional body, ensure your records are current and accessible.
Step 4: Review HMRC Standards for Agents – These will form part of your registration commitment, so understanding what you’re agreeing to is essential.
Step 5: Gather Documentation – Start collecting required documents now, particularly if you’re an overseas adviser who needs certified translations.
Step 6: Establish Ongoing Compliance Procedures – Assign responsibility for monitoring changes in circumstances and reporting them to HMRC. This includes principal changes, tax compliance issues, and AML supervision status.
Penalties & Consequences of Non-Compliance
The sanctions regime operates on an escalating basis. Failure to comply with the new rules means tax advisers must register with HMRC to avoid escalating penalties.
If HMRC detects an adviser acting while unregistered, it will issue a compliance notice giving an opportunity to register. If the adviser completes registration, the notice is withdrawn.
Continuing to act after receiving a compliance notice triggers a £5,000 penalty. If an adviser racks up four or more breaches within two years, each subsequent breach carries a £10,000 penalty. The higher penalty also applies where someone is subject to a prohibition order or a mandatory 12-month suspension.
Principals face personal liability where HMRC considers the contravention attributable to them individually. This means partners and directors cannot hide behind the corporate veil when their firm continues practising without registration.
Suspension occurs when HMRC isn’t satisfied that the eligibility criteria are met. Before suspending, HMRC will notify the adviser and provide an opportunity to supply information, evidence, or take corrective action. Suspension takes effect from the date HMRC specifies. Where an adviser has been assessed for penalties following four or more breaches within two years, HMRC must impose a mandatory 12-month suspension.
During suspension for eligibility issues, advisers must notify every client. There are two distinct client notification timelines:
- For suspension due to unmet eligibility conditions: notify all clients within 30 days, beginning the day after the initial 30-day remediation period
- For mandatory 12-month suspensions or permanent prohibitions: notify all clients within 30 days of receiving HMRC’s notice of suspension or prohibition
Failure to notify clients attracts a £5,000 penalty per client. If your practice has 100 clients and you fail to notify them, that’s a £500,000 exposure.
Continued breaches ultimately lead to permanent prohibition. This effectively ends your ability to practice as a tax adviser, as you cannot interact with HMRC on behalf of clients.
Penalties must be assessed within 12 months of the person becoming liable, or within 12 months of HMRC becoming aware of the failure for client notification breaches. Payment is due 30 days from the assessment date, and penalties are enforced like tax debts. There is double jeopardy protection: you won’t face a penalty if you’ve already received a criminal conviction for the same action.
Appeals Process & Your Rights
When HMRC issues a penalty, it must offer an internal review. You have 30 days from the date of issue to accept the review offer. HMRC then has 45 days to conclude the review and notify you of the outcome.
If you decline the review offer, you can appeal directly to the First-tier Tribunal, but you must do so within 30 days of receiving the offer. If you accept the review and disagree with the outcome, you can appeal to the Tribunal within 30 days of receiving HMRC’s conclusion.
The Tribunal has full appellate jurisdiction over these matters, applying the same procedures used for other tax appeals.
Conclusion
In conclusion, tax advisers must register with HMRC by May 2026 to ensure compliance with the new regulations and avoid penalties. With registration opening in May 2026, practices should begin preparation immediately to ensure compliance by the deadline.
The penalties for non-compliance are substantial. Fines escalate from £5,000 to £10,000 per breach, with potential for permanent prohibition. The reputational damage from suspension or mandatory client notification requirements could be practice-ending.
Start preparing now. Review your principals’ tax compliance, verify your AML supervision, and ensure you understand the full requirements before registration opens.
