Tax advice used to be a risk for clients. Now it is a risk for the advisers. The ground has shifted: HMRC wants every tax-facing professional registered, visible and accountable, while prosecutors are finally using dormant corporate offences to target firms that fail to prevent tax evasion. Professional-services businesses can no longer assume that compliance liability stops at the client’s door. The rules are changing; and so is who gets punished.
What’s new? The proposed tax-adviser registration regime
In September 2025, the Law Society of England and Wales (Law Society) expressed formal concern that draft legislation introduced by HMRC entitled “Modernising and mandating tax adviser registration with HMRC” is too broad and risks imposing “an undue burden” on legal professionals.
Key features:
- From 1 April 2026 (with a transition period) the proposed regime would require individuals and firms who act as tax advisers, or interact with HMRC on behalf of clients, to register with HMRC and meet minimum standards.
- The Law Society warns that the definitions of “tax adviser” and “interaction with HMRC” are so broad that many lawyers who do not consider themselves tax-specialists could fall in scope. For example, conveyancers filling out Stamp Duty Land Tax returns might be caught.
- It also emphasises that many legal professionals are already regulated under the Solicitors Regulation Authority (SRA) regime, and that duplication of regulation is a real risk.
Enforcement spotlight: first corporate prosecution for “failure to prevent” tax-evasion facilitation
For years, the corporate crimes created by the Criminal Finances Act 2017 (CFA 2017), specifically the offences of failing to prevent the facilitation of UK tax evasion (section 45) and foreign tax evasion (section 46), sat largely unused. That now appears to be changing, just as the UK prepares to introduce a separate failure to prevent fraud offence under the Economic Crime and Corporate Transparency Act 2023 that came into force 1 September 2025.
In August 2025, HMRC charged Bennett Verby Ltd (an accountancy firm) under section 45 in connection with alleged fraudulent R&D tax-credit claims of over £16 million and Bounce Back Loan fraud. Six individuals (including a former director) were also charged with cheating the public revenue and money-laundering. A provisional trial date has been set for September 2027.
Legal commentary emphasises that this is the first live corporate prosecution under the CFA 2017 “failure to prevent” tax-evasion facilitation offence, and a clear warning that enforcement is ramping up ahead of wider failure-to-prevent reforms coming into force next year.
Why this injection of enforcement matters
- Firms can no longer assume the CFA 2017 offence is a “paper tiger”. This case signals HMRC is willing to push ahead.
- The burden is strict-liability: an organisation may be liable even if senior management did not know, if an “associated person” (employee, agent) facilitated tax evasion and the organisation failed to have reasonable prevention procedures.
- The case also overlaps with the upcoming Economic Crime and Corporate Transparency Act 2023 (ECCTA) offence of “failure to prevent fraud” (which came into force 1 Sept 2025) so firms facing tax-evasion risk often face a broader economic-crime compliance challenge.
Why this matters for tax-advisers, law firms and professional-services companies
The links between the registration regime and the enforcement regime create a confluence of risk. Put differently: if you are advising on tax or interacting with HMRC, you face regulatory risk (registration, oversight, standards) and potential criminal-liability risk (via facilitation offences) if your firm does not properly manage associated persons and tax-evasion facilitation risks.
Specific implications:
- Firms may need to map which parts of their service offering fall within the “tax-adviser/agent interacting with HMRC” definition—this isn’t limited to declared tax specialists.
- They must review whether their internal governance and compliance frameworks are robust enough: do they have policies, training, monitoring, due diligence, record-keeping? These are critical not only for registration, but also for having a defence to “failure to prevent” liability (i.e., “reasonable prevention procedures”).
- Smaller firms or sole practitioners face particular pressure: the Law Society warns of disproportionate burden via registration; meanwhile enforcement risk applies to all firms regardless of size if an associated person mis-behaves.
