The Law Society Q&A in Context
1. Introduction
The Law Society has published a Q&A on mandatory tax adviser registration in its property guidance hub. As a piece of compliance signposting before the 18 May 2026 commencement date, the Q&A will be useful. This note works through what it says, where it overreaches, and what firms should do.
It also works through what the Q&A is not, which is the arrival of a new duty. The duty has been in law since 1997. The case law has been settled in various formulations ever since. Mandatory registration is the point at which the system began enforcing a duty the conveyancing profession has had for nearly thirty years. That context is worth considering when reading the Q&A.
The note moves between two registers. Sections 2 to 4 deal with the technical content of the Q&A and the registration regime: what the Q&A says, where the payment point overreaches, and the crucial difference between registration and regulation. Sections 5 to 7 step out to the longer view: the relevant case law, the tax design problem that produced the registration regime in the first place, and the market structure shift the regime is now triggering. Sections 8 and 9 land on what this means for firms and where the Compass model sits within it.
2. What the Q&A Says
The Q&A makes three points that firms should treat as settled, regardless of how the technical arguments resolve.
First, firms that interact with HMRC in connection with SDLT must register. The Q&A treats both the filing of a return and the making of the SDLT payment as bringing a firm within scope. Licensed conveyancers and conveyancing solicitors are both caught.
Second, a solicitor without specialist tax knowledge should not advise on tax. The Q&A goes further and indicates that such a solicitor may need to advise the client to obtain specialist SDLT advice, particularly in relation to higher risk transactions.
Third, the Q&A directs firms to the Law Society’s broader guidance for solicitors advising on tax, which emphasises that the duty to exercise reasonable care and skill applies wherever tax forms part of the retainer and that limitations on scope must be clear, in writing, and brought to the client’s attention.
3. The Payment Point and Why It Reads Broader Than the Legislation Supports
Clause 2(3) of Finance Act 2026 defines what it means to interact with HMRC. The text reads as follows.
(3) Interacting with HMRC includes the following —
(a) contacting HMRC by telephone, post or email;
(b) sending a message to HMRC through a website or internet portal;
(c) filing a return, claim, notice or other document with HMRC (whether electronically or otherwise);
(d) communicating with HMRC in any other way.
The natural reading is that interaction is communication or filing. A payment is neither. A BACS transfer to HMRC’s bank account moves funds. It does not file or communicate. The legislative record reinforces that reading. The Exchequer Secretary, addressing scope in committee on 3 February 2026, described the regime as catching anyone paid to interact with HMRC by submitting tax returns or other information. The HMRC policy paper, the December 2025 email to the Bold Legal Group, and the GOV.UK guidance all use submission language. None of them treats payment in isolation as the trigger.
The Law Society’s Q&A nonetheless treats the firm that remits the SDLT payment as part of completion as itself within scope, even where filing is removed. HMRC has indicated through stakeholder engagement that this is the position it will adopt, and formal guidance is expected to confirm that payment of SDLT constitutes interaction for the purposes of the regime. The narrower reading from the strict text of Clause 2(3) remains intellectually available, but it is not the reading firms should plan around.
The practical point for firms preparing for 18 May is therefore straightforward. HMRC has effectively settled the question. Most conveyancing firms will fall within the registration requirement regardless of how they handle the underlying SDLT work. The technical argument about Clause 2(3) is a question for the longer term, perhaps for judicial scrutiny if the regime ever produces a contested suspension, rather than for compliance planning before May.
4. Registration Is Not Regulation
This is the point most likely to be misread, and the one most worth getting right.
Registration is a regulatory gate. It maintains a register of firms interacting with HMRC on third party tax affairs. It sets minimum standards for those firms. It allows HMRC to exclude firms that fall below those standards. That is what the legislation does. It is not the same as turning every firm on the register into a substantive tax adviser, with an expanded duty to advise clients on tax matters they were not retained to advise on.
The Exchequer Secretary set this out in committee on 3 February 2026:
That is not the same as regulating tax advice. HMRC will not review the quality of the advice provided, qualifications or professional conduct. Instead, the measures are specifically about stopping harmful tax advisers who do not meet the basic minimum standards.
The HMRC policy paper makes the same point in different language:
It is right that tax advisers who have access to sensitive taxpayer information meet basic minimum standards. This requirement is not the same as regulating tax advisers. HMRC will not review the quality of the advice agents provide, qualifications, or professional conduct.
A firm on the register is a firm that has cleared an HMRC compliance gate. It is not, by virtue of having cleared that gate, a substantive tax adviser with broader duties to its clients than it had before. The firm’s substantive duty on tax matters continues to be governed by the retainer, the SRA or CLC regulatory framework, and the case law on retainer scope and incidental tax duties. The label HMRC requires the firm to display does not rewrite those underlying obligations.
Kennedys, in its March 2026 analysis of the regime, made the same point from a professional indemnity perspective: where the calculation and submission of SDLT already falls within the scope of the retainer, the solicitor is already under a duty to exercise reasonable skill and care, and that duty exists irrespective of how the activity is described for regulatory purposes. The Conveyancing Association approached the same question from the opposite angle, warning that the registration label is misleading and suggests a level of tax advice conveyancers are neither qualified nor insured to provide. Both observations point to the same underlying truth. The label and the role are not the same thing.
