Is compulsory tax agent registration a new shield for contractors?

From April 2026, there is a new requirement for tax advisers to be registered with HMRC.

Here, exclusively for ContractorUK, I will explore what this new HMRC-registration requirement means for contractors buying tax advisory or compliance services as a personal service company, writes Meredith McCammond, technical tax officer at LITRG.

Compulsory tax agent registration cometh

The tax advice market is currently unregulated.

While most advisers adhere to certain standards, particularly if they are members of a professional body signed up to Professional Conduct in Relation to Taxation (PCRT), sadly there are some incompetent agents.

Even more sadly, there are even some rogue tax agents out there too.

However from April 2026 onwards, as a first step towards raising standards in the tax advice market, HMRC has announced that all advisers who interact with HMRC on behalf of a client (such as a limited company director), will have to register with HMRC. 

Criteria, checks, consultation

The tax authority also wants to introduce additional registration criteria or apply checks to all tax practitioners who register. 

HMRC say they will consult further with stakeholders ahead of “Budget 2025” (TBC).

Aren’t contractors’ tax advisers already HMRC-registered?

At present, most advisers in the contractor market will already be registered with HMRC by virtue of needing access to HMRC online services or an agent services account. These services allow the adviser to access taxpayer data and make Self-Assessment, Corporation Tax, PAYE, and VAT returns, and other submissions on behalf of contractors.

Some advisers who interact with HMRC may only do so by phone and paper and so may not need to be registered currently.

(N.B. Income tax/PAYE repayment agents are the exception. Given the severe issues in the refund market, agents who wish to receive tax refunds on behalf of their clients must be registered with HMRC.)

Three quick-wins of mandatory tax agent registration

The position of some tax agents not being registered means there are gaps in HMRC’s knowledge of tax advisers and their behaviour, with inevitable risks for taxpayers. It’s in these spaces that mandatory registration of tax agents could allow HMRC to:

-        strengthen its understanding of the tax adviser population,

-        deter unscrupulous actors, and

-        protect contractors and other taxpayers.

What are the limitations of compulsory tax adviser registration?

The proposals for agent registration from April 2026 will only apply to advisers who interact with HMRC – it will not apply to all tax advisers.

For example, those who simply work behind the scenes in an advisory capacity won’t be required to register.

There is also the problem that some unscrupulous tax agents can hide their activity by engaging with HMRC using their clients’ government gateway credentials. This is prohibited by HMRC, but is perhaps difficult to identify and police (though HMRC can pick up on this in some cases).

Currently, even where advisers are registered with HMRC, checks by HMRC are minimal and may only comprise compliance with Anti-Money Laundering (AML) supervision, and whether the person’s tax affairs are up to date (as required by HMRC’s baseline standards for agents).

No fit and proper test for accountancy providers under AML regs

While tax advisers may need to undertake other checks to get AML supervision in the first place, contractors need to be aware that there are no “fit and proper tests” for accountancy providers under the AML regulations.

Numerous other types of checks could therefore usefully be incorporated into the new registration process.

Six additional checks that registration could bolt-on

1. criminal records checks;
2. reviewing company websites;
3. reviewing professional indemnity insurance (PII) checks;
4. understanding reasons for previous business closures;
5. confirming professional body affiliation, and;
6. confirming compliance history.

However, at the time of writing, it remains to be seen which checks HMRC will take forward, and whether they will be applied across the board or based on risk.

Choosing a tax adviser as a limited company

A professional adviser can be invaluable for a contractor running a Personal Service Company.

From advising on the best legal structure to ‘go’ contracting and helping you navigate a limited company’s many compliance requirements, to providing strategic advice and/or ongoing support as your contracting business and the regulatory landscape evolve, there’s no substitute for a good accountant and/or tax and accounting adviser.

With compulsory tax adviser registration on the horizon, what do contractors need to do?  

Six need-to-knows for directors ahead of April 2026's tax adviser registration requirement

1. Understand that currently, only around 65% of tax agents are members of professional bodies. Furthermore, not all tax agents are registered with/checked by HMRC – even on a superficial level – particularly if they provide services via a non-digital route.
2. Check the credentials of your current adviser – there are some useful tips here on .gov.
3. In the run-up to April 2026, look out for red flags, such as agents ceasing to interact with HMRC to circumvent registration requirements.
4. Don’t be fooled by agents using compliance with HMRC’s current registration requirements as evidence of official endorsement of their services. Remember, HMRC does not approve agents or in any way endorse the quality of their work.
5. Be prepared for a potentially reduced tax advice market given that the April 2026 mandatory registration requirement may mean some advisers exit the market. The proposals may also act as a barrier to entry. 
6. Regardless of what HMRC may do here going forward, a good way of protecting yourself is to use a member of a professional body, such as the CIOT or ICAEW. They should work to high ethical and professional standards, and if they do not work to these standards, you can make a complaint to the professional body.