HMRC Regulatory Update: From May 2026, conveyancers filing SDLT returns must register as tax advisers.
HMRC Regulatory Update: From May 2026, conveyancers filing SDLT returns must register as tax advisers.
You're Now a Tax Adviser in HMRC's Eyes. Here's What That Means.
You didn't train as a tax adviser. You don't market yourself as one. You're a conveyancer who happens to file SDLT returns as part of completing property transactions.
HMRC doesn't care. From May 2026, filing SDLT returns makes you a tax adviser by legal definition — with all the registration requirements, compliance obligations, and liability exposure that entails.
In February 2026 the Finance Bill Committee confirmed this explicitly: the exchequer secretary named conveyancers who interact with HMRC for SDLT as among those required to register. The Society of Licensed Conveyancers has raised serious concerns and urged the government to reconsider. Read more (Today's Conveyancer)
The Fundamental Shift
Before May 2026
SDLT filing was an incidental part of conveyancing. You calculated the tax, filed the return, moved on to the next file. If something went wrong, you had PI insurance.
Your liability was framed as professional negligence — did you exercise reasonable skill and care? The threshold for sanctions required proving dishonesty.
After May 2026
SDLT filing makes you a registered tax adviser subject to:
- •Registration requirements — must meet eligibility conditions before you can file
- •Ongoing compliance monitoring — HMRC can investigate and sanction
- •Enhanced penalties — "sanctionable conduct" threshold much lower than dishonesty
- •Personal liability — senior managers personally accountable for firm violations
- •Publication risk — HMRC can publish names of sanctioned advisers
The stakes just changed. The game hasn't.
What "Sanctionable Conduct" Really Means
This is the change that should concern you most.
The Old Regime
HMRC could penalise tax advisers for "dishonest conduct." This required proving actual dishonesty — a high threshold that rarely caught good-faith errors.
The New Regime
HMRC can penalise for "sanctionable conduct" — defined as acting "with the intention of bringing about a loss of tax revenue."
What Counts as "Intention"?
The legislation doesn't require malicious intent. The ICAEW has warned this could apply to:
- ⚠️Legitimate differences in legal interpretation
- ⚠️Technical disputes over complex legislation
- ⚠️Cases where HMRC and advisers both act in good faith but disagree
- ⚠️Taking a position that later proves unfavourable
In SDLT Terms:
Consider the mixed-use property calculation. Is that property with a small garage used occasionally for business purposes "mixed-use" (lower rates) or "residential" (higher rates)? There's genuine ambiguity in the legislation.
Under the old regime: Getting this wrong was a professional negligence matter — addressable through PI insurance.
Under the new regime: If HMRC determines your interpretation was wrong and caused "a loss of tax revenue," that's potentially sanctionable conduct. Penalties of up to 100% of lost revenue. File access powers. Potential publication of your name.
The same uncertain calculation. Dramatically different consequences.
The Eligibility Conditions: Your Personal Compliance Matters
To register as a tax adviser, you must meet three conditions. Not just your firm — you personally, and every senior manager.
Condition A: Tax Compliance
You must have:
- ✓ No outstanding tax returns (personal or business)
- ✓ No unpaid tax amounts
- ✓ No insolvency proceedings (IVA, bankruptcy, administration)
- ✓ No unspent tax fraud convictions
- ✓ No relevant sanctions or disqualifications
The catch: This applies to every senior manager in your firm. One partner with a late self-assessment? Your firm may be barred from registration.
Condition B: Professional Standards
You must: Meet HMRC's "Standards for Agents"; maintain compliance on an ongoing basis; accept HMRC's monitoring and oversight.
The catch: These standards aren't fully defined yet. HMRC has significant discretion. The CIOT warns this gives HMRC "unfettered powers" — effectively regulation by the back door.
Condition C: AML Registration
You must be registered with a supervisory authority for anti-money laundering purposes.
The catch: You likely already meet this through the SRA. But verification adds administrative burden.
The Practice-Size Problem
This legislation hits different practice types differently.
Solo Practitioners
The challenge: You are the firm. Your personal tax compliance is the firm's eligibility. Your SDLT calculations carry significant risk for the practice.
The new reality:
- • You must personally register with HMRC
- • You carry full "sanctionable conduct" liability
- • No second professional to share the risk
- • Your PI excess comes from personal funds
Small Firms (2–5 Partners)
The challenge: Every partner's personal compliance determines firm eligibility. Collective liability for individual errors.
The new reality:
- • All senior managers must meet eligibility conditions
- • One partner's issue becomes everyone's problem
- • Partnership dynamics around SDLT verification become even more fraught
- • PI premium implications for the entire firm
Mid-Sized Firms (6–20 Fee Earners)
The challenge: Scale creates complexity. More senior managers = more eligibility checkpoints. More SDLT calculations = more exposure.
The new reality:
- • Compliance verification across multiple partners
- • Higher volume means higher cumulative risk
- • COLP/COFA responsibilities expand significantly
- • Standardisation of SDLT processes becomes critical
Large Firms (20+ Fee Earners)
The challenge: Enterprise risk management. Panel membership. Regulatory scrutiny.
The new reality:
- • Board-level oversight of SDLT advisory registration
- • Enhanced due diligence on partner eligibility
- • Risk that SDLT non-compliance affects broader practice areas
- • Potential need for separate tax advisory registration vs. general practice
Your Options
You have three realistic paths from here.
Option 1: Register and Self-File
What it means:
- • You (and/or your firm) register with HMRC as a tax adviser
- • You continue filing SDLT returns directly
- • You carry full liability under the new regime
Who this suits:
- • Large firms with dedicated tax expertise
- • Practices willing to invest in enhanced compliance
Requirements:
- • Meet all eligibility conditions (all senior managers)
- • Maintain ongoing compliance with HMRC standards
- • Accept enhanced penalty exposure
- • Document every calculation to defensible standard
Cost: Time, administrative burden, liability exposure, potential PI premium increase
Option 2: Refer SDLT to Specialists
What it means:
- • You refer all SDLT matters to specialist tax advisers
- • Clients engage separate professionals for SDLT
- • You handle conveyancing only
Consequences:
- • Additional cost to clients (£500–£1,500 per transaction)
- • Longer transaction times
- • Loss of clients to full-service competitors
Cost: Competitive disadvantage, reduced service offering, client attrition
Option 3: Outsource Your SDLT Process
What it means:
- • A specialist provider collects SDLT information, calculates accurately, populates the SDLT1 and submits on behalf of clients with their tax code
- • You maintain the client relationship; they handle the SDLT process and HMRC interaction on the return
- • Whether you still need to register as a tax adviser is not yet definitive
Who this suits:
- • Practices wanting to meet greater scrutiny and compliance
- • Solo practitioners and small firms without dedicated tax resource
Benefits:
- ✓ Continue offering SDLT as part of conveyancing service
- ✓ Outsource collection, calculation, SDLT1 and submission to a specialist
- ✓ Meet greater scrutiny and compliance with expert support and indemnity
- ✓ Maintain competitive positioning
Cost: Per-transaction fee, selection of appropriate partner
Next Steps
Assess Your Current Position
Use our checklist to determine your firm's readiness for the new requirements.
Download the Checklist →Understand the SDLT Check Solution
See how we outsource the SDLT process—collecting information, calculating, populating the SDLT1 and submitting on behalf of clients with our tax code.
How SDLT Check Helps →Book a Consultation
Talk through your specific situation with our team. We'll help you understand your options.
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