The organization said that the legislation was too broad
The Law Society of England and Wales has challenged a new tax adviser law proposed by His Majesty’s Revenue & Customs, reported the Law Society Gazette.
The legislation, which was outlined in the HMRC’s policy paper “Modernising and mandating tax adviser registration with HMRC”, would require tax advisers who liaise with the agency on their clients’ behalf to register with HMRC and fulfill base standards. This is in line with the agency’s intent to enhance tax advice market standards and shield taxpayers from dealing with unqualified tax advisers who do not meet minimum standards.
The legislation would take effect on April 1, 2026, with the transition period lasting at least three months.
“As currently framed, the draft legislation is cast too widely and risks imposing significant new burdens and uncertainty on advisers. That is particularly true for sole practitioners and small firms. Most importantly, it also does not deliver better outcomes for taxpayers,” Law Society president Richard Atkinson said in a statement published by the Gazette.
He described the law as “unfair and unwieldy” and said the definitions of “tax adviser” and “interaction with HMRC” as pitched under the draft law were “so broad that many legal professionals who neither advertise themselves as tax specialists nor act as tax advisers in any meaningful sense, could be at risk of falling short of the minimum standards.”
“For example, even conveyancers filling out Stamp Duty Land Tax returns could be affected. This risks complicating and lengthening the conveyancing process. The legislation should be targeted only at agents who present the greatest compliance risk,” Atkinson said in a statement published by the Gazette.
Tax Policy Associates’ Dan Neidle, who used to be a partner at Clifford Chance, said in a statement published by the Gazette that the law burdens small advisers “without doing anything about the really bad actors.” He pointed out that those who peddle misleading tax avoidance schemes do not submit clients’ tax returns themselves and thus would not interact with the HMRC.
The Law Society suggested that the legislation be targeted to individuals who regularly act as agents for clients’ tax concerns or who present themselves as tax advisers. It added that the law should clarify the differences between firm-level and individual registration requirements.
Moreover, the territorial scope of the legislation’s provisions should be reviewed and the registration conditions changed in line with reasonable tax adviser expectations. Professionals who are under different regulatory regimes should also be excluded to prevent duplication.
