Drawing on the third paper to be published as part of ICAEW’s work on how to build a better tax system, Ed Saltmarsh explains how the tax advice market could be improved, to the benefit of agents, taxpayers and HMRC.
Previously, ICAEW identified five critical pillars to building a better tax system, looked at what is wrong with UK tax policymaking and how to reform it, and explained why HMRC must change to succeed. In the third paper, summarised below, we focus on the tax profession and how the tax advice market could be improved.
A tax system is only as good as the infrastructure that supports it. Even the most carefully designed tax code, administered by the most capable revenue authority, cannot function if taxpayers cannot access competent and trustworthy advice. The tax profession is not peripheral to the system, it is at the core of it. This creates a clear public interest in how the profession is structured and supervised.
Yet the framework for qualification requirements, standards, regulatory oversight and consumer protection has grown up piecemeal. HMRC estimates that only around 65% of UK tax agents are members of a professional body, leaving a substantial minority operating outside enforceable ethical and disciplinary frameworks. Getting this right is a precondition for the reforms set out in the other pillars: a simpler code means little if taxpayers cannot find advice to navigate it, and a better-resourced HMRC achieves less if poor advice undermines compliance. The challenge is to raise standards without increasing the cost of obtaining tax advice.
Uneven and disproportionate accountability
The UK tax profession is the backbone of voluntary compliance. The overwhelming majority of practitioners work to high standards, supported by professional body membership requirements covering continuing professional development, ethical conduct and disciplinary oversight, and guided by codes such as Professional Conduct in Relation to Taxation (PCRT). The problem is not the profession as a whole; it is that tax-specific accountability does not reach consistently across the market and, where it does apply, is not always proportionate or well designed.
Tax-specific accountability sits on a spectrum
At one end are advisers operating within professional frameworks that impose tax-specific requirements relating to competence, continuing professional development, ethical conduct and disciplinary oversight. Further along the spectrum are advisers who are professionally regulated, but not specifically for tax. They may be subject to general professional and ethical requirements without equivalent requirements for tax-specific competence, continuing professional development or conduct. Their clients therefore have some general professional protections, but not the same assurance that tax-specific competence standards have been met.
At the other end are advisers who design and sell tax planning but never interact with HMRC. They may remain outside the tax adviser registration requirement introduced by Finance Act 2026 and, if unaffiliated, outside any professional or disciplinary framework. HMRC has separate powers targeting promoters of avoidance arrangements once a specific scheme is identified, but these are discrete enforcement tools rather than a system of ongoing oversight.
These latter groups result in a similar gap in taxpayer protection, but the cause and the appropriate response are different. One is a question of bringing advisers with no regulatory home within a recognised framework; the other is about extending the tax-specific standards and recognition through structures that already exist.
Differences between professional routes can also have wider practical consequences. For example, legal professional privilege applies in some circumstances to advice given by professional legal advisers, but not to advice given by professional accountants or tax advisers. Future reforms therefore need to recognise legitimate differences between professional frameworks and avoid unintended consequences for taxpayer rights and access to advice.
Accountability is not always proportionate
The Finance Act 2026 replaced the “dishonest conduct” regime with a new concept of “sanctionable conduct”. HMRC guidance indicates that credible interpretations of the law, reliance on published guidance, and genuine errors should not be sanctionable conduct. However, professional bodies are concerned that these safeguards appear in guidance rather than legislation. Further, penalties are linked to the potential loss of tax revenue rather than to the fees charged. This risks making complex work disproportionately costly to advise on and discouraging advisers from operating in areas where expertise is most needed.
These problems pull in opposite directions. Parts of the market are subject to significant oversight while other parts of the market are under-supervised. Responsible practitioners face mounting compliance burdens, while those causing genuine harm may operate beyond the reach of continuing oversight. The result is higher costs for compliant firms, gaps in consumer protection and competitive distortions that disadvantage those operating to the highest standards, increasing the cost of advice for taxpayers wanting to pay the right amount of tax.
