HMRC Requires Payroll Providers to Register as Tax Advisers

His Majesty's Revenue and Customs (HMRC) has confirmed that payroll service providers that engage with HMRC on behalf of clients must register as tax advisers through an Agent Services Account (ASA). This requirement applies when the provider submits Pay As You Earn (PAYE) returns, manages HMRC correspondence, resolves tax code issues, or otherwise represents the employer in tax matters.

To register for an ASA, businesses must be overseen by an Anti-Money Laundering (AML) Supervisor. HMRC supplies AML supervision.

If your organisation uses a provider for payroll in the United Kingdom, this is a regulatory change that warrants your attention. If your provider is based in India, South Africa, Ireland, or anywhere else in the world but interacts with HMRC on your behalf for UK payroll, it is subject to this new requirement. The trigger is not geography; it is a representation in UK tax affairs.

What This Means for Customers

The new ASA online registration system launches on 18 May 2026. Payroll-only service providers will then have a specific window within which to complete the registration.   

If you outsource UK payroll, you remain responsible for compliance. After the relevant deadline, HMRC will not allow unregistered providers to act for clients. Practically, this could mean:

• Inability to submit Full Payment Submission (FPS) or Employer Payment Summary (EPS) filings
• Delays in resolving PAYE queries
• Disruption in managing changes in employee tax codes or notices
• Compliance exposure for your organisation

The responsibility to register and meet the requirements lies with the provider; however, the operational and reputational risks rest with your organisation.

This is especially significant for organisations with global delivery models or offshore shared service centres. Employers might believe that because their provider operates outside the UK, local UK regulatory changes are less important. However, that assumption would be mistaken.

These are examples of questions to ask your current payroll provider that manages (a part of) UK payroll on behalf of your organisation.

• Do you have an ASA registration for UK payroll activities?
• Will you be registering under the new HMRC tax adviser rules?
• Does this apply to your offshore or shared service teams managing UK payroll?
• What contingency plan is in place if registration is not completed on time?

This is an excellent opportunity for (global) payroll professionals to collaborate with stakeholders such as the legal, procurement, and tax departments in reviewing their providers and related contract management.

The Wider Signal

A broader shift is underway. HMRC is increasingly formalising payroll intermediaries within the regulated tax advisory sector. This raises expectations for transparency, eligibility checks, and anti-money laundering oversight. For payroll professionals, the message is clear: outsourcing does not transfer accountability.

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Max van der Klis-Busink, MCIPP, RPP, is the Owner of Passion For Payroll and Vice President of Global Strategy on PayrollOrg’s Board of Directors.