SDLT and the ‘tax adviser’ label: practical implications for lawyers

In a move that was the subject of (unsuccessful) opposition from the Law Society and the Council for Licensed Conveyancers, solicitors were included within HMRC’s mandatory registration regime. Any firms interacting  with HMRC will now need to register with HMRC as ‘tax advisers’ and be required to meet ‘minimum standards’ (which include being supervised from AML purposes), pursuant to the Finance Bill 2025-26.

Coming into force in May 2026, with at least a three-month transition period, these changes have prompted concern within the legal profession:

• Conceptually, as many solicitors who are ‘caught’ by the new provisions would not regard themselves as providing tax advisory services in any conventional sense.
• Practically, as the consequences of any failure to register in a timely fashion could include delays in transactions, complaints, claims and regulatory censure.

Proposed changes

Under the coming regime, firms that submit tax returns to HMRC on behalf of clients will be required to register with HMRC as “tax advisers”. This will include conveyancers who:

• Calculate SDLT
• File SDLT returns
• Arrange payment of SDLT on behalf of clients

The simple submission of an SDLT return, as part of a conveyancing transaction, is sufficient to bring a firm within scope - even if no tax advice is being provided. This adds a further procedural layer to what has historically been viewed as a routine step within a property transaction and one which can be carried out by a solicitor for a client by reason simply of that client’s authority. Now, solicitors will need the authority of both the client and HMRC (via registration) to take those steps.

Solicitors providing conveyancing services will be the most affected by these changes along with those who provide private client and probate. However, the changes will impact a wide range of solicitors’ firms, from the smallest to the largest.

To this end, solicitors providing the following services will almost certainly be subject to the same requirements:

• Family work involving CGT, trust taxation, maintenance and lump sums.
• Trust administration and trust tax compliance.
• Corporate and commercial transactions with tax filings.
• Litigation and dispute resolution involving HMRC (so contentious tax work).
• Cross-border and international private client work (to the extent it requires communication with HMRC).

This list is not exhaustive – any solicitor who communicates with HMRC will be subject to registration requirements.

Impact

Duty of care

Concerns have been raised within the profession about whether the ‘tax adviser’ label may, in and of itself, alter or expand the scope of a solicitor’s duty of care. Will the solicitor’s classification as a ‘tax adviser’, for example, give rise to wider duties concerning a client’s tax affairs?

In short, we do not think so. Taking conveyancing as an example, where the calculation and submission of SDLT already falls within the scope of the retainer, the solicitor is already under a duty to exercise reasonable skill and care in carrying out those tasks. That duty exists irrespective of how the activity is described for regulatory purposes. If, however, the solicitor has excluded the calculation of the SDLT from the scope of its retainer, perhaps because another professional has undertaken that calculation, the label should not render that exclusion ineffective.

On that basis, the label should not expand the scope of a conveyancer’s duties, nor should it render the conveyancer responsible for the provision of wider tax advice.

However, the solicitor who contracts to perform the services of the filing of SDLT returns and payment of that liability on behalf of their client will need to ensure that they can actually provide that service. If they cannot, due a failure to register, solicitors will be exposed to service level complaints at the very least.

Client perception and expectation creep

A more subtle risk lies in client perception. Home buyers and sellers are often unsophisticated clients who, seeing their conveyancer described as a ‘tax adviser’, might develop expectations for proactive advice and services that go beyond the confines of the conveyancer’s understanding of the scope of the retainer. Whilst these expectations may not give rise to meritorious claims, one can foresee these (disappointed) expectations giving rise to complaints. 

For all firms, regardless of size or the sophistication of their clients, it would be advisable to include wording within the retainer letters, as appropriate, which:

1. Explains that to perform the relevant services, the firm is required to have registered with HMRC and be treated by HMRC as a ‘tax adviser’.
2. Explains the meaning of ‘tax adviser’ for the purposes of the mandatory registration regime and why the firm has that status.
3. Explain what the firm will do on  questions of tax (which, for conveyancers, will often be limited to the calculation of SDLT, the submission of the SDLT return to HMRC and the payment of the SDLT at the point of completion).
4. Explain what the firm will not do, namely provide any other form of tax advice or service beyond the above (assuming that the firm wishes to keep its retainer within the confines set out above).

With unsophisticated clients, education and expectation management at the outset of the retainer will be important to reduce the risk of a firm’s new status as ‘tax adviser’ giving rise to unexpected complaints and claims.

Failure to register

In the short term, it is imperative that firms have their ducks in a row and undertake registration timeously. Failure to do so may leave firms simply unable to do the work that they have contracted with their clients to do. This is not something which can sensibly be left to fee earners or treated as a minor administrative point. Any firm which interacts with HMRC on behalf of clients needs to understand how and via whom that interaction arises and have a plan for timely registration.

Going back to conveyancing, let us assume that a solicitor fails to register with HMRC. The firm may find that it is unable to submit its client’s SDLT return. In these circumstances, the firm would face  risks arising from:

• An inability to secure the necessary SDLT5 certificate or UTRN
• Delays in the necessary registration with the Land Registry
• Knock-on effects for consequential or linked transaction

If a firm cannot deliver an agreed service because of a preventable compliance failure, it is then exposed to complaints and negligence claims as well as potential interest from, and censure by, the SRA.

As such, insurers and brokers may therefore wish to issue bulletins to their insured firms, well in advance of May 2026, seeking confirmation that:

• The firms have assessed the extent to which they are required to register with HMRC.
• To the extent that they are, appropriate and timely steps are being taken to undertake the necessary registrations.

This proactive approach is likely to pay dividends for both insurers and their insured firms.

Comment

The need for solicitors to register as ‘tax advisers’ is, on one level, a significant development. Appropriate wording within a solicitor’s retainer letter should mitigate against the ‘label’ acting to expand the scope of their duties. The more pressing issue and risk will arise from any failure to undertake timely steps to register with HMRC.

As ever in professional negligence risk management, the answer lies in clarity - clarity of retainer, clarity of communication, and, perhaps of most practice importance here, clarity of internal process and regulatory requirements.