Enter Your E-mail

TW Ed ponders some of the implications of HMRC's developing policy for evaluating and dealing with Tax Agents.

This week, I have been watching the combined HMRC / CIOT / ATT webinar on the "new" Tax Agent Strategy, hosted by John Whiting. It has been suggested that this project will be “bigger” than Self Assessment. My gut reaction was to disagree – impossible! – but on reflection, it could well be.

To be fair to HMRC, Jenny Cowles (Head of Agent Strategy) made it quite clear that HMRC is still driving this forwards on the same core principles: maximising revenue to the Exchequer, and minimising costs, while improving the “customer experience”. (Eugh).  There has been no radical overhaul but more of a facelift of the 2011 model – for instance, the “Agent View” through which HMRC intends to evaluate a tax agent’s activity has now been re-branded as “Agent and Client Statistics”.

The problem for HMRC has been the fact that many agents have multiple agent references and HMRC has not previously been able to bundle those together to derive coherent information. The solution will be to move each tax agent firm to a unique code – and this will be happening over roughly the next year or so.

It seems that HMRC has further warmed to the idea that agents can do more of HMRC’s routine work. Perhaps on the basis it will keep agents busy while freeing up HMRC resources to police the system,  as suggested by a sage fellow adviser a couple of years ago. Or, as the current CIOT President Stephen Coleclough put it: “It may well be that auditing what agents have done will be one of HMRC’s main jobs, as we will be the people doing most of the processing on their behalf”.

What do tax agents get out of this? Well, if they are members of a professional body, then they should soon be able to enrol new clients without needing a 64-8 or involving the client directly – a new “passive” authorisation system is set to be introduced, and clients will have to take action only if they object to a new agent. More and better access to HMRC’s systems is proposed and there will be a consultation: “Help Us to Help You to Help Us to Save Costs”, may not be the title.

More seriously, there is a real risk that tax agents will be out-manoeuvred by HMRC if they are not careful. Imagine you are having a technical spat with an ornery Inspector who objects to a particular treatment for, say, a client’s travel from home office to his or her surgery. Today it might be one tax enquiry; tomorrow it could be every one of the firm’s clients, with travelling expenses on their tax return – just as a precaution.

And even if it never happened, would the mere risk that it might, effectively hobble the agent and prevent him representing his client as independently as he could, or should?

The webinar is available courtesy of LexisNexis at HMRC Tax Agent Strategy

Regards all,

TW Ed