From 1 April 2026, a significant regulatory shift will take effect that will fundamentally alter the operating environment for tax advisers, including lawyers and overseas agents providing tax services within the UK.
Coupled with his are stronger powers or HMRC to crackdown on those promoting or facilitating tax avoidance.
Under new legislation introduced through the Draft Finance Bill 2025, HMRC will require all tax agents – defined broadly as any individual or organisation offering tax advice or compliance services and interacting with HMRC on behalf of clients – to register formally.
This change represents a marked expansion of HMRC’s oversight of the tax advisory market, with far-reaching implications for accountancy and law firms alike.
Agent Mandatory registration
The agent regulation regime will include a three-month transition period and will apply to all advisers who deal with HMRC in any capacity, other than those providing payroll-only services.
Registration will be required at the organisational level – for companies, partnerships, LLPs, or equivalent structures – and details of the registration process will be published by HMRC in due course via a public notice.
Importantly, it remains unclear whether existing agent authorisations will transfer to this new regime, meaning firms should anticipate re-registration requirements and plan accordingly.
To qualify for registration, firms must meet a stringent set of eligibility conditions.
- Senior managers – a term yet to be precisely defined – must have no outstanding tax liabilities or returns, unless under an agreed Time to Pay arrangement.
- Furthermore, the organisation must either be AML-supervised or be actively seeking AML supervision at the time of registration.
- HMRC will also require firms and their senior personnel to meet minimum technical and professional standards, although the criteria have not yet been fully disclosed.
These obligations will apply equally to law firms offering tax advice and to overseas advisers who engage with HMRC. Given this broad scope, international legal and tax professionals with UK clients should monitor these developments closely to ensure compliance within the transition period.
Failure to register will carry severe penalties. Advisers who attempt to interact with HMRC without registration face fines ranging from £5,000 to £10,000, with senior managers personally liable in certain cases.
Persistent non-compliance may result in suspension from the register for up to a year or even permanent disqualification from acting as a tax adviser. HMRC will also have the power to monitor ongoing compliance, including the right to request updated information and the requirement for advisers to self-report any material changes to eligibility. Clients must be notified if their adviser becomes suspended or prohibited.
To ensure transparency and fairness, advisers will have a right of appeal against HMRC decisions – such as refusal of registration or imposition of penalties – and in some instances, may receive temporary reinstatement while an appeal is pending, particularly where business continuity would otherwise be compromised.
Accountancy and law firms should act now to prepare for these changes. A review of internal tax compliance is essential, ensuring all filings and liabilities are current.
Senior managers should also confirm their own compliance status and organisations should address any gaps in AML supervision.
While the specific mechanics of registration are yet to be confirmed, gathering the necessary information – including proof of compliance, senior personnel details, and technical qualifications – will help ensure a smooth application process once registration opens.
Tackling avoidance and non-compliance
These reforms coincide with a broader government initiative to clamp down on tax avoidance and to increase scrutiny on those who enable or promote aggressive tax planning schemes.
New measures will introduce criminal sanctions for promoters who fail to disclose arrangements under the Disclosure of Tax Avoidance Schemes (“DOTAS”) or the indirect tax equivalent, Disclosure of Avoidance Schemes in VAT and other Indirect Taxes (“DASVOIT”) regimes. Civil penalties can now be issued directly by HMRC without Tribunal approval.
Perhaps most notably, the legislation proposes the introduction of Universal Stop Notices (“USN”s), which will apply universally to promoters and enablers of tax avoidance. Breaches of a USN can result in naming and shaming, financial penalties, and criminal prosecution.
Additionally, Promoter Action Notices (“PAN”s) may compel third parties – including law and accountancy firms – to cease providing services to those suspected of promoting avoidance schemes. Non-compliance with a PAN could lead to reputational damage and regulatory consequences, including notification to relevant professional bodies.
The legislation also proposes a suite of investigatory tools to support enforcement. Connected Parties Information Notices (“CPIN”s) will allow HMRC to compel disclosure from those with suspected links to avoidance schemes. Promoter Financial Information Notices (“PFIN”s), subject to Tribunal approval, will enable HMRC to access banking and financial data held by institutions about promoters or related parties.
Of particular concern to the legal profession is HMRC’s proposal to widen its publication powers. Where legal professionals are found to have facilitated avoidance, HMRC may now publish identifying details under specific circumstances. This represents a direct reputational threat to firms and individuals involved, even tangentially, in scheme facilitation.
Further measures in the Draft Finance Bill 2025 also enhance HMRC’s powers to tackle tax advisers who assist non-compliance. These include new powers to issue file access notices without requiring Tribunal approval (now needing only internal sign-off from a senior HMRC officer), expand penalty regimes for inaccurate or incomplete responses, and publish information about advisers subject to sanctions.
For the professions, this cumulative tightening of regulation and enforcement reflects a clear direction of travel: HMRC expects higher standards, greater transparency, and stronger governance from those involved in the tax system. The days of informal, unregulated tax advisory relationships with clients are drawing to a close.
It remains to be seen whether HMRC will be compelled to apply the same rigor to its own staff in terms of the high technical standards, transparency and governance!
Accountancy and law firms must act proactively, both to protect clients and to safeguard their own reputations and standing with regulators. In practical terms, this means investing in compliance systems, reviewing advisory practices for potential exposure to anti-avoidance rules, and preparing for a more regulated future. Above all, advisers must recognise that the nature of their interaction with HMRC is changing – and that readiness for registration is not simply an administrative task, but a strategic imperative.
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