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AIA

Will the Agent Strategy come to fruition?

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20th Jan 2014
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In recent years you may have struggled to communicate with HMRC on behalf of your clients, via the myriad of helplines and online services which, were not exactly designed with an agent relationship in mind, says Diana Bruce.

So you would be forgiven for doubting the suggestion that HMRC is working hard to improve and develop services that look to place the agent firmly within the communication and submission processes that the modern business and tax world requires.

Let us take a look then at what has been happening with HMRC’s ‘strategy’ and ultimately with the development of services for agents and ask where they are now with their plans to help the agent community?

Background

HMRC has long acknowledged that tax agents play a vital role in the delivery of the tax system and that they provide invaluable support to taxpayers to help them comply with their tax obligations. To improve how HMRC interacts with tax agents and to ensure their clients' returns and claims are correct when submitted, review work started back in April 2009 with a consultation to consider how this could happen. 

It took the National Audit Office however to highlight in its report ‘HMRC: Engaging with tax agents’, that much could be done by HMRC to improve the way in which they actually worked with tax agents. From this, a formal steering group - the Joint Tax Agent Strategy Steering Group (JTASS) which included representatives from the main professional bodies and senior HMRC managers, was set up to steer development of the strategy and to make decisions.

In May 2011 further consultation took place, ‘Establishing the future relationship between the tax agent community and HMRC’ which sought views on HMRC’s proposals for:

  • the secure enrolment of tax agents to differentiate between those in business and those in the voluntary sector, or who act on behalf of friends and family
  • the ability for agents to self serve basic transactions on behalf of their clients without HMRC involvement
  • the creation of an 'agent view' to bring together information about agents and their clients and to enable HMRC to provide support and target communications where needed
  • maintaining and improving standards for the minority of agents whose performance falls short of what might reasonably be expected

HMRC’s formal response to the consultation was published in December 2011 and in general agents supported HMRC's proposals for enrolment and welcomed the ability to self serve. Questions were asked as to how enrolment would work in a multi-office/multi-location firm, and some wondered about the robustness of HMRC systems and the security needed to enable agents to self serve. Concern was expressed that the ‘agent view’ was a step towards regulation 'by the back door' and many considered that professional body membership and commitment to CPD were an indication of firms wanting to get things right.

A large number of responses were about formal qualifications. Some strong views were expressed, with many agents saying that HMRC should look to accommodate those who are 'qualified by experience' as well as those with formal qualifications. There was overwhelming support for independent oversight and safeguards for any sanctions that HMRC might seek to impose if agents were considered to be acting unprofessionally.

Since formal consultation, a lot of work has been ongoing behind the scenes with the JTASSG. There are also two further groups that meet to consult with HMRC on the subject of agent strategy - the Agent Engagement Group and the Agent Strategy Group. The latter was set up in January 2013 to provide a platform to take the views of a broad range of agent groups not represented on JTASSG.

Further consultation had been planned for summer 2013 to ask for views on the next steps for the agent strategy; however HMRC decided that sufficient progress could be made without the need at that stage for another formal consultation. Furthermore, and importantly, the Government Digital Strategy (GDS) was beginning to make its presence felt.

What of the future with Government Digital Strategy?

The agent strategy has always looked to transform the relationship between agents and HMRC but the GDS has brought with it a different timetable and a very different way of working to develop new digital services. With GDS we can expect to see the delivery of a range of cross government services. For HMRC this will initially see the introduction of:

  • Agent Online Self Serve – a digital service which will enable an agent to register securely and effectively and deal with HMRC on a range of taxes
  • Your Tax Account - formerly known as Tax for My Business, aimed at the customer to provide online filing and payment services
  • Pay As You Earn (PAYE) Online
  • Self Assessment (SA) Online

For the agent however there are key components to the agent programme, which it is hoped will be introduced by 2015:

  • developing a new digital agents’ registration service - formerly referred to as Unique Agent Reference
  • developing ‘new online services for agents’Agent Online Self Serve (AOSS)
  • creating an ‘agent view’ or as it is now to be referred to as Agent and Client Statistics (A&CS)

Identity assurance

IDA is a cross government programme which will enable those of us who wish to access government services using a digital route to register our identity online in a safe and secure environment. This process will start with individual users and will then be broadened with an authority management service that will allow users to act on behalf of other entities. This ‘service’ should allow agents to access government digital services on behalf of their clients.

It is widely predicted that IDA will replace the current Government Gateway (GG) and while details are a long way from being finalised we are told that existing GG logins will not be switched off until the new systems are ‘firmly bedded down’.

Agent Online Self Serve and IDA

The current system of authorisation for tax agents and their clients is out of date and also involves a range of different application processes, for example separate Agent Codes for SA and CT which can result in a single agent firm having multiple codes and references. The introduction of a single process to replace the various current processes will make registering to act as an agent much faster and easier. 

The very real threat of cyber crime along with the IDA programme has driven HMRC’s thoughts and plans away from their original line, which was to create a Unique Agent Reference for each agent along with the ability for certain agents to ‘self-authorise’ their clients. The authority management system will ensure a greater level of protection against criminal attack. Details have yet to be established as to how this will work but the AOSS project team continue to work with HMRC to ensure that the needs of the complex agent structure are fully understood.

