Rebecca Benneyworth sets the scene for HMRC's latest consultation around its working with agents strategy. There are a lot of good things being offered, but also some significant points of concern. What do you think about the proposals?
The consultation launched on 31 May 2011 is probably the most important document affecting agents working in tax for the rest of their careers. Entitled “Establishing the future relationship between the Tax Agent community and HMRC” it includes proposals that will transform the way we work and our relationship with the tax authority – which at present might be described as heading for an acrimonious divorce.
Members of AccountingWEB (even recent members) will be familiar with stories of frustration by those trying to execute simple transactions with HMRC on behalf of clients. Unopened post, unanswered telephones, incorrect notices of coding – these are the daily grind of the tax agent. Just getting authority to act seems an almost impossible challenge sometimes.
Well this consultation doesn’t exactly wave a magic wand, but it does look pretty close to it. It offers some radical possible solutions to the litany of complaints – and radical is what is needed in the current state of affairs – but will it work for you?
HMRC is openly acknowledging that service standards sometimes fall short, and that a simpler, more effective solution must be found for agents – one that is not available to the wider taxpayer base, is special to us. The essential proposal in the document is that agents will be able to enrol for access to a special online agent facility. Under this facility, the following would be possible :
- No more waiting for authority; agents would self certify that they hold a signed authority from a client (retaining the signed authority) and start work straight away
- Notices of coding can be amended and generated; for those PAYE clients outside self-assessment, the agent will also control the End of Year reconciliation (P800 procedure)
- A view of all tax payments and liabilities in respect of a single client, covering all taxes in a single view
- Use of online education modules to augment professional training on legislation changes and processes
- Tracking and tracing paper repayment claims and correspondence through the system; and
- Correspondence and returns / forms that are not currently online can be lodged in an electronic work area, shared by the agent and HMRC.
In principle, most agents would not have a problem with the information requested and indeed in respect of some of it there would seem to be a perfectly reasonable basis for the request. But, you may say – is this the thin edge of a very nasty wedge?
For each enrolled agent, HMRC intends to create an “agent view”, bringing together the details of all clients that we act for. The document states that this “will bring together details of them and their client portfolio into a consistent and coherent picture to support communication and engagement”. As part of this agent view HMRC would include “compliance performance of an agent’s clients”. This, it says, “would provide a foundation for HMRC to target technical updates, support services and compliance campaigns to those agents with the most relevant client portfolios”.
One assumes that this means that each agent will have recorded against their firm the number of clients with compliance failures – such as late returns – and even late payment. I am highly suspicious of any attempt to assess my performance as an agent by my clients’ behaviour. The explanation goes on to acknowledge that the vast majority of agents are well qualified, technically able and competent in their role, but warns “The ‘agent view’ will support HMRC in identifying those agents whose total engagement is significantly outside of the average performance for agents with a similar client portfolio.”
So here is the rub – HMRC will assess agent performance using the enrolment information. Is this a short step to regulation by HMRC? Well, not if you read as far as page 28, where you will discover that HMRC believes that structured self-government of the tax agent market is the correct model for a future relationship. The identification of the very few “wrong ‘uns” would contribute to that end, by raising standards overall.
The consultation is open until 16 September. I thoroughly recommend that all of those working as tax agents read it carefully, and make their views known, either through their own professional body or on AccountingWEB. We have launched a discussion group on the consultation which I shall chair, and we’ll be holding a number of special events during the consultation period. I’ll be writing some more in-depth analysis of various aspects of the consultation to get the discussion going, but it is essential that you make your views know – this really will change your life – unless you plan to retire in pretty short order.
AccountingWEB will submit a formal response to the consultation in September - so please give us your views so that we can represent them. Do please also respond to your professional bodies, if you are a member.