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HMRC Agent Strategy: initial reactions

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3rd Jun 2011
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Rebecca Benneyworth described it as the biggest thing to hit the profession in a generation, and already the HMRC Agent Strategy consultation launched on Tuesday (31 May) is causing waves.

Already AccountingWEB’s introductory article has attracted nearly 100 comments - most of them in a spirit of constructive engagement - and the debate has moved on to consider some of the proposals in more detail in a new HMRC Agent Strategy discussion group.

“The best hope we have of making the reforms work is to respond wholeheartedly to this consultation, by telling HMRC firmly what won't work, and pushing it towards acknowledging where it can improve its own service levels,” commented AccountingWEB.co.uk’s tax editor, who has been liaising closely with professional bodies and HMRC itself around the consultation.

As HMRC explains it, the new strategy will be based on two main strands:

  • Self-serve - providing an array of online services, for which professional tax agents will need to enrol to protect against fraud and set them apart from those who provide informal help for friends and family. This online transaction system will allow HMRC to place more control in the hands of enrolled agents, it said.
  • Agent engagement - HMRC will build up an online “agent view” that compiles details of the agent and their client portfolio. In HMRC-speak, this will help the tax department “target and tailor” support services and, where necessary, identify poor practice.

Professional bodies
All of the main professional bodies were consulted before publication of the Agent Strategy document, and Anthony Thomas of the CIOT got in some of his retailiation first during his inaugural speech on 19 May, when he warned about the deterioration of trust between advisers and HMRC.

The CIOT, ICAS and the ICAEW Tax Faculty gave a qualified welcome to the strategy document, But Thomas reiterated two “red lines” laid out in his 26 May speech beyond which his institute would not budge.

  • Anthony Thomas, CIOT: “Any attempt to introduce obligations between tax agents and HMRC which impinge on agents’ relationships with their clients would be completely unacceptable. I welcome HMRC’s statement in the consultation paper that they are not seeking to change this. We will hold them to this… Secondly, any system of enrolment, and inevitably disenrolment, of tax agents must be overseen by an independent body. While we are very much with HMRC on wanting to get the highest standards among tax professionals, HMRC cannot be permitted to be prosecutor, judge, jury and executioner when someone’s livelihood is potentially at stake.”
  • Derek Allen, Director Tax at ICAS:  “This is an opportunity to produce significant improvements by cutting HMRC errors, reducing tax compliance costs and improving the quality of information held by HMRC.  Allowing agents to action some back office tasks is a sensible step that should benefit all taxpayers by taking pressure off HMRC, cutting volumes of mail and reducing HMRC’s workload… However, past experience shows that projects such as this are often one-sided.  HMRC tends to look carefully at their own requirements but doesn’t appreciate that firms of agents will have differing circumstances regarding security and access arrangements.  The new system must be designed carefully to meet the needs of users.”
  • ICAEW Tax Faculty: “The consultation acknowledges the current shortfall in HMRC’s service standards, and the frustrations that this creates for agents. Any [step towards enrolment and agent monitoring] will require a clear understanding of what is being measured and why and will also require transparency, mutually agreed standards (not imposed standards) and robust safeguards. HMRC says explicitly that it is not seeking to take on a regulatory role and that it ‘believes that structured self governance of the tax agent market is the correct model for a future relationship’. The Tax Faculty shares the view that self governance via the professional bodies is the correct model.”

Points raised by AccountingWEB members

Role of unqualified agents within the new regime
Suepg: “As an NQ with 17 years at a Chartered firm , latterly as a Senior Tax Manager, and subsequently seven years in practice on my own, with around 150 clients, I would welcome the opportunity to be assessed and recognised as 'Qualified by Experience'... While there may be others who view such monitoring, auditing or inspecting as an invasion, I would be the first to volunteer for any such scheme, and strongly believe it would only benefit those of us in a similar position to myself.

Anthony Thomas:  “The CIOT recognises that there is a possible human rights issue around denying access to those already in practice but believes that it is in the interests of taxpayers and the tax authorities that all tax agents operate to the highest professional standards. This may mean full access is only given to qualified professionals.”

Rebecca Benneyworth: “Expecting someone who has been in practice for 30 years to prove their competence would seem beyond the pale… It seems that grandfathering existing agents would be the only way to go... If we genuinely accept that there is both competence and lack of it on both sides, then we have no choice but to treat everyone the same at this point. I, too have an uncomfortable feeling that there could be a little of the "pull up the gang plank, I'm all right Jack" in some of the responses to the consultation on this area… Those who have passed examinations and been regulated by their body for years want to be recognised for the time and effort we put into obtaining our qualification, but it is difficult to do this without the detriment of some of the existing members of our profession, however they got to be here.”

Self-service facilities

Stuart Manning: “On the face of it it would seem to solve a lot of the frustrations of dealing with HMRC as at present constituted.   However my next thought was to consider what I would be getting into… I would like to see a lot more detailed meat on the proposals as I believe that we might find HMRC’s software systems as user friendly as the proverbial cornered rat.”

Pauljohnstone: “Interaction between the PAYE coding notices and self assessment - Why is this dealt with as two different schemes which apparently don’t talk to each other and affect a large chunk of the Self-Assessed population? The fix would be to show amounts in due in boxes 7 and 8 on Tax Calculation Summary on HMRC website.”

Marion Hayes (on amending coding notices and managing end of year reconciliation for those outside Self Assessment): “I assume that we could expand existing software to file a non-statutory calculation using NI number as reference to create these calculations, giving HMRC a set period to respond. Yes please… My concerns would be our exposure to risk really. We would act in good faith on information received, but would we be at fault if we failed to lodge a calculation which later proved necessary... where does fault lie if there is an error or unforseen complication?”

Feel free to add your comments here and in the HMRC Agent Strategy discussion group, where points made on the different consultation questions will be compiled and submitted to HMRC.

Vote in our new poll – “Do you trust HMRC?

Replies (1)

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By ThornyIssues
10th Jun 2011 12:46

Why!!!

I fail to understand why anyone with truely professional qualifications and good practice experience would even consider for one nanosecond being assessed by a bunch of untrusted incompetents!!!

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