HMRC postpones agent view pilot

HMRC has responded to concerns from professional tax bodies by postponing a three-month test of its Agent View strategy for dealing with tax advisers.

Under its original plan, HMRC planned to select 80-90 tax agents whose clients’ returns and payment performance fell outside the department’s expected norms.

One of the more controversial elements of the department’s broader agent strategy, the agent view would extend HMRC’s risk-based compliance approach to advisers, who would be assessed according to their clients’ performance.

Drawing on data from its various computer systems, HMRC plans to monitor advisers’ performance by an agreed yardstick to compare how they perform against the norm.

Where problems are identified, HMRC would make contact with the firm or adviser to identify the reasons for any discrepancies in their performance. The pilot scheme will involve “collaborative meetings” where experienced agent account managers would explore why advisers’ client filing or payment rates were below average and ways things might be done differently. The department emphasised that they would not be compliance visits and that they would not discuss any client-specific matters

But the professional tax bodies had enough concerns about the scheme to write HMRC chief executive Lin Homer a letting asking for the test run to be suspended until those concerns were addressed. The pilot was due to get under way by the end of August, but HMRC announced on the 24th that it would delay the test run.

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Comments

.    1 thanks

ireallyshouldkn... | | Permalink

I dont seem to understand why its anything at all to do with us as agents if (a) clients pay their tax late and (b) they are late with their filings.

That's more or less entirely down to the client to deal with, not the agent.

Until HMRC recognise this important point the whole thing is going to be a farce.

I cna imagine it now, young HMRC bod in my office tapping at his clip board "22 of your clients have not paid", and my shrugging my shoulders and saying "my job to file the returns, your job to collect the cash"

 

taxhound's picture

I have one really bad client

taxhound | | Permalink

I have one really bad client who owes about 5 years of tax returns.  We filed the 2011 return in May 2012 when the daily penalties kicked in and I could finally get the missing info out of him.  But several years before that remain outstanding and he won't give me the info, even though he is due a refund!  I must confess I have (almost) stopped chasing him because he takes no notice.  Until HMRC come down on him I think this is how it will remain.

If I am going to be judged on this client's performance, he will become an ex client, which surely makes it even worse all round.

petersaxton's picture

HMRC view

petersaxton | | Permalink

I can see how HMRC may put 2 + 2 together and come up with 5.

They think that if some agents have a bigger proportion of clients not submitting tax and/or not paying tax then it must be the fault of the agents for not chasing the clients or explaining what needs to be done.

I know what it would mean for me. I would stop phoning clients and use recorded methods like email, sms and letters.

I have one client who is several years behind and every week I phoned him and he promised to give me the information within the week yet he didn't. After a few months of this charade I stopped phoning him. 18 months later he gets a £1,200 penalty and he thinks HMRC are being outrageous. He says that HMRC owe him money so they shouldn't penalise him. I point out that HMRC don't know the situation because he hasn't submitted any tax returns and anyway he has an obligation to submit a tax return no matter what his tax situation is.

Some people cannot think logically. It's not an agents fault if an individual taxpayer is inadequate in some way but if HMRC see that one agents clients are 10 times worse than the average then it would be difficult to argue against.

Maybe tax collecting should be franchised out like the railways. I know people criticise the railways but would it be better if it wasn't privately run?

DMGbus's picture

HMRC correct with this project if...

DMGbus | | Permalink

If say, an agent with 100 clients has 50 of them late with tax returns then surely there's something wrong with that agent - half his clients non-compliant.

Perhaps the agent has personal problems and is incapable of helping half his clients be compliant and needs help.

OK, the 50 clients maybe all at fault (unlikely for half an agent's clients to be in arrears unless agent lacks ability to properly remind clients).

Now, we don't know HMRC's cut-off point on what proportion of an agents clients would be in arrears with returns to trigger an intervention, but surely there IS merit in looking at those agents who seem to specialise in having a bad portfolio of clients in respect of compliance?   Definitely worth looking at in my view.

I suppose some in the industry will see this a the tip of the iceberg and wonder if HMRC might extend this review of agents to looking at those whose clients seem to always pay less tax or get higher tax refunds than similar clients in other practices.   I can see that fraudulent agents might fear this risk to their business (you know the sort of agent - "guaranteed refunds" "fee deducted out of tax refund" "fee as a percentage of tax refund" can be indicators of potential problems).

There can most certainly be cultural (non-compliance attitude) problems within any business that affects the tax yield from that business - problem with accountancy practices is that if the "bad cutlure" is within the accountancy practice then this has a multiplying / breeding effect in terms of infecting clients.    Good accountancy practices should applaud HMRC's approach as surely they have nothing to fear?

 

Moonbeam's picture

Sorry, but I don't trust HMRC

Moonbeam | | Permalink

I cherry pick my clients so I don't have to deal with the hopeless/helpless category very often.

But someone has to and I don't trust HMRC officials not to make a snap judgement against us.

We have heard of performance pay and I can see it would be rather lucrative for them to make assumptions and then fine us heavily on the basis that our clients aren't "performing".

ShirleyM's picture

I have a foot in both camps

ShirleyM | | Permalink

I can see that removing rogue agents would benefit HMRC, the country, and the accountancy profession.

