Anyone who interacts with HM Revenue and Customs (HMRC) about a client’s tax affairs will soon be required to register as a tax adviser. This is regardless of whether you view yourself as a tax adviser or describe your work as tax advice.

A less imminent but still significant change is to make the Financial Conduct Authority (FCA) the single professional services supervisor for anti-money laundering (AML) and counter-terrorist financing compliance. The transfer of responsibility for this is expected to be completed by 2028-9.

The Council for Licensed Conveyancers (CLC) has been vocal in our opposition to both these reforms, which we believe will duplicate regulatory effort and may reduce consumer protection and the risk of non-compliance by regulated professionals.

However, we recognise our responsibility to engage constructively with the government, the FCA and other regulators to ensure that these changes are communicated and implemented as efficiently and effectively as possible.

Registering as a tax adviser

We outlined our concerns about this earlier this year in a letter to the Chief Secretary to the Treasury, but the government is determined to press on even though delays to deadlines have recently been announced for parts of the financial sector. At the moment, registration must be completed by lawyers within three months from 18 May and you can find out more details here.

CLC-regulated conveyancers are not permitted to give tax advice, and we believe the move will only serve to duplicate regulatory effort and increase the regulatory burden in an area where there is currently no significant issue. It will also inevitably lead to increased costs being passed onto clients.

HMRC is expected to issue additional guidance on the registration requirements, and we are also seeking greater clarity on how they will apply.

We remain committed to ensuring that our regulated community has clear and timely information and will also be publishing our own guidance at the earliest possible opportunity.

AML supervision

It has been confirmed that the FCA is to become the single professional services supervisor for the legal and accountancy sectors, and trust and company service providers – a responsibility which currently falls to 22 Professional Body Supervisors including the CLC.

HM Treasury says the move is designed to make the system simpler, more consistent and robust, even though there has not been any evidence or persuasive arguments that money laundering will in fact be reduced.

The Treasury first consulted on the future of AML supervision in 2023 and our position remains the same, although our original concerns have since heightened.

We believe this move will also see duplication of regulatory effort, therefore increasing the regulatory burden, at the same time as reducing individual regulators’ insight into their regulated communities. The significant coordination and resources required to make up for the fracturing of regulatory oversight will inevitably lead to an increased financial burden being passed on to consumers.

Next steps

These reforms risk weakening the very systems they are designed to improve, but we have to make sure that they are implemented as well as is possible and continue to meet the high standards of consumer protection that the CLC currently provides.

Practices must have adequate time to prepare, and we await more details and further consultation on the operation of the new arrangements.

In the meantime, we will be doing everything we can to minimise disruption for those we regulate and make sure that they understand exactly what is required of them and when in order to remain compliant.

Stephen Ward is director of strategy and external relations at Council for Licensed Conveyancers