- Integration matters: compliance frameworks should not silo tax-advice risk from broader economic-crime risk (fraud, bribery, tax evasion) because regulators and prosecutors increasingly view them holistically.
What companies should be doing now
Here’s a checklist tailored for legal, accounting and wider professional-services firms offering tax-advice or with HMRC-interaction exposure:
- Scoping and gap-analysis
- Identify which parts of your firm’s client-services involve: (a) giving tax advice; or (b) acting as an agent liaising with HMRC.
- Assess whether the proposed registration regime will apply to you (or to parts of your firm).
- Review your current compliance framework against “reasonable prevention procedures” for tax-evasion facilitation (risk assessment, due-diligence, monitoring, training, escalation, record-keeping).
- Identify third-party/agent risk: anyone who acts on your behalf or in your name with HMRC/interacts with tax filings.
- Preparations for registration & regulation
- Begin to plan for registration (who will register, what data/credentials required, timeline).
- Align internal processes/documentation: client on-boarding, staff/agent competence, training records, complaints/escalation.
- Clarify boundaries: where your service excludes tax-advice (and ensure retainer/engagement documents reflect this).
- Engage with regulators (if relevant) and professional-bodies to track final rules and guidance.
- Strengthening the “failure to prevent” defence
- Update or refresh your risk-assessment of tax-evasion facilitation (UK & overseas tax risk, client-type, service type, agent/supply-chain exposure).
- Document your policies and procedures: top-level commitment (tone from the top), risk-based controls, due-diligence on clients/agents, communication/training, monitoring & review.
- Embed training programmes for staff and associated persons on tax-evasion-facilitation risk, suspicious scenarios, escalation protocols.
- Maintain audit-trail and records of compliance: internal reviews, incidents, client/agent due-diligence, training logs. These records help show your firm had “reasonable procedures”.
- Integrate with wider compliance frameworks: anti-bribery (Bribery Act 2010), fraud prevention, AML, economic-crime.
- Ongoing monitoring and update
- Track publication of the final tax-adviser registration regulations by HMRC.
- Monitor enforcement developments (e.g., the outcome of Bennett Verby, future prosecutions) — lessons from those cases will quickly shape expectations.
- Revisit your procedures periodically (at least annually, or when business model/client-base changes) to ensure they remain aligned with risk profile.
- Scenario-test: What happens if a client requests aggressive/abusive tax-structuring, or uses a third-party intermediary? Are your controls sufficient to manage that risk?
- Maintain a culture of compliance: encourage staff to escalate concerns, reward adherence, ensure ownership at senior levels.
Key take-aways
- The tax-adviser registration regime is not just future theory. Draft legislation is live and firms need to prepare now.
- Enforcement of the corporate “failure to prevent” tax-evasion-facilitation offence is no longer dormant: the Bennett Verby case signals a new phase of risk.
- For firms giving tax-advice (or interacting with HMRC) the twin pressures of regulation + liability converge, meaning operational, compliance and governance issues are critical.
- The only reliable defence (in the criminal-liability context) is having documented, proportionate, risk-based and regularly-reviewed “reasonable procedures”.
- Small/medium firms are not exempt: although the regulatory burden may feel heavier, the liability regime applies broadly if associated persons facilitate evasion under your banner.
Firms that wait for HMRC to publish final registration mechanics will already be behind. Now is the time to evidence reasonable procedures, strengthen internal controls and train every associated person who could interact with HMRC. Compliance failures in this space are no longer hypothetical: the first prosecutions are already underway. Make sure yours is not the firm that learns that lesson the hard way.
Train your staff on failure to prevent
Deploy role-specific CCO (tax evasion) and FTPF (fraud) training with assessments and attestations, then keep an auditable trail of completions, scores and policy sign-offs.
Start here
- Failure to Prevent Fraud training, including our new interactive fraud eLearning
- Failure to Prevent Tax Evasion (CCO) training
- Track risk assessments, due diligence and attestations in Omnitrack.
