To assist agents in directing effort towards the more risky areas of client returns HMRC is developing a series of toolkits for agents to provide guidance on risks to compliance from HMRC's perspective and to set out how agents can reduce the likelihood of mistakes occurring in the returns.

HMRC believes that using the toolkits will help agents to ensure the completeness and accuracy of returns and thus reduce the potential risk of an HMRC enquiry or inspection that could result after an error has been made.

The tax authority has been working with agent representatives, through the Compliance Reform Forum, and with a small group of volunteer agents, to broaden the understanding of the work that agents carry out before submitting returns. The work carried out identified that significant benefits could be gained by agents if they had access to the specific risk factors that HMRC identifies in relation to returns. This enables agents to focus work on areas of common error and gain assurance that the client will be less likely to be subject to a compliance check. Using the risk toolkits will also provide assurance that the agent has exercised reasonable care on behalf of his client – it is also expected that use will eliminate unnecessary work for agents by allowing them to focus on risk areas. Use of the toolkits will be, of course, purely voluntary, but HMRC are hoping that agents will find the toolkits useful, by providing an insight into the areas HMRC would focus on in a compliance check – information that has, in the past, been regarded as “secret”.

The toolkits will include details of the risks that HMRC associate with a particular tax, or an aspect of a tax. This will lead to a list of appropriate checks that might be considered in relation to the risks, and all information will be linked through to the relevant HMRC technical guidance. The toolkits are intended to be used as an online resource.

The first toolkit in the series to be launched is the Capital Gains Tax for trusts toolkit. HMRC intends to develop a series of similar toolkits for agents covering the risks in Marginal Small Company Relief, capital allowances (plant and machinery), Capital Gains Tax (land and property), personal and private expenditure and Inheritance Tax.

During the pre launch period, HMRC are keen for practitioners to test the toolkits, so that they can be refined and developed further before launch to the wider agent community. If you would like to volunteer to test the toolkits, you can contact the development team here. [1]. At AccountingWEB.co.uk we are hoping to test some of the more common toolkits and comment on them. We'll bring more news as the next trial is launched.

HMRC has produced a vodcast [2] jointly with ACCA which explains the background to the toolkits and how they might be of benefit to agents. This can be viewed by non members, and both a transcript and PowerPoint presentation downloaded.