Factors to consider
The problems identified above are being compounded by rapid technological and market change, including the increased use of artificial intelligence tools. A durable framework must anticipate these shifts. If the regulatory perimeter is drawn narrowly around today’s delivery models, tomorrow’s risks will simply relocate beyond it. The framework needs to be technology-neutral and flexible enough to evolve as the market evolves. The UK should learn from jurisdictions that have raised standards while keeping the market accessible, rather than importing models designed for different market structures and regulatory cultures.
Every proposed reform should be judged against one question: does it improve outcomes for taxpayers without making competent advice unaffordable? Raising standards matters only if individuals and businesses can still reach the advice they need. The challenge is to address poor practice where it exists while preserving the high-quality advice the majority of the profession already provides.
The solution: a framework for a professional market
ICAEW proposes a framework built on three complementary elements, each designed to reinforce the others. The starting point should be to build on the existing infrastructure of professional bodies, rather than create new structures from scratch. The emphasis throughout is on targeted, proportionate supervision and oversight that extends effective safeguards to the unaffiliated minority, rather than imposing additional burdens on a compliant majority who already meet robust standards.
The three elements of the framework
- Professionalise the market by protecting the public and closing the coverage gap. The titles “tax adviser” and “tax accountant”, and their cognates, should be reserved for those who meet specified standards. Professional bodies wishing to oversee tax advisers should meet clearly defined recognition criteria, ensuring a consistent minimum level of taxpayer protection while allowing bodies to retain their own governance and qualification structures. This would provide a route for currently unaffiliated advisers to enter a recognised framework and enable tax-specific standards to operate through appropriate existing professional structures. Bodies should not be required to lower existing entry standards to accommodate unaffiliated practitioners; the purpose is to raise the floor, not to dilute what already protects the public. This should be accompanied by a public awareness campaign to help taxpayers know what they are buying.
- Make registration comprehensive and transparent, while ensuring that monitoring and intervention are risk-based. The new mandatory registration requirement is a significant step, and the single digital registration system HMRC has introduced to replace the previous patchwork of agent service registrations is welcome. But because the obligation turns on interaction with HMRC, the framework should be kept under review to ensure it covers material risks in the wider market. As software and AI increasingly perform functions that look like advice, the framework should include powers to bring such tools within scope where they cross from passive assistance into active advice.
- Proportionate accountability as a backstop to professional standards, not as the starting point for reform. Advisers who act dishonestly, intentionally facilitate non-compliance, or deliberately seek to bring about a loss of tax revenue should face appropriate sanctions designed to change behaviour. Equally, good-faith differences of legal interpretation and reasonable professional judgement should never be treated as misconduct. The heaviest sanctions, including criminal penalties, should be reserved for objectively defined, marketed avoidance schemes and the promoters who design them, not for advisers helping clients navigate genuine uncertainty.
These three elements are complementary, and their value lies in being implemented together. Each addresses a weakness the others leave exposed: protecting the titles tax adviser and tax accountant closes gaps in professional accountability, but means little without effective registration and oversight; registration identifies those interacting with HMRC, but cannot itself raise standards or provide protection across the wider market; and proportionate accountability deters misconduct only if the first two establish who is accountable and to what standard. Pull any one out and the others weaken.
Wider benefits
A well-supervised, accessible profession amplifies the benefits of reform elsewhere. When HMRC's digital services improve, advisers can use them to serve more clients better. When policymaking becomes more stable and coherent, the profession can invest in training, guidance and tools with confidence that the rules will hold. And when standards are clear and consistently applied, taxpayers and HMRC alike benefit from better compliance and fewer disputes.
The UK's tax profession is a genuine national asset, and the export of high-quality advice supports inward investment. The task is not to restrict competition but to ensure it happens on quality, transparency and ethical service, with the public able to distinguish advisers operating within a recognised professional framework from those outside it.
Further guidance
- For further information on the issues explored in this article, see ICAEW’s paper Pillar 3: a proportionate approach to ensuring quality tax advice. The paper is part of ICAEW’s work on how to build a better tax system.
Ed Saltmarsh, Tax Technical Manager – VAT and Customs Duties
Have your say
This is an ongoing project and we want members to help shape it. We welcome you to share your views via our surveys:
How to build a better tax system
