Since Making Tax Digital (MTD) for VAT was extended to all VAT-registered businesses on 1 April 2022, agents have been required to use their agent service account (ASA) to manage their clients' VAT filings. This is a separate system from the more familiar online services for agents account (OSAA) which agents still use to manage other taxes, including corporation tax, on behalf of clients.
Migration to the ASA for VAT
Any parent who has committed the cardinal sin of washing their offspring's cherished favourite teddy – indulge me – can attest that humans are inherently resistant to change, particularly where a new system (clean teddy) is teasingly similar yet frustratingly not quite the same as the (familiar but grubby) one we're used to. And much less so where there appears to be very little benefit to the change.
Feedback from agents suggests that the ASA is less user-friendly than the OSAA and many are not bothering with it at all, opting instead to log on to clients' personal tax account (PTA) as reported in AccountingWEB earlier this year.
However, one way to slightly ease the administrative burden of transitioning clients from one platform to another is that, until now, agents have been able to copy existing authorisation for VAT from the OSAA to the ASA without involving the client. This function is set to be withdrawn from next month, as communicated to agents via edition 111 of HMRC's Agent Update.
New digital handshake
From October, agents will need to obtain new VAT authorisation in their ASA for existing clients, even if they are already authorised to deal with the client's VAT filings in their OSAA. They will do this using a 'digital handshake' – the agent generates a link in the ASA that is sent to the client to authorise, giving the agent access to digital, phone and written services for VAT on their behalf.
Any new clients must be set up for VAT on the ASA and authorisation requested in the same way.
Clients who are digitally excluded and unable to accept the digital handshake themselves can contact the relevant HMRC helpline who will make a referral to a specialised team. A member of this team will then contact the customer, confirm their identity, go through the consent wording and authorise the agent on their behalf. The agent needs to have set the client up on their ASA and generated the authorisation link in advance of this call.
An HMRC spokesperson said: “This legacy process is being removed as we now have digital processes in place to make authorisations more secure.
“We have communicated this to our agent community through various channels, including the professional bodies representing them.”
MTD ITSA is safe, for now…
Self assessment is the latest tax to be migrated from the OSAA to the ASA, in preparation for the launch of MTD for Income Tax Self Assessment (MTD ITSA), with HMRC stating on the GOV.UK website:
"From 2 August 2023, you must have an agent services account if you are a tax agent and you want to:
- submit Income Tax or PAYE repayment claims on behalf of others
- charge a fee for doing this".
The good news is that (for now at least) the option to copy authorisation for income tax across from the OSAA to the ASA will remain in place. But presumably, its days are numbered too.
Our advice
Sensible agents who want to get ahead of this change and save themselves and their clients an HMRC-induced headache will be furiously copying across as many VAT (and probably income tax to be on the safe side) authorisations as possible over the coming weeks before the option is withdrawn.
Conclusion
In a period of flux and unpredictability as HMRC ploughs on with its increasingly delayed and much-maligned MTD project, it seems ludicrous to remove one of the more sensible, practical abilities of the system. Something as simple as being able to transfer authorisation from the old system to the new is perhaps a step too far in the right direction. Time to take two back.
*12 September 2023: This article was amended to clarify the date MTD for VAT came into force for all VAT-registered businesses.
Replies (64)
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I give thanks daily that I no longer have to deal with this nonsense.
Not two steps back, more like ten.
Thanks (3)Thanks for the article. Will copying clients over from the old OSAA to the new ASA remove the copied clients from the OSAA? Or do they remain on both?
Thanks (2)I would also like to know this
Thanks (2)As far as I understand it they will remain on the OSAA as other taxes will continue to be managed via the old system. It is only VAT authorisation that needs to migrate currently.
Thanks (2)Why on earth can't HMRC just include their "super special extra security full bells and whistles" wording on the 64/8 so we can get on with our jobs?
Thanks (10)Making Tax Digital for VAT most definitely didn't come in April 2022. May be having to change to using an ASA did. Please check your facts.
Thanks (4)Thanks Catherine, I've tweaked the wording to make it clearer.
Thanks (2)Thanks Amy.
Thanks (1)I am struggling to follow this article.
Do I understand this as from October, the old "letter in the post" method is gone for VAT?
And all we have is the horrible appointment through the clients (often non-existent) digital account?
But for all existing clients, no action.
Currently new clients using the "letter in the post" method, seem to come over to the MTD log in without any input my end. Or I think they do....
Thanks (2)According to HMRC, paper authorisation form 64-8 gives access by phone or post but not digital access for VAT (and therefore not MTD):
https://www.gov.uk/government/publications/tax-agents-and-advisers-autho...
Clients with existing authorisation on the OSAA will need to be copied across to the ASA this month, or new authorisation will be needed via the 'digital handshake'.
