One-off opinions and contributions from accountancy's great and good.
HMRC & its impact on the profession
HMRC’s disclosure campaigns have been highly successful at generating new revenues, but what effect are they having on the profession? asks Robert James Partnership’s Anne Eager.
A quick tally up of the figures published in their August campaign update suggests they have netted £495bn with an additional £101m expected to follow.
HMRC has been tasked with collecting more revenue and it’s good that these schemes are working, but there are other sources of income for the Treasury that HMRC is pursuing which could have a costly knock on effect for advisers. A good example of this is the introduction of the business record keeping check with its emphasis on the requirement to keep records of an adequate standard.
Although the responsibility is on a business to comply, as advisers, we will need to spend a greater amount of time feeding back and educating clients to improve the way they do things. If we don’t point out their deficiencies and the potential risks involved there is a school of thought that clients may have a case for taking action against us; at the very least if HMRC identify an issue and attempt to charge a penalty, many clients will query why this is the first they have heard of the problem. However all this takes time, and may not be billable. Time is how we make our money and with client budgets already so stretched to cover existing fees, this makes the situation worse.
Potentially it could create a divide within the profession between the firms who go the extra mile to proactively support and educate clients about compliance and the ones who do what is required for their fee, and no more. Certain campaigns are targeting smaller businesses and start ups – which of course are those most likely to be at risk of non-compliance. These are the clients who do not have resources (financial or personnel) to look after these matters and who therefore rely on their accountants for such support. And let’s be honest, these are the clients least able to pay fees which are commensurate with the level of support required.
As someone who specialises in enquiries, I can see the fallout fast approaching. We are still in the early stages of the effects of HMRC wielding their new powers and applying higher penalties. In the light of various recent consultations into topics such as the record keeping requirements and more recently HMRC’s ‘Relationship with the Tax Agent Community’ I can’t help but feel that we have a long and rocky road ahead.
Anne Eager is enquiries manager at Surrey accountants Robert James Partnership (RJP).