Any firms or sole practitioners who ‘interact’ with HMRC in the course of their client work will be required to sign up to the new register of tax advisers from next year, with the risk of penalties of up to £5,000 for non-compliance although there will be a three-month transition period.

HMRC estimates that there around 85,000 tax agent businesses in the UK, including partnerships and sole traders, which could be affected by the new registration requirements.

While the register is for firms, HMRC will have the powers to spot check individuals to make sure they are complying with their ‘minimum registration standards’.

In a written response to Business & Accountancy Daily, HMRC stressed: ‘It is firms (the legal entity) that must register rather than individuals, but as part of the registration process HMRC will also apply checks to a limited number of relevant individuals operating within these firms.