From May 2026, UK tax professionals will need HMRC registration before they can handle client interactions with the tax authority, following new government measures designed to elevate industry standards.
The mandatory registration system, which will be introduced through the Finance Bill 2025-26, represents a significant shift in how HMRC regulates tax professionals. The government is investing £36 million to modernise existing registration services and create a single digital registration route.
KEY TAKEAWAYS
- Registration becomes mandatory from May 2026 for all tax advisers interacting with HMRC on behalf of clients, with a three-month transition period starting 1 April 2026
- Firms must meet eligibility conditions, including up-to-date tax affairs, AML supervision, and no relevant sanctions or convictions, with senior managers also subject to checks
- Non-compliance penalties start at £5,000, rising to £10,000 for repeat breaches, with senior managers personally liable for firm violations
- HMRC estimates approximately 85,000 tax agent businesses in the UK will be affected by the new requirements
Who Must Register
The requirements cover business entities providing professional tax services in any of three capacities: offering tax guidance, representing clients before HMRC, or preparing documentation that determines tax liabilities.
Advisers must be registered before any client-related contact with HMRC, whether through digital channels, telephone, postal correspondence, or return submissions. The requirement applies regardless of whether the tax adviser or client is based in the UK or overseas.
However, several categories are exempt from registration.
Exemptions apply to: in-house tax staff managing only their employer’s affairs; software vendors with purely technical data exchange relationships; professionals dealing exclusively with customs and import VAT; VAT representatives; and advisers handling group tax matters or tribunal proceedings.
Eligibility Conditions
To obtain and maintain registration, tax advisers must satisfy multiple conditions.
- They must have no outstanding tax returns or tax payments, though time to pay arrangements being adhered to are acceptable
- Tax advisers cannot be subject to sanctions or measures imposed by HMRC relating to tax anti-avoidance activities or be subject to decisions by HMRC to refuse dealings with them
Additional requirements include having no unspent convictions for tax-related offences, not being disqualified as a director in the UK or any other jurisdiction, and not being subject to insolvency procedures where an insolvency practitioner is acting. Tax advisers must also meet standards set by HMRC and maintain registration with an anti-money laundering supervisory authority.
Critically, these conditions apply not only to the firm but also to senior managers. HMRC defines senior managers as directors and shadow directors of body corporates, members exercising management functions in limited liability partnerships, shadow members of LLPs, and partners or those purporting to act as partners in partnerships.
HMRC has clarified that while firms must register as legal entities, checks will be applied to relevant individuals with genuine control over tax advice given by the firm. Most employees will not be subject to these checks.
Enforcement & Penalties
HMRC will have powers to monitor compliance and request information from registered tax advisers. Advisers must notify HMRC of any changes affecting their eligibility conditions.
The department can suspend or prohibit registration for non-compliance or where eligibility conditions are no longer met. Suspensions can be temporary or extended, while prohibitions can be permanent.
For unregistered tax advisers, HMRC will issue a compliance notice. Failure to register following this notice will result in a penalty of £5,000, rising to £10,000 for repeat breaches within a two-year period. Penalties of £10,000 will also apply where tax advisers act whilst subject to suspension or prohibition.
Where HMRC believes a contravention is attributable to the action or inaction of a senior manager, penalties will be raised against those individuals who will be personally liable.
Tax advisers must also inform clients of any suspension lasting more than 30 days. This notification must be made within 60 days of the suspension commencing, with failure to notify attracting a £5,000 penalty.
Advisers can appeal HMRC decisions to a tribunal, but only after a review. Temporary reinstatement of registration is possible during appeals.
Additional Resources
- Everything You Need to Know About Mandatory HMRC Registration for Tax Advisers: Tax Advisers Must Register with HMRC: Deadlines & Penalties
- Potential £2 Billion Tax Shake-Up for Accountants: £2 Billion Tax Shake-Up for Accountants in Autumn Budget | FigsFlow
- FCA will Soon Become the Sole AML Supervisor. What Does This Mean for You?: FCA Takes Over AML Supervision: What This Means for Accountants | FigsFlow
- Latest Changes in UK AML Rules Every Accountant Must Know: The Latest UK AML Rules Explained: Are You at Risk?
- ICAEW & CIPFA Mergers Near Completion, What Does This Mean For You?: ICAEW-CIPFA Merger: How It Could Reshape UK Accounting
Conclusion
The mandatory registration system represents a fundamental shift in how HMRC regulates tax professionals, with strong industry support from the 2024 consultation.
Tax advisers and senior managers should ensure full tax compliance ahead of the April 2026 deadline. Those in insolvency proceedings must assess whether they will remain ineligible beyond 1 April 2026.
HMRC has yet to publish detailed application procedures and documentation requirements. The new information sharing powers with regulatory bodies will strengthen oversight of tax advisory standards across the professional services sector.
