Host

• Stephen Relf, Technical Manager, Tax, ICAEW

Guests

• Lindsey Wicks, Senior Tax Technical Manager, ICAEW
• Frank Haskew, Tax Director, ICAEW

Producer

• Ed Adams

Transcript

Stephen Relf: Hello, and welcome to the Tax Track, the podcast series from ICAEW, exploring the latest developments in the world of tax. Finance Act 2026 introduces a package of measures designed to drive up standards in the tax advice market, including mandatory agent registration with HMRC. In this episode, we'll explain who will need to register with HMRC, what information they'll need to provide, and when the registration process will start.

[Teaser audio] Lindsey Wicks: Tax advisors need to register if they want to interact with HMRC in relation to the tax affairs of their clients. They don't have to be giving tax advice, they just need to be assisting another person with their tax affairs.

SR: And we'll look at HMRC's powers, including the power to suspend an agent's registration and what this could mean for the agent and for their clients.

[Teaser audio] Frank Haskew: The temporary suspension provisions grant HMRC quite significant powers, which are of a regulated nature and extremely subjective.

SR: I'm Stephen Relf, a tax technical manager at ICAEW. Today I'm joined by Tax Track regulars, Lindsey Wicks and Frank Haskew. Lindsey is a senior tax technical manager in the Institute Tax Faculty, and Frank is tax director at the Institute. Welcome, Lindsey and Frank.

LW: Hi, Stephen.

FH: Hi, Stephen.

Mandating registration – 01:28

SR: Now, Frank, could you start us off, please, by putting this into context for us? Just how significant is the introduction of mandatory agent registration for tax advisors?

FH: I think it's a very significant change, and it will potentially have far-reaching implications for our members. We've been discussing this with HMRC for many years, but we first saw the draft legislation for this on the 21st of July 2025. There were a lot of things in there that we were quite concerned about. Thanks to Lindsey and members of our tax policy and reputation committee, we did manage to get quite a number of changes to it, and I think has ended up in a position which is certainly a lot better than the draft legislation, which had some potentially quite onerous provisions in it.

SR: So clearly this is a significant change. ICAEW has been successful in winning some concessions, but an awful lot of challenges still remain. Let's get into the details then. Lindsey, could you talk us through who needs to register?

LW: Yeah. So tax advisors need to register if they want to interact with HMRC in relation to the tax affairs of their clients. They don't have to be giving tax advice, they just need to be assisting another person with their tax affairs in the course of a business. It's a really broad definition, and it includes things like advising another person on tax, acting or purporting to act as an agent on behalf of another person in relation to tax, or providing assistance with any document that's likely to be relied upon by HMRC to determine a person's tax position. It's important to note that it extends beyond the UK.

SR: Now, at the start there you mentioned interacting with HMRC. What does that involve?

LW: So interacting with HMRC includes things like contacting HMRC by telephone, by post, or by email. Sending a message to HMRC, and that could be through a website or internet portal. It includes filing a tax return, a claim or a notice, or any other document with HMRC, and that doesn't have to be done electronically. And communicating with HMRC in any other way. So it's really broad. And there are examples of businesses that need to register even though they might not consider themselves to be giving tax advice, so things like conveyancers filing SDLT returns and payroll agents filing payroll returns.

SR: So I imagine some businesses would be quite surprised to find themselves in this category of people who have to register?

LW: Exactly. They don't see themselves as giving tax advice, and this is about registration of tax advisors.

SR: Are there any examples you could give of businesses that don't need to register?

LW: Yeah, there's quite a long list. So if you're only doing the following, then you won't need to register. So people like in-house tax teams providing services free of charge, so if you're helping friends and families or charities giving tax advice. Another example is if the law requires you to interact with HMRC and you get paid for it, so, insolvency practitioners won't need to register, and some pension investment firms in that category won't need to register. Another example where you won't need to register is if you're just responding to an HMRC request for information. Software providers won't need to register. And then there's a whole load around VAT and where they're acting as representatives. So if you're interacting with HMRC on customs and import VAT only, you won't need to register. There's various representative roles, so VAT representatives, Northern Ireland tax representatives, UK vaping duty representatives, and intermediaries for the Import One Stop Shop scheme. And also, if you're just representing a client in appeals to the tribunal or court, you don't need to register as a tax advisor.