User testing

User testing started last year and both the GDS and HMRC received some useful feedback on the early screens. They will continue the build-and-test approach to ensure they design a new system which works well for both agents and HMRC.

At present the testing of small pieces of software along with the testing of concepts is being carried out and volunteers continue to be critical to the long term success of the design and delivery of all digital services being delivered under GDS. Agents will have further opportunity to be involved with the development of all digital services as well, with the development of AOSS.

HMRC IS exploring options for a new electronic channel on the dashboard to allow a taxpayer or agent to send a request to HMRC to inform them that they want to set-off an overpayment on one tax against a liability arising on another. A simpler authorisation process will be introduced for those acting in an unpaid capacity for friends and family to make it easier for them to obtain assistance from HMRC.

Agent and Client Statistics (A&CS)

HMRC's ‘agent view', now known as ‘Agent and Client Statistics' (A&CS), will bring together information held on HMRC systems about agents and their clients' filing, payment or compliance history. HMRC will use the information to target support at agents that need it to help their clients comply and it will also assist HMRC to identify and share good agent practice. The majority of agents with well managed practices won't be affected, as their clients' compliance is likely to fall within the range HMRC would expect.

Although the A&CS is an important part of the agent strategy, it is only one strand of the work. Initial data captured will be used for the purposes of small pilot tests whose filing of clients’ returns and clients’ payment of tax by the due date are outside the ‘norm’. There are no plans to use the material for any other purposes and the tests will help to establish whether or not client filing and payment behaviour is an indicator of agent performance.

HMRC IS aware that agents have concerns that poor client filing, payment or compliance data will automatically lead them to conclude that they are a ‘poor’ agent. That is not the case, HMRC will not make superficial judgements and data outside of the norm will not necessarily reflect badly on an agent. They acknowledge that many agents help clients with poor tax histories back into full compliance and will therefore ensure that this is given proper credit in the analysis of data. HMRC has also confirmed that it has no current plans to regulate the tax agent profession.

Other digital services in the pipeline

HMRC will continue testing developments for agents with agent firms of all sizes so that they can be sure that any new systems and processes will work for all. They do need to establish and test the process for transition, in particular the simple transfer of clients across to the new system (when the time comes).

Pilots will continue to test A&CS with the aim of identifying what ‘good looks like’ and how the best agents work. Part of this work will include testing how best to manage compliance risk, both before and after tax returns have been submitted, and how HMRC can work with agents to lower these risks.

HMRC will continue to work with GDS and other colleagues to develop their ‘digital’ vision for the future which may take the form of a consultation at a later date. Work will also continue with the various agent representatives as work on all the above areas progresses and HMRC will consult on the pilots and any changes proposed at the various agent/HMRC consultative groups.

Clean data

HMRC continues to ask agents to make sure their client lists are up to date and accurate along with ensuring that current authorisations via 64-8 are also up to date and accurate as this will be critical for the transition to the new services. HMRC continues to provide assurances that it will publish information about what agents will need to do to well before the changes are introduced. Whatever that guidance will contain you can be assured that the requirement for agents to have clean data and up to date records will be a key theme.

Blog

A new blog has recently been launched by HMRC as an extra channel to get agents and their representatives involved in the ongoing development of the agent strategy. The blog provides a new channel to communicate about:

  • joint HMRC and agent consultative meetings
  • the rollout of HMRC's Tax Agent Strategy
  • improvements to service delivery through joint working
  • the services available for agents

Get involved and use the blog to voice your thoughts, opinions and concerns. Its aim is to be a really useful tool to keep up-to-date as the digital services for agents develop in the coming months.

As for timeline?

Developing and testing of prototypes are ongoing and are predicted to be completed during 2014 at which point we should hope to see, or at least hear about, a small scale (beta) service for selected agents by the autumn of 2014. By spring 2015 this small scale test should start to expand to include greater volumes and complexities, with complete agent migration predicted to be complete, along with the delivery of new digital services during 2015/16.

Exciting times ahead indeed, and so all that remains is to wish all agents the greatest of success in continuing to adapt processes and systems, while providing the high quality services that clients demand, regardless as to the HMRC Tax Agent Strategy.

Further reading:

Diana Bruce is the senior policy liaison officer for the Chartered Institute of Payroll Professionals (CIPP).

Replies (3)

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Jennifer Adams
By Jennifer Adams
20th Jan 2014 21:12

Anyone notice this in the text?
HMRC IS aware that agents have concerns that poor client filing, payment or compliance data will automatically lead them to conclude that they are a ‘poor’ agent. That is not the case, HMRC will not make superficial judgements and data outside of the norm will not necessarily reflect badly on an agent.  Note the words... 'not necessarily'.     

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ghm
By TaxTeddy
21st Jan 2014 18:20

Fair enough?

That seems OK - if your firm's data looks odd, HMRC would be foolish to ignore that - but, as they say, it doesn't necessarily mean a problem.

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avatar
By johnjenkins
22nd Jan 2014 14:13

HMRC are not

actively seeking to regulate the agent profession.............yer right.

Agent strategy should have been implemented 2 years ago and then gradually expanded when confidence is achieved. There is no reason not to use the government gateway - all agents info is there.

So what is the stumbling block. HMRC's need to have control over the agent and to be able to choose which ones they want. It really is that simple.

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