New HMRC registration rules raise questions for in-house tax teams

New requirements for advisers to register with HMRC – other than in respect of financial services organisations – took effect from 18 May, with a transitional period of three months for the first registrations to be completed by 18 August 2026.

Under the new Finance Act rules, tax advisers face a ban on “interacting with HMRC in relation to the tax affairs of a client” unless either that adviser is registered, or specific exceptions apply.

But in-house tax teams face questions over whether they are classed as a tax adviser for these purposes and, if they do, whether they fall within the exceptions.

Under the rules, an organisation is a tax adviser if they, in the course of a business, assist other persons with their tax affairs – either by advising them in relation to tax, acting as an agent on their behalf over tax issues, or providing assistance with any document likely to be relied on by HMRC for determining tax.

Jake Landman, a tax disputes expert with Pinsent Masons, said: “It is important to note that the obligation expressly applies regardless of the location of the adviser and is focussed on interacting with HMRC. By contrast, it should be noted that it only covers HMRC, not Revenue Scotland or the Welsh Revenue Authority.”

This definition will likely encompass most in-house tax teams dealing with HMRC. However, the rules also open up exceptions that mean the adviser does not need to register. There is a broad exception for advisers interacting with HMRC in relation to a group undertaking of the adviser – which, in broad terms, would cover parent, subsidiary and other group relationships.

Interacting with HMRC in relation to areas such as customs duty or import VAT would also be classed as an exception for that activity only.

HMRC’s own high level guidance says an organisation does not need to register if it is “an employer or in-house tax team, running payroll for your own staff, or, only deal with tax affairs within your own company group.”

But Abigail McGregor, a tax disputes expert with Pinsent Masons, explained that there remains some ambiguity over how the registration obligation will apply for in-house tax teams dealing with their employees in relation to areas such as share schemes or pensions tax.

"There is some remaining uncertainty regarding the interaction that an in-house tax team might have with HMRC in relation to the tax affairs of its employees - who are not undertakings - in relation to the employee’s tax position,” she said.

“We understand that HMRC’s position, albeit unpublished, is that an employee cannot be a ‘client’. However, the legislation defines a client as simply ‘a person’ whom the company is assisting in relation to their tax affairs, which is much broader. 

“The statutory exception for payroll only refers to the provision of payroll software, not the submission of payroll RTI submissions. However, the HMRC guidance noted above expressly refers to employers running their own payroll as being excepted."

Compliance failures face generating significant consequences for firms found in breach of the new rules, including substantial fines and being banned from dealing with HMRC. However, HMRC has confirmed it is looking to take a ‘soft landing’ approach (6-page / 171KB PDF) in the early days of the new regime.