SR: Okay, so some comfort there for some types of business. Now, registration does begin from the 18th of May. However, HMRC has said there'll be a phased introduction for some types of agent. So for agents that have an OSA, which is an Online Services Account, but not an ASA, which is an Agent Services Account, then registration is from the 18th of August. For third-party payroll services, it's the 18th of November, and for financial services organisations, it's the 31st of December. Now, Lindsey, I assume a phased rollout is necessary because this is such a significant change for HMRC and for agents. Is that correct?

LW: It is. It's a sensible approach, and we did raise concerns with HMRC about how systems would cope. And one key message that I'd like to emphasise is that if your firm has already got an Agent Services Account, you don't need to do anything until HMRC gets in touch with you. Now this phased approach is sensible because as each cohort has three months to register from that start date, the needs of each group can generally be managed separately by HMRC. But one thing to note is that even if you do fall within one of those groups, if you're a new advisor from the 18th of May onwards, you will need to register from the date you start working as a tax advisor.

SR: Registration, then, it's at a firm level I believe. But what happens if you have a group of entities? Do they all have to register, or can one register on behalf of the group?

LW: ICAEW's understanding is that the overall principle that HMRC is adopting is that it's the legal entity giving the tax advice which should register with HMRC.

SR: Frank, I understand there are three conditions that must be met in order to register with HMRC. Now, on the face of it, that doesn't sound too challenging, but am I right in thinking that there's more to it than that?

FH: You're exactly right, Stephen, because the first condition actually has eight sub-conditions, so it is potentially quite complicated. They're set out in Section 227 of the Finance Act 2026. But I think for most members, the key one is in fact the first one, which is that tax agents shouldn't have any overdue tax payments or outstanding tax returns. I think it's fair to say that while the PCRT, for example, Professional Conduct in relation to Taxation, does say that a member must keep their tax affairs up to date, and we know also that the agent's standards, HMRC's agent standards says similar things. This is the first time we've actually got a direct legal link between needing to keep your tax affairs up to date, both payment and actually submitting returns, and actually being able to interact with HMRC. So it is quite a major change. An outstanding tax for these purposes includes effectively all taxes payable to HMRC, plus National Insurance contributions and devolved taxes as well together with any unpaid penalties and any unpaid anti-avoidance penalties. The only exception here is if you've got an existing HMRC time to pay arrangement and it's not been broken. I'd also mention that in terms of overseas agents, these requirements are extended to include corresponding amounts payable in overseas jurisdictions. In practice, I'm not quite sure how that's going to apply. Because HMRC are looking to do checks on tax payments and returns in the background, so they will obviously have the data from a UK perspective. So it'll be interesting to see how that applies in practice.

SR: So quite an important change then, for people to be aware of. And the other two conditions, what do they involve?

FH: You need to make sure you've got your AML registration. I mean, that's currently a requirement anyway and is an area that HMRC monitor under existing rules. So you need to effectively be able to show that you've got registered with a n AML supervisory body. I think at the moment that's going to be done manually, but at some stage there may well be some automatic element to that. The third one, and we'll come onto this in a moment, if you've got a tax advisor who's got more than six officers, then they're gonna have to make sure they nominate at least five relevant individuals who are the officers for these purposes. Lindsey, I think, is going to explain that in a bit more detail.

LW: I'll start off by describing who the officers of a firm are to start with. So If it's a company, then it's the directors. If it is a body corporate managed by its members, so an LLP, then it's the members. If it's a partnership, then the officers will be the partners. And for any other form of entity, it's the equivalents, broad equivalents of those. But moving on to relevant individuals, in a firm with fewer than six officers, all of the officers will be the relevant individuals, regardless of their role in any tax work undertaken by the firm. But in addition to the officers, any individual who works for the firm and who plays a significant role in the making of decisions about the whole or a substantial part of the tax advisor activities of the firm are to be managed or organised. Or the actual managing or organising of the whole or a substantial part of those activities is a relevant individual. It's a very broad definition. We know that firms want more clarity about what 'significant role' and 'substantial part' mean. At the end of the day, no two firms are organised in the same way, and no two roles are the same. We understand that relevant individuals are those responsible for the governance, oversight, or decision-making, but it would be really helpful to have that confirmed by HMRC in guidance.

