MTAR20400 - Checks against registration conditions: identifying relevant individuals
Meaning of ‘relevant individual’
Under Section 226 of the Finance Act 2026, a relevant individual is someone who works for the tax adviser (the legal entity that is required to register) and plays a significant role in either:
- making decisions about how all (or a substantial part) of the business’s tax advice activities are to be managed or organised
- actually
managing or organising all or a substantial part of those activities
For this purpose, ‘a substantial part’ means a significant and independent area of the business’s tax advice activities, having regard to its scale, importance or contribution to the business as a whole, rather than incidental or supporting tasks.
Where tax advice activities form only a minor or incidental part of a wider business function, this would not, by itself, mean that individuals responsible for that function meet the relevant individual definition. For example, individuals responsible for wider business functions (such as insolvency or restructuring) will not normally be relevant individuals where any tax advice activities they oversee are limited in scope or incidental to those wider activities.
This definition is deliberately substance based, not title-based. However, relevant individuals aren’t intended to be members of staff (including partners) whose only role is in providing day-to-day tax services to clients, even where they (or their teams) are the ones directly contacting HMRC.
What matters is the role the person plays in practice, not whether they are called a director, partner, member, principal, manager, or have a different title. Different businesses organise themselves in different ways, and the relevant individual definition is designed to work across those models.
In addition, there may be other officers who are treated as relevant individuals to meet the minimum statutory requirement, even if they do not meet the above criteria. This is explained in more detail below.
Who can be a relevant individual
A
relevant individual will normally be among the most senior people who play a
significant role in managing or organising all (or a substantial part) of the business’s
tax advice activities which cause registration to be required. This includes
individuals who are ultimately responsible for either:
- setting or approve the overall strategy, direction or scope of the business’s tax advice work
- making decisions about how tax advice services (including tax compliance) are structured, governed or controlled
- tax risk management, quality standards or compliance frameworks
- overseeing how the business engages with HMRC in relation to tax advice activities
How many relevant individuals a business must identify
Businesses should take a proportionate view based on how their tax advice activities are actually run and identify the individuals who best represent strategic and managerial control of all (or a substantial part) of those activities. This approach should mean that, even in large or more complex businesses, the number of relevant individuals identified remains limited to those with real governance and oversight responsibilities.
Businesses must first identify all individuals who meet the relevant individual definition based on the role they play in practice.
However, where a business has fewer than six officers (directors, partners, LLP members and overseas equivalents), legislation treats each of them as relevant individuals, alongside anyone else within the business who meets the definition of a relevant individual.
Where a business has six or more officers, the business is expected to identify those individuals who genuinely exercise strategic or managerial control over the whole (or a substantial part) of the tax advice activities, rather than naming all senior office-holders. This allows the definition to operate proportionately across businesses of different sizes, while ensuring that individuals with real influence and accountability are identified for checks.
Where a business has six or more directors, partners or equivalent office-holders, but fewer than five of those individuals meet the relevant individual definition based on the role they play in practice, the business must nominate additional officers to bring the total number of officers named as relevant individuals to at least five.
These additional individuals do not need to be the most senior officers by title. They should instead be selected from among the remaining officers. Nomination for this purpose does not imply that the individual has strategic control over tax advice activities, nor does it impose additional governance or managerial responsibilities. It simply reflects the minimum number of individuals that HMRC must be able to check where a business has a larger population of officers.
Treatment of partnerships and LLPs
For
partnerships and LLPs:
- where the partnership or LLP has five or fewer partners or members, all partners or members will be relevant individuals
- partners or LLP members who meet the relevant individual definition will be within scope
- businesses should consider how tax advice decision-making operates in practice, not just how it may be set out in governance documents
- international partnerships should consider UK-facing tax advice activities in particular, even where decision-making is shared globally
Where central committees or management boards set tax policy for UK activity, members of those bodies may be relevant individuals even if they are not UK-based. This only applies where they exercise substantive control over how the UK entity’s tax advice activities are managed or organised in practice. General oversight at a network level will not itself mean that an individual meets the definition.
Roles that are likely to meet the definition of relevant individuals
Whether someone is a relevant individual depends
on the role they play and the influence or control they exercise over how the business’s
tax advice activities are run. However, relevant individuals are likely to hold
roles or responsibilities such as:
- Head of Tax or Tax Practice Leader
- partner, director or senior employee responsible for setting the direction or scope of the business’s tax advice services
- any individual who determines which tax services the business offers
Examples
Small partnership
A tax adviser business has four partners. As officers of the firm, each partner is part of the senior leadership of the business.
Because the firm has five or fewer officers, the legislation treats all officers as relevant individuals, regardless of how responsibilities are divided between them in practice.
The firm should therefore declare all four partners as relevant individuals for registration checks. The firm should also consider whether there are any other employees who are an individual with significant control over how the firm’s tax advice activities are managed or organised. If there are, those individuals should also be identified as relevant individuals.
This example illustrates that for smaller firms (those with fewer than six officers), the rules operate simply: all officers are relevant individuals, alongside any non-officers who meet the definition.
A firm with centralised tax responsibility
A tax adviser business has seven officers. Only some of those officers are involved in setting the direction, structure or oversight of the business’s tax advice activities.
Because the business has six or more officers, it must apply the statutory test to identify which individuals are relevant individuals. This includes identifying any individual with significant control over how the whole (or a substantial part) of the business’s tax advice activities are managed or organised.
Officers who have no such control do not need to be identified simply because they are senior.
If, after applying this test, fewer than five officers meet the definition, the business must nominate additional officers to bring the total number of officer relevant individuals to at least five.
The business should also consider whether there are any other employees who have significant control over how the business’s tax advice activities are managed or organised. These individuals should also be nominated.
This shows that businesses should focus first on the criteria above, using nomination only to meet the minimum officer requirement where necessary.
Group or multinational structure
A tax adviser business delivers UK tax advice, but key decisions about how that activity is managed or organised are made at group or regional level.
The business should identify individuals who have significant control over how the UK tax advice activities are managed or organised, even where those individuals are based outside the UK.
Where a person plays that role in practice, by setting binding policy, controlling risk standards, or determining the approach to HMRC engagement, they will be a relevant individual.
This example shows that businesses should base their determination of relevant individuals on where control is held, rather than relying on formal reporting lines or geographic location.