Thanks (3)I file online by my Gateway which redirects me to the ASA and then I file the VAT for exempt MTD clients. I don't understand what I have to do now.
Thanks (4)for any clients showing up in new asa no need to worry - i am presuming all your exempt clients are showing up in ASA - so nowt to do for them.
All that is changing is that if you use old gateway to authorise clients via code in the post that will stop working as the authorisations will not flow over to the ASA.
In future you will need to do digital handshake via ASA (business needs access to gateway with vat)
or go down digitally excluded route as advised
I do have one question here for others - clients can authorise us for vat via their gateway by "adding agent" - does anyone know if that authorisation goes to old agent account or new ASA account? . If that goes to old account i suspect that authorisation method will no longer work (even if currently they do automaticlaly flow through ) - hopefully its directly to ASA sop that option will still be available ? If anyone can advise cheers.
Ridiculous beyond belief that there is not an option to request pincode be sent out "old skool" in post - via digital handshake type request. That common sense option that would avoid all the issues that exist witn sepcialist teams being needed and peps being unable to sort digitally as gateway was set up by soem random person 4 years ago with no details of what gateway details are.
Thanks (3)Thanks, that how I assumed it would be, but I am afraid I really couldn't follow the article.
Pins in the post work (most of the time)
I cant see how its cheaper to now request thousands of phone calls from people who don't have a digital tax account. I do try and get all new clients to have one, but lots of clients dont as they have a tax agent to do that sort of rubbish for them.
Thanks (2)I cant see how its cheaper to now request thousands of phone calls from people who don't have a digital tax account.
Exactly the fact they already have existing pincode facility in place is all the more galling. I understand requesting those that can do gateweays should do gateways and avoid post pincodes - but post for digitally excluded and those that cant get sense out of hmrc ref resetting gateways has to be better than specific team hidden away via phone imho.
Thanks (0)My clients come up in the old gateway with the same data - I then go to file - I then am directed to the new agents services account credential and enter the new ID - then I enter the VAT number - a screen comes up to file in the old way - part of the business tax account. What puzzles me now is what happens if a new accountant is appointed - do they use the digital handshake ?
Thanks (0)I am retiring. I just can't stand anymore of this nonsense.
I have a few VAT clients left and HMRC can do what the hell they like .
What a shambolic mess they are making of everything - I just HATE them and I don't say that lightly.
Thanks (23)..and the powers that be wonder why 'old uns' are leaving the workforce in droves.
Thanks (9)I had HMRC in and told them MTD wouldn't work and now look four years later.
Apparently I am old and out of touch - not into modern thinking - I need to go to night school to learn about computers...it's not me that needs to see a Doctor Blanche lol
Thanks (3)You mean the ones who know how to do the job and how to get the job done.
Thanks (4)Does anyone in HMRC ever read our comments; they certainly don't seem to take note, more's the pity!.. I gave those lunatics the soldier's farewell a couple of years ago as it was obvious that matters were only going to get worse. Shame that the OTS ended up a toothless creature.
Thanks (2)Funny you say that as no one on AWEB takes note. Having said that HMRC totally agreed why all my clients should not require to be signed up for MTD including my own business. The chap from HMRC (my age) didn't agree with the process and so the younger ones where left with the decisions. The chap has now (like me) taken early retirement. The MTD fiasco continues.....
Thanks (0)I wish my application(s) for exemption had ended up in your chap's lap. Might have had a different result.
Thanks (0)I devised a support tool that had HMRC not agreed with then they would acknowledge that they agreed the following:
Record keeping would be worse with high degree of error.
Client would not be able to complete VAT without a third party input.
Costs would be higher than at present.
The three items mentioned above are all against the aims of MTD so how could they refuse.
Thanks (1)So when we first set up our ASA we copied all clients across and since then any new clients go via the send a link method.
Will we now need to send the digital link to all the original clients who were copied across (circa 150) or because they were copied across originally they will be ok?
Thanks (0)Yes, I am unsure on the same point too PennyPincher... can the author please clarify?
Thanks (0)Yes, my question also. I am assuming that if I can see the VAT client in my ASA and appear to have full functionality, that everything is OK.
I have one annual accounting scheme client who was copied across en masse when I set up my ASA, but I am just about to submit their first MTD return (old portal previously). I think everything is OK, but I would like to be sure.
Thanks (0)Any clients already authorised in the ASA are safe. This should only affect a small handful of clients, such as those in the annual accounting scheme, for whom authorisation has not yet been migrated to the ASA.
Thanks (0)Amy, my one annual accounting scheme client appears in my ASA and I appear to have full functionality.
They were copied across (along with all my other SA and VAT clients) when I set up my ASA a couple of years ago.
I continued to file their returns through the old portal because an MTD exemption appeal had been lodged. HMRC have now closed that door.