SR: Now, can I just ask, what about firms with six or more officers?

LW: If a firm has six or more officers, then the relevant individuals are primarily based on that broad definition, so it'll be those who are responsible for governance, oversight, or the decision-making of the firm. But if fewer than five officers fall within that definition, then the firm must nominate enough officers to be relevant individuals to bring the total number up to five. But the important thing to note is that regardless of the size of the firm, there's no maximum number of relevant individuals.

Modernising registration – 11:32

SR: So far we've focused on mandation, but there is a second part to this, and that's modernisation. Lindsey, could you explain what's changing?

LW: Yeah. There's gonna be a new process for agent registration as well. So it's gonna be a new digital process, and if that process runs smoothly, it might actually feel quite light touch.

SR: So what will firms need to do?

LW: Well, they'll need to confirm details about the firm, upload evidence of their anti-money laundering supervision, but other checks will run in the background. So for example, whether the tax affairs of the firm are up to date, any company house checks and checks for criminal records and things like that. The other thing that the person performing the registration task on behalf of the firm needs to do is that they've got to agree to following HMRC's standard for agents. So they need to be comfortable that they have the authority to do that on behalf of the firm. We've talked about the firm's relevant individuals. They will also need to be named as part of this process and have their contact details provided. Once that's been put into the system, then HMRC will contact those relevant individuals to go through some checking and also for those relevant individuals to confirm that they are happy to follow HMRC's standard for agents.

SR: And will this new digital process also work for overseas agents?

LW: Our understanding is that it won't initially, and we're waiting for details from HMRC about what the process will look like for overseas agents.

SR: Before we move on, could I just ask the position for existing agents that have an ASA, is anything changing there?

LW: They don't need to do anything yet. You need to wait for HMRC to get in touch with you. And as far as we understand, HMRC will get in contact with existing agents via their agent services account, but we're still waiting for details about when that will happen. But in the meantime, make sure that your contact details in the agent services account are up to date to be prepared to receive that notification from HMRC, and also get ready in terms of getting your list of relevant individuals together. Our understanding is that it will be a more light touch checking process because you are already effectively within HMRC's database. But once we have more details, we can share that.

SR: Okay. So there is an opportunity there for agents to get ahead of this a little and prepare some of the information.

LW: Yeah.

Sanctions – 13:51

SR: Well, let's move on then to HMRC's powers. Frank, could you talk us through the consequences for a firm of failing to meet the registration conditions?

FH: I can, Stephen, and this is, I think, is where the going certainly becomes harder. The starting point is two potential sanctions called suspension, and there are two types of suspension. The first one is if HMRC, an HMRC officer, is not satisfied that the registration conditions are met. And as we heard already, they'll be doing checks in the background, for instance, in terms of whether any relevant individual or the firm has got an overdue tax return or tax payments. So that would probably how that would be triggered. I think the more concerning one which wasn't in the original Finance Bill legislation but was added later, was what they're calling temporary suspension and this is for up to a period of 12 months. And the test there is that an advisor has behaved in a manner which falls below the standards that might reasonably be expected, which effectively was their attempt to import the standard for agents into this process. It goes on to say that the officer may have regard to HMRC standard for agents, but potentially could include other material. And it's fair to say that was a particularly controversial provision. We've had quite a number of discussions with HMRC about it, but I think the real problem with it is that potentially that isn't an objective standard. It's very much a subjective standard, but potentially temporary suspension for a period of up to a year could expose the firm or the individual to an existential threat.

SR: And what's the process for this, Frank?