Registration does not expand a firm’s legal duty on tax, but it does change how visible that firm is to HMRC. Registration creates a structured dataset HMRC has never had before: a named register of every firm submitting SDLT returns on behalf of clients, directly linkable to those returns. That enables analysis at firm level rather than just transaction level. Error patterns, relief usage, amendment frequency and other behavioural indicators become visible and comparable across the market. HMRC does not need to assess the quality of advice to act on that information. It only needs to identify outliers and direct compliance activity accordingly.
At the same time, the regime introduces a formal exclusion mechanism. Complaints become more significant because there is now a defined outcome attached to them. Registration does not create more complaints, but it gives them somewhere to go. Once firms sit within a register that can be acted upon, the threshold for intervention is lower and the consequences of scrutiny are clearer.
5. A Duty Older Than the Regime
The case law on SDLT and conveyancers’ tax duties did not begin with the Q&A or with the new regime. It begins, for these purposes, with Hurlingham Estates Ltd v Wilde & Partners in 1997. Lightman J held that a solicitor on a property transaction owes a duty either to advise on the structure that avoids a tax charge or to refer the client to a specialist. The decision predates the introduction of SDLT itself.
Credit Lyonnais SA v Russell Jones & Walker, in 2002, extended the principle. A solicitor who becomes aware of a risk while carrying out the retainer must point it out, even where the risk falls outside the formal scope of the work.
Minkin v Landsberg, in the Court of Appeal in 2015, qualified Hurlingham but reaffirmed its substance. Advice that is reasonably incidental to the retainer is implicit in the engagement. Limitations must be clear, in writing, and brought to the client’s attention.
Lewis v Cunningtons Solicitors, in 2023, applied the same logic to a one size fits all disclaimer in a divorce matter. The disclaimer was held ineffective. Damages were £400,000.
The duty to perform the SDLT function competently, to flag complexity that falls outside the firm’s competence, and to refer the client to a specialist where appropriate, has been settled law for nearly thirty years. It has applied to every conveyancing solicitor and every licensed conveyancer who has filed an SDLT return in that period. It is older than SDLT itself, older than the agent services account, and older than the regulatory regimes that touch conveyancing today.
What is new in 2026 is not the duty. It is the visibility. The Q&A places the duty next to a registration label, a published professional body position about specialist referral, and a set of HMRC standards a registered firm must meet. The registration regime formalises something that has been in place for decades and the market will need to respond accordingly.
6. What the Regime Is Patching, and What It Is Not
The mandatory registration regime exists because SDLT does not work as a self assessment tax in the volume and complexity at which it is administered.
The design assumes that taxpayers, with help from registered agents, can correctly compute and submit a return for any property transaction, however technically complex. The reality is different. In 2024 to 2025, HMRC processed approximately 1.16 million SDLT bearing transactions, generating £13.9 billion in receipts. Each of those transactions requires a return, in many cases involving multiple dwellings relief, mixed use analysis, higher rates surcharge calculations, non-resident surcharge questions, linked transaction rules, lease premium and net present value calculations, partnership treatment, or one of the other technical structures the SDLT code applies to property dealings. The returns are administered overwhelmingly by people who are not tax specialists.
The result is observable in three places. The repayment agent industry, with all its excesses, exists because the front line gets it wrong often enough to make refund chasing a viable business. Professional indemnity claims arising from SDLT errors are a steady feature of the conveyancing PII market and a recurring topic in published commentary by Marsh, Howden, Kennedys, and the SRA. The Law Society Q&A itself, telling solicitors without specialist tax knowledge to direct higher risk matters to a specialist, is the third piece of evidence: the profession’s own representative body has now published a position that implicitly recognises the gap between the work being done and the competence available to do it.
The mandatory registration regime addresses the symptom. The minimum standards gate, the suspension power, and the Standards for Agents notice all aim at filtering out unfit operators. None of them addresses the cause. The cause is that a tax of this complexity should not be administered, in the volume it is, by a profession structured around general legal services rather than tax specialism. That is a tax design problem, and it is not within the regime’s reach.
What the regime does, and this is its most useful function, is force the market to make decisions about how the SDLT function is going to be delivered going forward. The decisions firms make in the next twelve months will shape the structure of the market for the next ten years.
7. The Shift This Regime Triggers
Conveyancing has been here before. Title searches moved from in house production to specialist platforms over the course of the 2000s. Identity verification followed in the 2010s, accelerated by the SRA’s identification rules and the digital ID consultation. Anti money laundering screening moved out, then sanctions checking, then lender handbook compliance and panel management. The pattern is consistent. A function originally treated as part of the firm’s general practice becomes specialist enough that maintaining it in house is no longer rational, and a specialist infrastructure layer emerges to absorb it. The firm continues to own the client relationship and the regulatory accountability. The specialist owns the technical work and the technical risk.
