In the last edition of tax news before its summer break in August, we highlighted that on L-day in July, the Government published three technical consultations on draft legislation each of which close later this month. The Institute will be responding to these and is seeking your feedback by close of business on Friday 12 September. Email tax@charteredaccountants.ie to share your views. More details on each consultation are set out below.
Raising standards project
Under the banner of the ongoing raising standards in the tax advise market project, HMRC published two separate technical consultations with associated draft legislation. Both these consultations close on Monday 15 September. More details on each are set out below.
Modernising and mandating tax adviser registration
This consultation seeks views on the introduction of a legal requirement for tax advisers who interact with HMRC on behalf of clients to register with HMRC and meet minimum standards. This will begin from 1 April 2026, with a transitional period of at least three months (it is currently unclear exactly what this means). The legislation’s explanatory note provides a useful overview of the key elements of the registration requirement.
Clause 5 of the draft legislation sets out the three eligibility conditions which will need to be satisfied in order for an agent or firm to qualify for registration. These are as follows:
- Condition A will require the tax adviser, and each of their senior managers, to meet specific criteria. These include having no outstanding tax returns or payments due to HMRC, and not being insolvent or subject to certain sanctions, disqualifications or convictions,
- Condition B stipulates that the adviser and each of their senior managers must adhere to any specific standards set out by HMRC, and
- Condition C requires that tax advisers are registered with a supervisory authority for anti-money laundering purposes.
Clause 21(2) then defines senior manager for these purposes.
As agents will also be grappling with the first batch of taxpayers mandated to use Making Tax Digital (MTD) for income tax from 6 April 2026, clearly this will be a very challenging deadline to meet. It also remains unclear whether or not agents which already hold an agent services account with HMRC will need to register under this measure.
Enhancing HMRC’s powers and sanctions against tax adviser facilitated non-compliance
This consultation seeks views on further measures to ‘support compliance and transparency in the tax advice market’. There are two associated legislative explanatory notes which are useful:
The measures include:
- changes allowing HMRC to request information from tax advisers where there is reasonable suspicion of deliberate conduct (amended from dishonest conduct),
- penalties for tax advisers who engage in deliberate conduct (again, amended from dishonest conduct), calculated based on the tax loss, and
- a new power allowing HMRC to publish details of advisers where they have been sanctioned (at present this element appears to have very few safeguards).
MTD and penalty reform
This draft legislation aims to refine and simplify the existing MTD framework and legislates for many of the changes announced in March at the Spring Statement. This includes the following:
- A deferral from MTD until at least 2029 for some groups, including Ministers of Religion, Lloyds Underwriters, and recipients of the blind person’s allowance,
- Exemptions from MTD for others, including individuals with power of attorney, and non-UK resident entertainers with no other qualifying income,
- Technical and policy amendments, including the authority for HMRC to cancel or reset late submission penalty points and cancel associated financial penalties,
- A requirement for MTD users to submit their end of year tax return using MTD-compatible software, and
- The mandation of the £20,000 gross income threshold from 6 April 2028.
The aim of this consultation is to seek views on whether the draft legislation works as intended.
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