The agent services account: What you need to know

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The agent services account is something that all tax agents need to be familiar with, especially those with clients who will be impacted by the Making Tax Digital initiative. Find out more about it and what you can do to set one up.

What is an agent services account? 

An agent services account allows tax agents to access certain HMRC online services, including the Making Tax Digital VAT and income tax pilots, and also gives agents the ability to communicate with HMRC directly through software.

At present, agents can only use the agent services account for a limited number of new online services from HMRC, namely Making Tax Digital or registering a trust or an estate online. This means that agents should continue to use the government gateway to access services not covered by the agent services account (for example, VAT services for clients who do not fall within the remit of Making Tax Digital for VAT).

Who should create an account? 

Any tax agents working on behalf of clients that are or will be involved in Making Tax Digital should look into creating an agent services account, although an account will also be useful for any agents who would like to register trusts or estates online with HMRC.

Due to the government’s and HMRC’s overall commitment to digitising the UK’s tax system, arguably the need for an agent services account also extends to all tax agents, as the number of online services offered by HMRC is expected to increase in the future.

How to set up an account 

Before setting up an account, you should have a few things to hand, including your government gateway ID and password, as well as your unique tax reference number (UTR) and the postcode that is associated with the UTR.

Once the account has been created, you’ll then be able to link your existing clients from other government gateway IDs to the agent services account. There is also the option to invite new clients to link to your agent services account.

Is there anything else agents should be aware of?

When it comes to security, there has also been some discussion about the role that two-step verification will play. Two-step verification is seen as an additional security measure, where a passcode is sent to a mobile, phone, or even an app. This passcode then needs to be entered in order to access the account.

Currently, two-step verification is not required when creating an agent services account, although HMRC did note in Issue 66 of its Agent Update that the optional use of two-step verification should be available in the near future for firms that wish to make use of it when agents log in to the agent services account.

Even though two-step verification is not currently required when creating or logging into an agent services account, please note that you will have to use two-step verification when you link your Making Tax Digital compatible software to your agent services account.

Aside from security matters, another important feature of the agent services account is that only one agent services account should be in place per firm. This means that only the person responsible for all things tax or administration-related at the agent’s firm should create an account.

Further information about the agent services account can also be found on Gov.uk

Conclusion

Although existing government gateway IDs can still be used to access certain HMRC online services as usual, tax agents should also look at getting an agent services account as soon as possible. While only a limited number of services are available via the account at present, it’s highly likely that this range of services will grow as the UK’s tax system continues to digitise.

What’s more, the agent services account supports Making Tax Digital for VAT. Given the initiative is still on course to roll out in April 2019, firms only have a matter of months to ensure that they are ready to handle their clients’ Making Tax Digital for VAT affairs. Part of this preparation includes having an agent services account in place.

For further information on Making Tax Digital and how the initiative will interact with your existing accounting and taxation software, speak to a member of the Taxfiler team.