The scourge of unscrupulous agents has, unfortunately, been present in the UK R&D tax industry for many years now. In recent years, we’ve seen the Government try to combat this through its extensive R&D compliance check campaigns, and this may have factored into its decisions to adapt the R&D scheme as well. However, a new proposal set out by HMRC could well make a significant contribution to tackle misuse of R&D tax incentives.
 
New legislation would require tax advisers to be registered with HMRC or face financial sanctions. This would apply to the whole tax adviser industry, not just the R&D space, but could help eradicate the impact of disreputable R&D tax agents. On that basis, ABGI welcomes the proposal.
 
The plans published recently by the UK tax authority would, from 1 April 2026, prohibit any unregistered agents from engaging with HMRC on behalf of clients.
 
At present, requirements for registration vary widely by service, with R&D tax advisers being one group not currently mandated. However, in a consultation conducted last year, respondents indicated strong support for legally requiring registration of advisers across every tax service. The proposals would apply to advisers irrespective of being UK-based or not.
 
To have a registration application accepted, the tax adviser and their senior manager must not be subject to:

 
• any outstanding tax returns or unpaid tax due
• a decision by HMRC refusing to deal with them
• sanctions or other measures imposed in relation to tax anti-avoidance activities
• a suspension or suspension order
• a prohibition or permanent prohibition order
• any directorship disqualifications whether in the UK or abroad
• insolvency
• unspent financial crime-related convictions

 
Backed by £36 million in Government investment, it is anticipated that HMRC’s ability to detect and root out agents that fall below the standards expected of the profession will improve as a result.
 
Subject to the Finance Bill 2025-26 being passed, the legislation will come into force from 1 April next year in conjunction with a three-month transition period. Any unregistered agent thereafter will be issued a compliance notice resulting in a penalty of £5,000, rising up to £10,000 in the event of repeat offending. Further £10,000 penalties will be issued where advisers are continuing to provide services while suspended or not permitted to register.

If you have any further questions, please contact the ABGi Team. A representative will get back to you to discuss your unique needs and explain how we can assist.