Time for action

Since 18 May 2026, all law firms and individuals interacting with HM Revenue & Customs (HMRC) on client tax matters must register with HMRC as ‘tax advisers’. This is the case even though most law firms and individuals who need to register will not act primarily in such a capacity. 

Despite some resistance from the legal profession, solicitors were included within the regime introduced by the Finance Bill 2025–26. This means that failure to register with HMRC will have potentially serious ramifications for firms offering legal services surrounding the sale and purchase of property.

Fortunately, however, firms still have a reasonable period of time in which to register, as HMRC has allowed for a three-month grace period.

Who needs to do what, how and by when?

Who?

The definition of ‘tax adviser’ in the legislation is deliberately broad, capturing any firm or individual that, as part of its business, assists others with their tax affairs. If your firm provides this service – for example, files stamp duty land tax (SDLT) returns – it needs to register. This will mean any firm providing conveyancing and property services will be affected. 

The obligation to register lies with the firm and not with each individual providing what the new legislation deems to be ‘tax advice’. However, when a firm registers, it must provide information about ‘relevant individuals’ within the firm. 

Relevant individuals are those who play a significant role in: 

• decisions concerning how the whole, or a substantial part, of the ‘tax adviser’ activities of the organisation are to be managed or organised, or 
• the actual managing or organising of the whole, or a substantial part, of these activities.

The number of relevant individuals that a firm must include in its application depends on the size of the firm. As matters stand:

• Firms with five officers (directors, partners or equivalent) or fewer are required to include each of their officers and any employee(s) meeting the relevant individual criteria.
• Firms with six or more officers are required to include all officers and employees that meet the relevant individual criteria, although if this results in fewer than five officers being identified, then further officers must be nominated (to bring the number of officers to five). 

To be eligible to register, the firm – and each of the relevant individuals – must not: 

• have any outstanding tax liabilities (which are not the subject of an agreed payment plan)
• have any outstanding tax returns
• be the subject of any anti-avoidance measures or stop notices
• be under HMRC sanctions or suspensions
• be formally insolvent.

The firm must also provide evidence that it is supervised for anti-money laundering (AML) and each relevant individual must not be disqualified from acting as a director or have any unspent convictions for fraud or tax offences. For firms regulated by the Solicitors Regulation Authority (SRA), its AML supervision will rest with the SRA (until this function moves to the Financial Conduct Authority in the future).

How?

Firms need to register with HMRC with an agent services account (ASA). If firms were liaising with HMRC without an ASA before 18 May 2026, they need to set one up to allow HMRC to link the firm to its registration system; those that already operate an ASA don’t need to re-register. However, it’s very important for both camps to ensure that their ASA details are correct and up to date.

By when?

Firms have three months from 18 May 2026 to complete their registration, during which time they can continue to interact with HMRC on behalf of their clients. Registration needs to be completed by 18 August 2026. Firms that miss this deadline will no longer be able to interact with HMRC on behalf of their clients – and could also face enforcement action. 

Implications

For firms providing conveyancing and property services, the need to register is triggered by routine activities that many practitioners view as procedural – and certainly not advisory – such as the: 

• submission of SDLT returns to HMRC
• arrangement of payment to HMRC of SDLT for clients.

This means many conveyancers who have never regarded themselves as tax advisers now need to formally classify themselves as such for the purposes of registration with HMRC. 

Scope of professional duties

Initial concerns – voiced by those who provide solicitors’ professional indemnity insurance – about whether the tax adviser label could expand the scope of a solicitor’s professional duties will hopefully come to nothing. 

While a solicitor’s duties should not be expanded by reason of the tax adviser label alone, it’s conceivable that the label will, or at least may, affect client expectations. Property buyers and sellers may assume their conveyancer will deal with any tax-related issues in the transaction. But now that conveyancers will be registered as tax advisers with HMRC, this assumption could easily grow into an expectation that they will provide proactive tax guidance. 

Thankfully, your firm can manage and minimise this risk through a clear and unambiguous retainer letter which sets out both the services that will be provided, and also those that won’t. It’s also prudent to add exclusionary wording, explaining that the status of ‘tax adviser’ has been conveyed on the firm by the regime introduced by the Finance Bill 2025–26 and excludes any duties to provide tax advice in the traditional sense. 

As indicated above, the scope of a solicitor’s duty to their client continues to be defined, primarily, by the terms of the retainer agreed between them. If a firm’s retainer includes within its scope calculating, preparing and submitting the SDLT return, along with payment, the duty to undertake these tasks – and to exercise reasonable skill and care when doing so – is already present. The need for the firm to register as a tax adviser with HMRC should not expand the scope of the solicitor’s duty.

Providing a service

However, the solicitor who contracts to file the SDLT returns and pay this liability on behalf of their client will need to ensure that they can actually provide this service. If they can’t – because they failed to register with HMRC – then they won’t be able to discharge the duties they owe to their clients.

Failing to register on time will therefore be disastrous for a firm providing conveyancing and other property services. Beyond the regulatory sanction that the firm may face, not being able to communicate with HMRC is liable to disrupt transactions in several ways. For example, a conveyancer unable to submit an SDLT return may face:

• delays obtaining the SDLT5 certificate
• delays in HM Land Registry registration
• knock-on effects across linked transactions.

In a property chain, delays of this sort can cascade through multiple transactions and cause significant issues for multiple parties. If these delays are caused by a culpable failing on the part of a firm, don’t be surprised if complaints, claims and potential referrals to the SRA soon follow.

Mortgage lenders

The consequences of delayed registration could also conceivably extend into the commercial space, as mortgage lenders are unlikely to want firms on their panels that have failed to register on time. The loss of income streams flowing from a firm’s presence on lender panels could conceivably threaten the firm’s very existence. 

The importance of timely registration can’t, therefore, be overstated.

Comment

The need for solicitors – specifically those providing conveyancing and other property services – to register as tax advisers is a significant development. Firms that fail to comply with HMRC’s requirements in time may, in the worst-case scenario, face a threat to their ongoing existence. 

While the label of tax adviser, in and of itself, should not expand the scope of a solicitor’s duties, you can manage any risk of it doing so by using a suitably worded retainer or engagement letter. A firm that’s alert to this risk and takes steps to address it is likely to be in a good place – as such awareness means it’s alive to the need to register with HMRC and will most likely have already registered or be in the process of doing so. 

In reality, the single biggest risk for firms offering conveyancing and property services is likely to arise from ignorance, or a misunderstanding, of HMRC’s requirements and their practical importance. If your firm hasn’t already taken steps to register, there is still time, but as the deadline of 18 August 2026 draws ever nearer, it’s crucial to get your firm’s application correct first time to reduce the risk of missing the deadline.