The payroll industry is about to experience one of its biggest regulatory shifts in decades. HMRC has now formally confirmed that payroll service providers who interact with HMRC on behalf of clients will be legally classified as “tax advisers” and must therefore register with HMRC and be supervised for Anti‑Money Laundering (AML).

This new requirement brings payroll bureaus into the same regulatory framework as accountants, tax agents, and advisers reflecting HMRC’s broader push to strengthen standards, transparency, and accountability across the tax advice market.

Why Payroll Providers Are Now Classified as Tax Advisers

HMRC’s policy direction has been clear since its 2025–26 legislation process: anyone who assists another organisation with their tax affairs or interacts with HMRC on their behalf is considered a tax adviser. This includes payroll bureaus, because they routinely submit PAYE, RTI filings, and respond to HMRC queries for clients.

While this wasn’t always the case, the updated definition is intentionally broad. Under the new rules, HMRC wants:

• More visibility over who is acting on behalf of taxpayers,
• Assurance that advisers meet professional standards,
• Consistency in AML supervision across all agent types.

This step is intended to close long‑standing regulatory gaps and protect both businesses and HMRC from poor‑quality advice or financial crime vulnerabilities.

Key Dates Payroll Providers Must Know

HMRC published the rollout schedule on 17 February 2026, confirming the following:

• 18 May 2026 – Early voluntary registration opens.
• 18 November 2026 – Mandatory registration opens for payroll‑only service providers.
• 18 February 2027 – Final deadline to register. After this point, unregistered providers cannot interact with HMRC on behalf of clients.

This means every payroll bureau or outsourced payroll service handling client communications with HMRC must register for an Agent Services Account (ASA) and be AML‑supervised.

AML Supervision: Now Compulsory for Payroll Providers

To register as a tax adviser with HMRC, payroll service providers must first be under an approved Anti‑Money Laundering supervisory body. HMRC emphasises that AML supervision is mandatory for any business interacting with HMRC on behalf of another taxpayer.

This includes supervision for:

• AML policies and controls
• Client identity checks
• Risk assessments
• Staff training
• Reporting suspicious activity

AML governance becomes a core regulatory responsibility for payroll providers from 2026 onwards.

What Happens If Payroll Providers Don’t Register?

HMRC has made it clear that failure to register has serious consequences:

• System lockout – You will not be able to access HMRC services on behalf of clients.
• Financial penalties – Non‑registration can lead to fines up to £5,000.
• Operational disruption – You cannot legally act as an agent for PAYE or payroll tax matters.

These consequences were highlighted following HMRC’s February 2026 announcement.

For payroll bureaus supporting hundreds of employers, this could halt client services entirely making early preparation essential.

What This Means for Employers

For UK businesses, this change won’t alter how payroll is run day‑to‑day.

But it will matter who you choose to outsource to.

From November 2026 onwards, employers must ensure their payroll provider is:

• Registered as a tax adviser with HMRC
• AML‑supervised
• Operating with approved standards
• Able to continue interacting with HMRC

Choosing a provider who is not compliant would put your PAYE operations at risk.

PayCheck’s Reassurance: We’re Already Fully Compliant

While the new rules may cause concern across the sector, PayCheck clients can be completely confident:

✔ We are already supervised for AML by HMRC: PayCheck has long met AML regulatory standards well before these new rules were introduced.

✔ Our payroll specialists are CIPD‑qualified and recognised as tax advisers for payroll: Our team already meets the professional competence requirements HMRC expects of tax advisers in the payroll space.

✔ We will manage all registration and compliance steps required for our clients: There will be no impact, disruption, or additional burden on our clients. If anything, these changes formalise the high standards PayCheck has always upheld.

✔ PayCheck can also liaise directly with HMRC: On behalf of clients, ensuring all communications, submissions and compliance responsibilities are handled smoothly and professionally as part of our managed payroll service.

How PayCheck Is Supporting Businesses Through the Change

To make the transition smooth and stress‑free, PayCheck will:

• Handle the HMRC agent registration process
• Maintain AML supervision and controls
• Communicate updates openly with clients
• Ensure uninterrupted access to HMRC systems
• Continue delivering compliant, secure payroll outsourcing

This is one more reason why partnering with a specialist payroll provider matters, especially as regulatory expectations increase.

Need Guidance? We’re Here to Help

If you are a business owner, HR leader or finance manager and you want clarity on how the 2026–2027 changes will affect your payroll operations, we are happy to talk.

Book a call with a PayCheck payroll expert today. We will walk you through what the new “tax adviser” rules mean and ensure you’re fully covered.