HMRC's Tax Adviser Registration Regime – Delay For Financial Services Businesses

The Government intends to introduce a new requirement for tax advisers who interact with HMRC on behalf of clients to register with HMRC and meet minimum standards.

Many corporate groups will not have closely monitored this measure, assuming it targets only professional tax advisory service providers. The policy paper published alongside the draft legislation in July 2025 underlines this, stating that the measure is aimed at tax advisers "who provide professional tax advice and services" in the market. The explanatory note accompanying the legislation explicitly confirms that in-house tax teams advising their own business are among a limited number of exceptions to the registration requirement. And in fairness, the legislation attempts to deliver this outcome through a group-undertaking exception designed to exclude in-house tax teams. However, for non-standard corporate arrangements - particularly those common in the private capital industry, joint venture structures, or privately owned founder-led groups - this exception is not broad enough.

In some good news, the Government has issued a statement through UK Private Capital confirming that "the registration of businesses in the financial services sector will be deferred until 31 March 2027 to allow time to get this right."

We understand that this additional time will be used to refine the legislation so that it applies only in the circumstances originally intended. In the meantime, HMRC is considering how to define "financial services business" for the purposes of the commencement rules.

This leaves some uncertainty as to which businesses will fall within scope of the deferral. It is not yet clear what definition HMRC will adopt, though we understand it is seeking a broad definition that encompasses a variety of financial institutions, and may focus on regulated entities as a starting point. The OECD considered a similar exclusion for regulated financial services entities in its Pillar One work.

As matters stand, we can take comfort from the level of engagement HMRC has had with UK Private Capital, which suggests that private capital investment managers will be able to take advantage of this deferral and, hopefully in time, secure a permanent exclusion from the regime.

The full statement from HMRC states the below points.

• HMRC is taking action to raise standards in the tax advice market, to support economic growth and close the tax gap.
• From 18 May 2026, tax adviser businesses who interact with HMRC on behalf of clients will be legally required to register with HMRC and meet minimum standards before doing so.
• These new registration requirements will help taxpayers get more reliable advice, create a fairer market for taxpayers and support advisers who play by the rules.
• Organisations which interact with HMRC on behalf of clients' tax affairs will remain in scope of the registration requirement in due course.
• However, HMRC has heard clearly from the financial services sector and their representatives that the legislation as drafted risks bringing some activities into scope as an unintended consequence, and that certain requirements may present operational difficulties.
• HMRC will continue to work closely with the financial services sector via representative bodies to ensure that the legislation is applied only where intended, including through legislative change where needed, and that the requirements are proportionate and workable.
• Ministers have agreed that the registration of businesses in the financial services sector will be deferred until 31 March 2027 to allow time to get this right.