Legislation included in the Finance Bill 2025-26:

• requires tax advisers interacting with HMRC to register with HMRC (agent registration);
• extends the tax agent dishonest conduct regime by lowering the threshold for sanctions to where a “person does something with the intention of bringing about a loss of tax revenue” (sanctionable conduct); 
• introduces a new strict liability criminal offence for promoting avoidance arrangements that have no reasonable prospect of success (prohibition of promotion); and
• restricts businesses from providing goods and services to promoters in breach of the prohibition on promotion.   

The Finance Bill is currently working its way through parliament and will become law when it receives Royal Assent. To learn more about the Bill, see ICAEW’s TAXguide 05/25.

ICAEW’s concerns

ICAEW believes that the legislation is drafted too widely and could increase the cost and complexity of giving tax advice, harming taxpayers and mainstream professional firms in the process. ICAEW’s Tax Faculty has raised its concerns in its responses to earlier consultations, in meetings with government ministers and HMRC, and in briefings for MPs (see further information, below).

An earlier article provides more details on the measures and on ICAEW’s concerns. 

Government’s response

Following meetings with ICAEW, the government tabled a group of amendments to the legislation providing for agent registration so that non-payment of penalties under disclosure of tax avoidance (DOTAS) and disclosure of tax avoidance schemes: VAT and other indirect taxes (DASVOIT) – rather than the imposition of such penalties – is a breach of a registration condition. 

Although ICAEW welcomes the amendment, it does not believe that it goes far enough and is disappointed that the government appears to have ruled out further changes to the legislation.

However, the Tax Faculty was encouraged by statements made by government ministers, including Dam Tomlinson MP, the Exchequer Secretary to the Treasury (XST), to the House of Commons as part of its scrutiny of the Finance Bill on 3 February 2026. ICAEW was mentioned a number of times in the debate, by government ministers and by opposition MPs. 

Agent registration

Speaking on agent registration, the XST began by acknowledging the work done by ICAEW and others, as well as the important role that agents play in the tax system, commenting that: “I have been engaging in detail with stakeholders on the changes we are making, because it is important that legitimate and good tax advisers see that the Government have confidence in them and the work they are doing” (column 223).

The XST went on to say that agent registration is “specifically about stopping harmful tax advisers who do not meet the basic minimum standards” and that it does “not give HMRC new powers to investigate whether applicants breach the standard for agents” (column 223).

Addressing HMRC’s powers to suspend an agent’s registration, the XST said that HMRC will:

• “suspend a tax adviser only after due process, including offering opportunities to comply and a chance for the adviser to explain whether there is a good reason why they are unable to do so” (column 224);
• “not use these powers for minor breaches” (column 224); and
• “always work with a tax adviser who is genuinely trying to comply, will never suspend a tax adviser when doing so would be unreasonable or disproportionate, and will always consider the nature of any potential breach and how a suspension would impact the tax adviser and their clients” (column 230).

Sanctionable conduct

The XST made similar comments when discussing sanctionable conduct, reassuring agents that “the powers will not affect advisers who act in good faith, or who take a credible view as to what the law requires of their clients, including where they use extra-statutory concessions or HMRC guidance to form that view” (column 235). 

Further, the measures “do not affect advisers who make mistakes while trying, as the vast majority do, to do the right thing” (column 235).

Prohibition on promotion

The XST’s comments were echoed by Lucy Rigby MP, Economic Secretary to the Treasury (EST), when speaking about the prohibition on promotion. The EST confirmed that the powers “are not intended to be directed against legitimate tax advisers who are operating to a high professional standard but, while acting in good faith, make genuine mistakes” and that ministers have “asked HMRC officials to work with stakeholders in developing published guidance to address the fine detail of exactly how the prohibition will work in practice” (column 204).

Next steps

ICAEW will now continue its engagement with the government in the run up to the Report Stage and with HMRC to ensure that HMRC’s guidance reflects the commitments made by the government, and to ensure the measures are implemented in such a way that minimises the risks to and burdens on agents.