‘No indication’ tax adviser status to be deferred

There is ‘no indication’ HM Revenue and Customs will defer the requirement for conveyancers to register as tax advisers, following a meeting with the tax authority last week.

In a blog reporting on HMRC’s views expressed in the meeting, published on the Bold Legal Group forum and shared widely on social media, John Shallcross, a member of the SDLT Working Together Stakeholder Group and a solicitor at Blake Morgan, said:

“If a conveyancer pays SDLT to HMRC (as is usually required if there is a lender) that counts as interacting with HMRC. The consequence is that the firm would be required to register as a tax adviser, even if everything else to do with SDLT is outsourced.”

Shallcross said HMRC committed to providing further guidance on who is a ‘relevant individual’ during the meeting. According to HMRC guidance provided in February, businesses which interact with HMRC about someone else’s tax affairs in the course of their business must register for an agent services account from 18 May, with very limited exceptions.

‘Interaction’ is classed as dealing with HMRC via phone, post or email, messaging through the GOV.UK website or HMRC app, sending returns, claims or other documents or communicating with HRMC “in any other way”.

“You’ll need to register even if you do not view yourself as a tax adviser, or describe your work as tax advice,” the guidance states.

In firms with five or fewer officers, each person’s name must be given as part of the registration with HMRC as a relevant individual, even if they don’t manage tax services. In firms of six or more, all relevant individuals must be registered, including all officers involved in managing tax adviser activities and anyone else who plays ‘a significant role’ in managing or organising activities related to tax advice.

“HMRC promised guidance on who is a ‘relevant individual’; they said the rules are not aiming at middle managers, but rather those few who are responsible and have authority within the firm,” Shallcross said.

“They are looking to interpret the rules in a reasonable and proportionate way. They promised more guidance on this coming soon and they recognise the concerns.”

He added:

“HMRC confirmed the registration will be at the firm level, not the individual level, even for consultant led firms; also that the register of tax advisers will not be published.”

An 18 minute video showing the online process of applying for an Agent Service Account (ASA) has been produced by HMRC and will be released shortly. Named relevant individuals will be sent a link to separately verify their identity and enter their own details. Evidence of who supervises the firm for anti money laundering purposes will have to be uploaded, said Shallcross.

HMRC said the land transaction return form will soon include a field in which the firm filing the return would add its ASA number. This will be voluntary initially but become compulsory in due course, so only firms with an ASA will be able to submit returns.

Firms who already have an ASA will not need to register again, but will be dealt with in phase two. HMRC said it will approach firms by April 2027 to ask for details of their relevant individuals and who supervises them for AML.

In the meeting, Shallcross said there was a discussion about HMRC obtaining a list from the Council for Licensed Conveyancers of those who they supervise for AML so that this checking could be done automatically rather than requiring evidence to be uploaded.

The concern was put to HMRC that a minor problem with the tax compliance of a relevant individual could result in suspension of a firm from registration. Reassurance was given that HMRC would communicate and allow time, and that “temporary relief“ would be available, Shallcross said.