MTAR10150 - Scope and requirement to register: arrangements involving multiple businesses
Overview
In many cases, tax advice is delivered through arrangements involving multiple businesses. These may include subcontracting, outsourcing, group structures, and the use of external specialists such as legal counsel. In these arrangements, more than one person or business may practically contribute to the delivery of advice to a single client.
This guidance explains how the interaction requirement (necessary for mandatory registration to apply) operates where multiple businesses contribute to the delivery of tax advice. It explains how to identify which business is interacting with HMRC for the purposes of the registration requirement. Separate provisions and exceptions may apply to particular arrangements, including those involving corporate groups.
Further guidance on groups and complex business structures can be found at MTAR10200.
Statutory position
The registration requirement must always be applied in a way that reflects how these arrangements operate in practice. Whether registration is required depends on whether the person meets the conditions set out in legislation. The legislation places the responsibility to register on businesses that interact with HMRC on behalf of clients.
For the purposes of the registration requirement, legislation defines who is a tax adviser and when registration is required.
Under section 224 of the Finance Act 2026, a tax adviser is:
a person who, in the course of a business, assists other persons ('clients') with their tax affairs
This includes, in particular, a person who:
acts, or purports to act, as agent on behalf of a client in relation to tax or assists with the preparation of, or provides input into, any document that HMRC is likely to rely on in determining a person's tax position
Importantly, the requirement to register only applies where that activity involves interaction with HMRC. The legislation provides that registration is required where a person:
interacts with HMRCin relation to another person's tax affairs, and does so, in the course of a business.
Taken together, these provisions mean that a person will only be required to register where they meet all three of the following conditions:
- act as a tax adviser (or otherwise assist a client with their tax affairs);
- interact with HMRC in that capacity; and
- they do so in the course of business.
The interaction requirement is central to determining who must register. The same principles apply in in arrangements involving subcontractors and other arrangements involving multiple businesses.
The application of the principles
In arrangements involving multiple businesses, it may not always be immediately apparent which business is interacting with HMRC for the purposes of the registration requirement. For example, more than one business may contribute to meetings, correspondence or other communications involving HMRC. A business may contribute to, or participate in, communications with HMRC as part of another firm's engagement without itself being treated as interacting with HMRC for the purposes of the registration requirement. In applying the legislation, HMRC will consider the practical reality of the arrangement, including which business is acting on behalf of the client in that interaction with HMRC.
In some cases, a firm may engage another party to contribute to the work, including attending meetings with HMRC or assisting with correspondence, but the interaction is made under the authority and control of the principal adviser that engaged that party and remains responsible for dealing with HMRC on behalf of the client. In these circumstances, the interaction is treated as being made by that firm.
Where more than one business is involved in delivering services, it is necessary to consider the capacity in which the business is communicating with HMRC. A business may contribute to, facilitate, or carry out communications with HMRC as part of another person’s tax advice relationship without itself interacting with HMRC as a tax adviser in its own right. It is therefore necessary to consider whether, in practice, the business is interacting with HMRC for the purpose of providing tax advice to a third party, or whether it is simply facilitating another business’s engagement with HMRC.
In other cases, a subcontracted party may deal with HMRC in its own capacity. This may arise where a business assumes responsibility for communicating with HMRC on behalf of the client, or presents itself as the person acting for the client in that interaction. In those circumstances, that party would be required to register.
This distinction applies across a wide range of arrangements where multiple businesses contribute to the delivery of services, including subcontracting or the use of external specialists. A business (or individuals working for a business) may contribute significant technical input, participate in discussions, or be closely involved in the delivery of advice, but will not be required to register unless they are responsible for the interaction with HMRC.
In practice, this requires firms to consider who is acting on behalf of the client in the interaction with HMRC. This includes considering whose authority the interaction is made under, how the interaction is presented to HMRC, and which person is responsible for managing that exchange. The existence of a contractual relationship, or the way in which fees are paid, may provide context but will not determine the outcome. These factors help determine whether a business is interacting with HMRC in its own capacity, or is contributing to another person's interaction with HMRC.
Example 1: Specialist supporting another adviser's interaction
A principal adviser is engaged by a client to provide advice on a complex technical issue. The principal adviser engages an external specialist to provide technical expertise and attend discussions with HMRC.
The specialist contributes to meetings and correspondence with HMRC but does so as part of the principal adviser’s engagement. The principal adviser remains responsible for managing the interaction with HMRC and acting on the client's behalf.
The principal adviser is required to register.
The specialist is not required to register in respect of that work because they are supporting the principal adviser’s interaction with HMRC rather than dealing with HMRC in their own capacity.
Example 2: Relationship with overseas expertise
A client has a long-standing relationship with a tax advice firm based overseas. The overseas firm engages a UK firm to provide advice on the client's UK tax affairs and to deal with HMRC in relation to those matters.
The overseas firm retains the wider client relationship, but the UK firm is responsible for communicating with HMRC and managing those interactions.
The UK firm is required to register.
The fact that another entity holds the wider client relationship does not alter the position where the UK firm is responsible for the interaction with HMRC.
Example 3: Subcontractor supporting a principal adviser
A tax adviser engages a subcontractor to assist with preparing tax returns and related correspondence.
The subcontractor carries out work which contributes to communications with HMRC, preparing material used in those communications. Where access to HMRC systems or authorisations are required, the subcontractor does so through arrangements put in place by the tax adviser. All interactions with HMRC are undertaken under the direction of the tax adviser, who remains responsible for dealing with HMRC on behalf of the client.
The tax adviser is required to register.
The subcontractor is not required to register in respect of that work because it is supporting the tax adviser’s engagement rather than interacting with HMRC independently.
Example 4: Subcontractor acting independently
A business provides consulting services to several tax adviser firms. As part of those engagements, it supports the advisers in preparing tax returns and correspondence but does not independently interact with HMRC. The majority of the business' work is providing these types of consulting services.
The business also provides tax advice directly to a small number of its own clients. For those clients, it holds authority to act, corresponds with HMRC on their behalf, and is responsible for managing those interactions.
The business is not required to register in its capacity as a subcontractor, but the obligation does arise where the business interacts with HMRC on behalf of its own clients. This applies despite the majority of the business' services being provided on a consulting basis as subcontractor.