However, like Moonbeam, I don't trust HMRC to be the ones who make decisions about the quality of agents.

squay's picture

We Don 't Act for Half Our "Clients"    1 thanks

squay | | Permalink

Maybe I'm exaggerating but we have a lot of clients listed on our HMRC website that we no longer act for and this has accumulated over many years (26 to be exact). Many haven't changed accountants, they've just retired, deceased or ceased self employment or are doing their own returns. We still get notices from HMRC for them and apparently deleting them won't stop this. I raised this question with HMRC at a road show a few years ago and they said you had to write to the individuals tax office and agreed it was a chore. A very time time consuming chore that we haven't had time to get around to. Why can't we disassociate them online with a click? However, now that SA is administered centrally I suppose one letter should suffice listing all the clients to be  disassociated. I have written occasionally in the past but with limited success so I am somewhat sceptical. 

Now this Agent View Pilot is alarming if we are to be judged on client performance by the clients' own actions. Give us the tools to clean up our client list first please. If anyone know a simple way to do this that works please let me know.

I think what bothers me about    1 thanks

ireallyshouldkn... | | Permalink

I think what bothers me about this is that Agents do not work for HMRC.  We are not there to have our "homework marked" by them, regardless of how well or badly the practice is run.  Thats upto the person or people running it.

Agents work for their clients, therefore the clients are "the boss" if they chose to pay late, or chose not to send their records in thats' simply not down to the agents. You can chase until you are blue in the face but if they dont want to send the stuff in then, that's very much up to them.

Moreover even if HMRC do come out and have a moan about practice A or practice B, so what?  Do they have any sanctions available to them?

So what would the *point* of such visits actually be?

The sorts of agents who are in a right old mess are unlikely to listen, they will keep on taking on work they have no hope of getting done, or not do the work they have got as they simply cant/wont/other reason get it done.

And the sorts of people who are in good control but happen to have a long list of poor payers or bad submitters of info (there has to be a niche in there somewhere) the visit will be pointless too. I imagine if I did a lot of CIS my clients payment record would be poor for example.

And at the end of it all what is the purpose of the visits?

Whats next, are they going to grade agents like local authorities do for take aways? 1-5 stars on the door?  Btw if HMRC are reading this, that's not a suggestion.

Moreover (excuse the full on rant mode) this seems to have come out of something like this:

1. Q HMRC are crap, but returns still get sent in and tax paid. Why is this?

2. A - agents do 99% of the work for us.

3. Q, if agents do 99% of the work, do some agents perform better than others?

4. A - logic and anecdotal evidence suggests some are good, some are bad and many in the middle.

5. Q  - so if we could make the poorer agents perform better, we could get better tax collection and more returns in on time?

6. A - well yes I suppose

7. Brilliant, we will go and seek out the poor agents, and er "help" them improve as an easy win. Its easier than reforming ourselves after all, and if agents complain, well they are probably hiding something........

 

 

Pot and Kettle

Phil Smith | | Permalink

This really is the pot calling the kettle - I tried to get a copy of a P11D that HMRC said was submitted by a client to be told that I would be available on 26th October - more than 2 months hence. And this had been submitted electronically apparently!! All the while HMRC would still be chasing the small amount of Class 1A NI that they (wrongly) claim was due.

If I took that long to send my clients a document I would be out of business in no time.

Locutus's picture

Won't Agent View just drive the bad clients underground?

Locutus | | Permalink

It's my professional job to calculate my clients' taxes, tell them when to pay them and warn them of the consequences of not paying. However I can't MAKE my clients pay their taxes. My only sanction is to disengage them, which I sometimes do if I think they are just toouch trouble.

Agent view would make me more likely to want to disengage sooner. I would also be VERY reluctant to take on a client with tax arrears. Probably other agents would also feel the same.

The result would be that these "challenging" clients struggle to find an agent - resulting in them being driven underground. That doesn't help either the tax"payer" or HMRC.

The unrepresentable

Stalytax | | Permalink

I can see a logic in HMRC taking a dim view if many of my clients persistently miss filing deadlines, as maybe I'm part of the problem, but no way am I carrying the can for the perennial poor payers.  

The ones who get way behind with payments to HMRC are probably a thorn in my side as well, as they are bound to be the ones I have to chase for money, too.

As has been said above, suddenly we will all get very picky about who we take on / retain, and yes, it seems damn nigh impossible to get people I haven't seen for years removed from my online client list, so I'm stuck with their reputation even when they've gone AWOL. At least, under the current system, the persistently chaotic clients are still submitting returns, for HMRC to chase payment from, good luck with that when they no longer have the likes of us to badger them to get their figures in on time. 

 

 

We dont act for...

Homeworker | | Permalink

all of our "clients" either squay, but tend to leave them on the books in case they come back in the future, as it saves having to sign up again.

We also have a small number (no more than half a dozen) who are behind with their tax returns.  I keep nagging them but don't want to write them off completely as we should be in a better position to get them up to date than a new agent.  However, if this is going to reflect badly on our practice we will have no choice but to resign.

I did ask ATT about this scenario but had no response.

Oh, and why...

Homeworker | | Permalink

can't I talk to HMRC to correct a client's PAYE code when I signed up online in the middle of August and can view his SA record.   They said I had to wait until the  middle of September before the PAYE record could be updated!!  Meanwhile he is not paying enough tax.