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Last chance to avoid the digital handshake for VAT

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Next week is the last opportunity for agents to copy VAT authorisation generated in the Online Agent Authorisation (OAA) service across to the Agents Service Account (ASA). Authorisation for the vast majority of clients will already have been migrated across, but for the handful that remain, agents should copy authorisation over now before the option is removed.

9th Feb 2024
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We knew this was coming. HMRC warned us in Agent Update 111 six months ago, and most agents are already using the ASA to deal with their clients’ VAT affairs. The change is part of HMRC’s long-term plan to migrate all functions to a single point of access, as many of the existing online services for agents are reaching the end of their lifespan.

But meddling with the status quo is bound to ruffle a few feathers.

Embracing change

When I wrote this piece in September, the reaction from AccountingWEB readers was mixed, with some brushing the news off as “a storm in a teacup” and one commenting “no need for a song and dance just do it properly it usually works better that way”.

Others, inevitably, had less appetite for yet more change, with one reader lamenting “I have no clue how a “digital handshake” works. I can just see more pain for me and my clients”.

Most readers shared the good news that all of their VAT authorisations were already copied across, so there was nothing more for them to do.

However, there are still many who prefer to use the old methods, as one commentor pointed out “the reality is many don’t use new methods if the old ones work” and “Looking at some of the comments here it appears obvious there are a few that are not using “digital handshake as default” authorisation”.

When my previous article was written, there was a workaround – agents could still obtain authorisation the old way in the OAA and then copy it across to the ASA. From 16 February 2024, for VAT dealings at least, entering the brave new world of the digital handshake is no longer avoidable. HMRC states: “If you use VAT for agents in OAA you must stop doing so as soon as possible.”

Whose hand do I need to shake?

Where clients are already linked to the ASA, as authorisation has been copied across either manually or automatically when the agent’s ASA was created, or the ASA route was used to authorise when the client was set up, no further action is needed. Any clients for whom authorisation was obtained in the old OAA and has not been copied across - and any new clients - will need to be authorised in the ASA via a digital handshake from 16 February.

To complete the digital handshake, the client must have a Government Gateway ID. The agent generates a unique web link in the ASA and sends it to the client, who must complete the authorisation within 21 days. This will give the agent access to digital, phone and written services for VAT on the client’s behalf.

Full instructions for the digital handshake process can be found on GOV.UK.

It will no longer be possible to obtain authorisation to represent clients for VAT using the old-school "code in the post" method in the OAA and copy this authorisation over to the ASA. Any authorisation codes generated in the OAA before 16 February must be used before 18 March, when they will cease to work.

There is a process in place to support digitally excluded customers who are unable to accept the digital handshake themselves. The customer can contact the relevant helpline who will make a referral to a specialised team who will then contact the customer, confirm their identity, go through the consent wording and authorise the agent on their behalf. Details of how to access that assistance can be found on GOV.UK.

The same digital authorisation process will apply to overseas, as well as UK-based, VAT agents. However, the following services will remain on the OAA:

  • VAT EU refunds;
  • notification of vehicle arrivals;
  • VAT One Stop Shop; and
  • other legacy account services which have not migrated to the agent services account.

Concerns raised

Emma Rawson from the Association of Tax Technicians (ATT) said: “We support HMRC’s attempt to rationalise and streamline the various different agent authorisation methods available. However, members have reported some concerns about this change.

“In particular, the ASA route requires clients to complete a ‘digital handshake’ – something which can prove tricky, especially if a client is not comfortable with computers and digital processes. With this change, it seems like the digitally excluded or digitally challenged will face more hurdles than before if they wish to authorise an agent to file online for them.”

Agents who have not yet copied authorisation from the OAA to the ASA for VAT purposes are urged to do so before 16 February to avoid the extra admin headache for them and their clients.

Replies (4)

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By e
12th Feb 2024 09:16

I am wondering if a 64-8 would still be a way out of this...
Oh, I see there is this comment on it, so the answer is a No.
"Please note if you have signed up for Making Tax Digital for VAT, this form cannot be used to authorise an agent to manage your Making Tax Digital services."

Thanks (0)
Replying to e:
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By rmillaree
12th Feb 2024 15:05

the 64-8 i would expect would still allow you to telephone hmrc and speak to them ref - i am presuming it will not allow you to be able to file.

HMRC ignore completely the large segment who may not be properley digitally excluded as such but do not feel comfotable with setting up important stuff like this online for obvious reasons - hmrc simply ignore this hue chunk of the population.

we are where we are though and all agents not jumping in at the deep end encouraging clients to have all the relvant gateways and similar (eg irv) and probably only mkaing life hard for themselves - IF we say client could be guided with a reasonable prod. For those not wanting to - well its up to them to have the torture of ringing the digitally excluded list and sorting direct with hmrc.

I must say it if ffin poor form hmrc going out the way not to provide simple solution here - they ignore the fact that they could most easily of had a solution that does not involve this specialist team behind teh scenes and are makinhg no effort to replicate the simple way the old system worked - practicably speaking if address in unchanged on vat records since registration (or past 3 years) i see the old pincode in the post system as being the one least likely to subject to fraud - much easier to ring up with someones details collated from dodgy sources than get access to business address to take code.

Thanks (1)
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By MartinLevin
13th Feb 2024 10:23

Thank you for this. Last week, when I received an email from HMRC, I could not understand it.
I forwarded it on to my technical branch (I am still waiting).
As a "belt-and-braces" task, as one of my clients is "digitally excluded", I rang HMRC yesterday (12.02.24), waited 30 minutes, and was talked through for 40 minutes by the helpful person at the other end.
But, what a palavar. Is this how HMRC thinks how they can use George Orwell's "Newspeak"?

Thanks (1)
avatar
By MartinLevin
13th Feb 2024 10:23

Thank you for this. Last week, when I received an email from HMRC, I could not understand it.
I forwarded it on to my technical branch (I am still waiting).
As a "belt-and-braces" task, as one of my clients is "digitally excluded", I rang HMRC yesterday (12.02.24), waited 30 minutes, and was talked through for 40 minutes by the helpful person at the other end.
But, what a palavar. Is this how HMRC thinks how they can use George Orwell's "Newspeak"?

Thanks (0)
avatar
By MartinLevin
13th Feb 2024 10:23

Thank you for this. Last week, when I received an email from HMRC, I could not understand it.
I forwarded it on to my technical branch (I am still waiting).
As a "belt-and-braces" task, as one of my clients is "digitally excluded", I rang HMRC yesterday (12.02.24), waited 30 minutes, and was talked through for 40 minutes by the helpful person at the other end.
But, what a palavar. Is this how HMRC thinks how they can use George Orwell's "Newspeak"?

Thanks (0)