Alexandra Charlton sets out the implications of HMRC’s new tax adviser rules for conveyancers, and sets out the steps that should be taken to comply with the new requirements.
The reform
Legislative reform, prompted by the government’s aim to raise standards in the tax advice markets, comes into effect from 18 May 2026. The implementation of this legislation will affect conveyancers, whose interaction with HMRC in the context of SDLT falls within the broad definition of a ‘tax adviser’ under the legislation.
As a consequence, conveyancers who interact with HMRC on behalf of clients as part of the SDLT process will need to meet minimum standards and register as a tax adviser with HMRC.
HMRC published guidance on 17 February 2026 in respect of the registration requirement and processes, which emphasises that the legal entity interacting with HMRC must register – within three months of the registration date (typically 18 May 2026) – as well as certain ‘relevant individuals’ within the business. Additional guidance was published on the same date to cover registration conditions. The registration process itself is due to be addressed in further guidance, to be published ahead of the May registration date.
The government’s approach to, and justification for, this new regime focuses on grappling with inconsistencies and introducing minimum standards for compliance, improving HMRC’s ability to monitor and exclude those who don’t meet the minimum standards, and to close administrative gaps which hinder HMRC’s ability to check compliance with standards.
The reaction
The government’s original proposals, when published, were met with widespread concern and resistance, including from the ICAEW, the Law Society and the Council for Licensed Conveyancers.
Concerns raised extended to the breadth of the proposals – which it was said risked imposing significant new burdens on professionals already subject to regulation and who do not advertise themselves as tax advisers, including conveyancers submitting SDLT returns on behalf of clients, and with the proposals not serving to impact the ‘bad actors’ as intended.
The government was accordingly invited to clarify the scope of the draft legislation to confirm the intention was not to include (for instance) conveyancers. In response, however, confirmation was provided that the scope of the bill was intended to capture conveyancers, and firms would therefore need to register and meet minimum standards.
The regulation
To comply with this new regulatory requirement, conveyancing firms submitting SDLT returns on behalf of clients will therefore, within three months of the registration date (typically 18 May 2026), need to register as a tax adviser with HMRC and meet the minimum requirements. In addition, the firm’s ‘relevant individuals’ will need to personally register.
As to who falls within scope as a relevant individual, those with a significant role in making decisions about how the whole or a substantial part of the tax adviser activities of the organisation are to be managed or organised (or the actual management of those activities) fall in scope. There are minimum requirements as to the number of relevant individuals who must register within the firm, based on the firm’s size.
As to the minimum requirements, these are unsurprising, covering the adviser’s compliance with tax regimes, not having prior anti-avoidance measures or penalties, and not having any director disqualification, an IP acting for them, or an unspent conviction for a relevant offence. The adviser must also be registered with a supervisory authority for AML supervision or eligible for such registration. For firms, the registration of appropriate relevant individuals is also a condition for registration.
The risks
Those not completing the mandatory registration and/or satisfying the minimum conditions, risk suspension for up to 12 months. Where an issue is identified by HMRC, compliance notices are issued to the adviser. If a compliance notice is not withdrawn and there is a further contravention, the adviser could be liable for a penalty of £5,000 – or £10,000 if there have been four or more contraventions. A temporary or permanent ineligibility order could also be handed down.
It is important to note fines can be levied against both the organisation and a relevant individual, where a contravention is attributable to a relevant individual.
Lastly, ‘name and shame’ rules will apply where a suspension or ineligibility order exceeds 30 days.
Defences may extend to reasonable excuses, with opportunities provided to make representations as part of the penalty process.
The recommended response
For many conveyancers, the new mandatory registration regime will introduce an unwelcome additional administrative hurdle, with serious sanctions for non-compliance.
Conveyancers will need to tread carefully in conveying what the firm’s registration as a tax adviser means in practice for clients, appreciating the new regime is likely to trigger confusion and mixed messaging for consumers as to what services they can expect from conveyancers.
For some businesses, the additional burden associated with tax adviser registration may be effectively managed through restructure of its conveyancing processes, to introduce the outsourcing of SDLT-related processes. Dedicated organisations have been established and are available for businesses to partner with. For other businesses, the registration regime will be capable of being effectively implemented as part of internal processes, provided the additional administrative step of registration (and the meeting of minimum requirements) can be appropriately incorporated into existing business structures.
Firms should, in any event, review engagement letters and terms of business to make sure it is clear that the firm is not accepting greater responsibilities over the provision of tax advice as a consequence of the firm’s registration status as a tax adviser. It will also be worth emphasising this separately when the question of SDLT arises as the conveyancing transaction progresses, with clear and documented recommendations that the client consults an appropriate financial professional for appropriate and specialist advice on matters necessitating (specialist) tax advice.
About the author
Alexandra Charlton is a legal director in Clyde & Co’s Financial Lines Insurance practice group, based in Manchester. Alexandra represents and advises legal professionals as well as construction and property professionals, and their professional indemnity insurers, in relation to the defence of civil claims and regulatory matters.
One Response
As has been pointed out to me, this is not quite right (“the firm’s ‘relevant individuals will need to personally register”.) Other than for the case of sole traders, registration is at the firm level. The “relevant individuals” will have to be named on the application form (or later in the case of a firm which already has an Agent Services Account) but should not register in their own right.