SDLT is the next item on that list. The mandatory registration regime, the new HMRC standards, the published Law Society position on specialist referral, and the case law trajectory all point to the same conclusion. The conveyancing function is not going to be structured around in house SDLT specialism in most firms. It is going to be structured around specialist infrastructure that holds the technical work, the audit trail, the supervisory framework, and the insurance.
What is new in 2026 is not the duty, and not the registration label. The duty is from 1997. The label is administrative. What is new is the recognition that the duty cannot be discharged at scale within the existing market structure, and the market is being asked, formally, what it intends to do about it.
The next decade will not produce a uniform answer. A small number of firms will absorb specialist standards in house, price for them, and treat SDLT as a competitive differentiator. Most will not. The work has to go somewhere. The infrastructure layer is the answer the system has been working toward, in halting and partial form, for years. The registration regime is the moment that becomes legible.
8. The Practical Question for Firms
Set against that frame, the practical question for firms before 18 May becomes simpler. It is not whether to register. For most firms the answer is now yes, regardless of model and regardless of how the payment point ultimately resolves. It is how to perform the SDLT function once registered, in a market that is moving toward specialist infrastructure rather than away from it.
Three positions remain coherent.
A firm with genuine SDLT specialism, evidenced by appropriate training, supervision, audit trail, and competence, can register and continue to handle SDLT in house. The label and the work line up. That position is sustainable for firms with the volume to staff for it and the pricing power to charge for it. A small number of firms will do this well.
A firm without that specialism can register and continue to handle SDLT in house, holding a label which the Law Society and the case law will use as a benchmark for the work performed. The risk in that position is not the label per se. It is the gap between the label and the work, which the case law has consistently treated as a basis for liability rather than a defence. Some firms will accept that exposure for as long as it does not crystallise. Others will discover that PI premiums, claim history, or a single high profile mistake force the position to change anyway.
A firm without that specialism can register, hold the label as a regulatory matter, and route the substantive technical work through a specialist infrastructure layer. The label sits on the firm. The substantive work, the audit trail, the supervisory structure, and the technical insurance sit with the specialist. The label and the work line up by a different route. That position is the one the structural shift in the market is moving toward, and the one most firms will end up in once the implications become clear.
9. Where the Compass PMC Model Sits
Compass operates the Per Matter Concierge service. PMC was not built around the registration regime and it is not the answer to a Clause 2(3) question. PMC was built around the structural argument: that SDLT, like every other function that has migrated to specialist infrastructure in the last two decades, is more efficiently and more safely delivered through a specialist provider than through general practice in house resourcing. The registration regime has made that argument visible. It did not create it.
Under PMC, Compass performs the SDLT analysis to specialist standards, prepares and submits the return as the named submitting agent, captures client authority directly through the Compass portal, and retains a seven year audit trail per matter. Compass holds professional indemnity insurance of £2 million per claim, with no aggregate cap and no deductible. AML supervision is in place. Compass is registered with HMRC as a tax adviser and meets the eligibility conditions in the legislation.
For firms that are registering, which on the Law Society’s reading will be most of them, PMC delivers two things. First, the underlying SDLT function is performed to specialist standards by a specialist provider. The duty of care the firm owes its client on the SDLT function is discharged through specialist work supported by specialist insurance, rather than absorbed by the firm. Second, the registration label sits on a workflow that has been documented, audited, and supervised at the level the case law and the new HMRC standards expect. The label and the work line up.
PMC is not, and is not sold as, a route to avoid registration. Earlier Compass material explored whether the structural facts of the model could support a narrower reading of Clause 2(3); HMRC’s position has resolved that question in favour of the broader reading, and firms should plan on that basis. The argument firms should plan around is that the SDLT function is being rebuilt around specialist infrastructure, the registration regime is the moment that rebuild becomes legible, and the firms that read the regime as a structural question rather than a compliance puzzle will be in a different position by the end of the decade.
Firms approached by providers who continue to market outsourcing as a route to remove the registration obligation should treat that messaging with caution. HMRC and stakeholder commentary have both flagged concern about that framing in the market. Compass’s view is that registration is now a settled question for almost every conveyancing firm. The honest commercial conversation is not about removing the label. It is about whether the work behind the label meets the standard the label invites.
10. Summary
The Law Society Q&A is broader than the legislation cleanly supports on the payment point, and most firms will register either way. The Q&A is correct that registration brings scrutiny of the substantive work, and the case law it draws on is correct that disclaimer language will not narrow a duty the firm has performed. None of that is new. The duty has been in law since 1997.
What is new is that the registration regime, the Q&A, and the published professional body position together force the market to confront a question it has avoided for nearly thirty years: how is the SDLT function actually going to be delivered, at scale, in a profession that is not structured around tax specialism. The answer the market is moving toward is specialist infrastructure. The conveyancing function has been through this transition already with title, identity, AML, and lender compliance. SDLT is next.
Compass is built around the answer, not around the regime that made the answer legible. The PMC model is the proof point. The note is offered to firms thinking through where they want to be when the shift completes.
To find out more about Compass Concierge book a no obligation meeting here.