FH: So the starting point is before the issue of a suspension notice, there'll be some initial engagement, and the advisor has got thirty days to make representations or rectify the position. Or as we saw earlier if it's in relation to overdue tax or not submitting tax returns on time, you're actually given sixty days. So that's the starting point. If the situation hasn't been resolved in that time, then HMRC can issue a suspension notice at that point. From the suspension notice, you've then got thirty days from the date of that notice before it comes into force. So that's the timescale that we're operating to here. The notice will need to specify why the registration conditions haven't been met. But once you get into that, it's starting to be quite a serious matter.

SR: This is all sounding quite worrying, Frank. Are there any safeguards? Is there a right of appeal for the agent?

LW: The process for statutory reviews by HMRC and for appealing the decisions are set out in Schedule 21 of the Finance Act. Paragraph one of that schedule sets out a list of appealable decisions, and that includes things like the refusal of an application for registration and also the suspension of registration, alongside some of the other sanctions that we'll come onto later. Now, a tax advisor can accept the offer of a review of the decision, or they can appeal the decision, but they can't do both at the same time. The offer of the review or an appeal must be made within 30 days of the date on the notice. But there are a couple of exceptions where that could be extended. For example, a review might be accepted out of time if the advisor had a reasonable excuse, and HMRC has some discretion to extend the periods for appeal and for accepting a late review.

SR: And the review can take up to another 45 days?

LW: Yeah, and this means that the suspension could effectively take effect before the review concludes, because the suspension notice or suspension comes into effect 30 days from the date on the notice. And even if you acted immediately to take up the offer of a review, given that the review can take 45 days, the suspension can take effect before the review concludes. If the officer doesn't reach a conclusion within those 45 days, the original decision's upheld, so the agent is no further forward.

FH: And you'd expect that the provisions would effectively be automatically stayed, I think. But that's not how it's working, is it, Lindsey?

LW: No, but this is a problem with the statutory review process generally. It's not unique to tax advisor registration.

SR: So what happens for the agent while the appeal is in process? Can they continue to interact with HMRC?

LW: It depends on whether they can get temporary relief, and temporary relief will defer the effect of a decision by HMRC to suspend an advisor's registration pending the outcome of a review or of an appeal. Now, if the reason for the suspension is late filing or late payment, then if the advisor applies for temporary relief, HMRC must grant temporary relief pending the outcome of the review or the appeal. But in other cases, the advisor needs to demonstrate to HMRC that the suspension of their registration means that they would be unable to continue as a going concern. And HMRC's got to consider that it's appropriate in all circumstances to approve that application. And it's worth noting that if temporary relief is granted by HMRC in cases other than late filing or late payment, then HMRC can impose conditions and restrictions as to how the advisor can interact with HMRC.

SR: And what does HMRC take into account when deciding whether to grant temporary relief?

LW: Well, the legislation sets out what HMRC must consider. The first of those considerations is the prospect of the review or appeal succeeding. The second is whether there are alternative steps available to the advisor to protect their position, and the third is whether the advisor has acted expeditiously in accepting the offer of a review or in bringing an appeal.

SR: Now, this sounds like HMRC is very involved in the decision-making. Is that correct?

LW: It is. I mean, it's a different officer making the decision, but given that the advisor is challenging HMRC's decision, HMRC's got a clear conflict of interest in making a judgment on the likelihood of success. We made this clear in our representations on the finance bill, but unfortunately, this aspect remained unchanged.

SR: So Frank, could you just quickly explain what the consequences of suspension may be for the firm, and I guess also for its clients?

FH: Certainly. And as we've just heard, once you get into these provisions, they're potentially very onerous if things start going wrong. So one of the first things that would happen under suspension is there is a requirement to notify clients and the condition to notify clients is where you've had a suspension issued to you, and after 30 days of the suspension notice, so on the 31st day of the suspension if you still have the suspension at that stage, then you have 30 days in which to notify all your clients that you've been suspended, and that's in a form which HMRC can specify. So as you can imagine you've got potentially 30 or 60 days initially, then you've got your suspension issued, and if it's 31 days after the issue of the suspension, then you're gonna have to start notifying your clients. If you've got a temporary suspension, it's effective from the day that the suspension is first issued. So again, temporary suspension is really quite a serious matter because it brings it forward effectively. What happens if you don't notify your clients? Well, you're meant to make reasonable efforts to do so, but if you don't, then potentially you're into a penalty, and the penalty is £5,000 per client. So you may be able to claim a reasonable excuse, but effectively this is a fixed penalty with no mitigation. So, if you were in that position, you need to make sure you're notifying all your clients. This is potentially really serious if you get into this. So members are really going to have to make sure, I think, that they keep on top of this, and they don't want to get involved in these sorts of problems.

SR: Yeah, certainly worth reiterating that a £ 5000 penalty per client, which as you say, is potentially very significant depending on the firm. Are there any other financial penalties agents should be aware of?

FH: Yeah, it gets worse actually because if you then carry on interacting with HMRC when you're prohibited, you can then be issued with what they call a compliance notice. Effectively, you're engaging with HMRC when you shouldn't be doing, so you're doing a prohibited transaction effectively. If you then have a further contravention, then you get further penalties in relation to how many times you've contravened, and that's again £ 5000 per contravention. That's where it starts. But that can then increase to ten thousand pounds per contravention if you undertake interactions with HMRC for the fifth time in a two-year period. And I would also just say here that a relevant individual, even if they've left a tax advisor firm, can still be on the hook.

SR: So you were correct there in saying things did get worse. Some very significant financial penalties for everyone to be aware of, agents and also the individuals. Before we move on, any other sanctions that it's worth drawing attention to?

FH: Well, there's yet another stage: the ineligibility order. So if you still are engaging with HMRC after you've had a compliance notice and you've had your two years, then potentially HMRC can issue with a temporary or permanent ineligibility order. By that stage, your business, I think, would be really on the line. I think even notifying clients with the initial suspension would be a serious problem. But if you started getting into an ineligibility order, beside the fact you can't engage with HMRC, it would be effectively very much on the public record.

SR: So then if we look back to the budget in 2025, the government said that it would not take forward plans to regulate the tax market. But from what we've discussed today, is it fair to say that agent registration is actually regulation, just under a different name?

FH: That's a very good question, Stephen. We have said for some time since we first saw these provisions back in July, that as far as we can see, they were of a quasi-regulatory nature. I think particularly, and as we've touched on, the temporary suspension provisions grant HMRC quite significant powers which are of a regulatory nature and extremely subjective in which HMRC potentially has a conflict of interest.

SR: One of the intentions here is to try and drive the bad actors out of the tax system. Lindsey, do you think it'll achieve that?

LW: This particular measure, no, because a lot of the time, the bad actors keep in the shadows. They choose not to interact with HMRC. So all of these powers of suspension or ineligibility orders, effectively are a permanent ban on interacting with HMRC, they won't affect those who choose not to.

FH: I think the danger then, of course, is that the provisions effectively apply to the tax agents who've probably made mistakes and get things wrong, but are at least generally compliant and trying to do the right thing.

SR: So in conclusion then, this could place significant burdens on agents, but not actually hit the target of driving out the bad actors. Well, that's all we have time for today. However, I'm sure we'll come back to this topic on the podcast, in webinars, or in articles as things develop. Many thanks, Lindsey and Frank, for your contributions.

LW: Thank you.

FH: Thank you.

SR: And thank you for listening. All of the topics we've discussed today are covered in more depth in the articles linked in the show notes. If you found this useful, then don't forget to subscribe so you never miss an episode. You can rate and share the podcast too. We'll be back next month with the next Tax Track. In the meantime, why not check out the sister podcast from ICAEW? Accountancy Insights provides business, finance, and accountancy analysis, while each episode of Behind the Numbers offers a deep dive into a selected topic. There's also the Students podcast aimed at young professionals. To keep up with the latest developments in tax, please make sure to subscribe to our weekly TaxWire newsletter. Tax faculty members also have access to our in-depth Tax Line articles. Thank you for listening.