I will shortly file the client's first return via MTD but I am concerned because you have made several comments to the effect that AAS users are one of a small number of groups affected. But why? I can see my client in my ASA (VAT area) and things appear to function, so why might there be a problem?
Thanks (0)Hi Geoff,
The issue will only occur if clients have not yet been copied across to the ASA. For the majority of clients, quarterly reporting for MTD VAT will already have started, so they will already have been migrated. Therefore the only example I can think of where clients may still need to be copied across is those who have not yet reported under MTD, ie AAS users. If yours have already been copied across and are showing in your ASA there should be no issue.
Thanks (2)Which category of clients does this apply to?
Surely any clients for whom we have to file MTD VAT returns are already on our ASA.
So which (active) ones are on the old account? What am I missing and why are you worrying everyone?
Thanks (15)I was thinking exactly the same thing - the article could have been written in a couple of sentences - the old system is closing down, start using the new one (like you should have been for a few years now), no need for a song and dance just do it properly it usually works better that way.
Thanks (1)This is what I am wondering? If we already file under MTD, are those clients already ok ?
I have been using the old system as it is much easier and then they seem to appear in the new agent log in- just checking whether I need to do anything else?
What a pain.
Thanks (0)Yes, any clients already filed under MTD are ok. This should only affect a small handful of clients such as those in the annual accounting scheme.
Thanks (1)So time to sell up? Move up north where it's cheaper and live of the interest. Fed up with HMRC, fed up with clients, fed up with the whole shabang.
Tried to get a client authorised through the agent services. He's been emailed the link but he can't find his log in details so now his vat is overdue as he's a new client.Why can't be sent a code in the post like the other taxes. So sick of all this. And then it's keeping track of it all, it's worse than trying to remember every Tory screw up.
Thanks (6)I am confused by this article. In my ASA I have access to my clients' VAT accounts (If I enter their VAT number) so, do I need to re authorise all of those clients? Or, is it just any VAT clients that are in the old account (that I still use to access every other tax) that are not in the ASA?
Surely if we can submit VAT returns etc already for the client then we are already sorted?
Thanks (1)Yes exactly. If clients are already migrated to the ASA and you have submitted under MTD VAT there is nothing further to do. This should only affect a small number of clients, such as those in the annual accounting scheme.
Thanks (1)Do I need to do anything with my existing clients? They were originally on the OSAA (never knew it was called that!) and seemed to automatically populate the ASA years ago when we started doing MTDfor VAT.
Is the article saying that what is there already will stay but any new clients will need to be registered straight into the ASA?
I cant think of a situation where existing clients would be in OSAA but not ASA; is there one?
Thanks (0)If your existing clients are already set up and authorised in the ASA there is nothing to worry about. This should only impact a small handful of clients such as those in the annual accounting scheme.
Thanks (1)Amy,
You appear to have caused something of a storm in a teacup with this article.
Inadvisable, when most agents are one step away from Michael Douglas in 'Falling Down'.
Are you on HMRC's payroll, or something?
Thanks (3)Nick i think your comments are wide of the mark here.
Many agents still use the old skool approach to authorising clients - the favt that wont work going forward and that those agents need to up their game is vital to highlight. It doesnt matter to those that have already adopted but the reality is many dont use new methods if the old ones work and its vital they be slapped in the face (as amy has been done). Looking at some of the comments here it appears obvious there are few that are not using "digital handshake as default" authorisation.
I would agree that article perhaps could have ben clearer - but hmrc dont really communicate how stuff works in simple form so it aint easy trying to collate articles if you arent directly at the coalface.
Thanks (4)I'm confused about this. Is it "Self-assessment" that is safe, not needing anything doing, unless we want to make repayment claims for non-SA clients. What if a repayment was claimed on the SATR to be sent by cheque, and so ignored by HMRC, and we need to claim that repayment online.
I thought ASA for IT/SA was only for those 9 people or so enrolled in the (now defunct) pilot?
I'm confused.
Thanks (2)In the old system there is a Client List, which means at least that I can see which ones I have !
But with 50+ to review, the only way I can confirm that they are in the new system is to put each VAT number in turn and see what it says. I THINK all mine are migrated but it will take less time to just wait until something fails, then manage by exception.
The absence of a 'dashboard' is one of the major omissions in the new system, and probably why agents hate it. A pity because once you are in, the available information is greater, and helpful
EDIT
I just signed in to the Agent Services Account and it tantalised by offering to transfer over eight clients (an unknown mix of VAT, Self Assessment etc). When I said OK it asked me to log in with the old credentials, then to enter the last four digits of the Government Gateway User ID. That did not work - I used the last four of each GG ID (the one for the old and the one for the new) and it said "This user ID is already linked to your agent services account"
GRRRRR !
Thanks (3)"n the old system there is a Client List, which means at least that I can see which ones I have !
But with 50+ to review, the only way I can confirm that they are in the new system is to put each VAT number in turn and see what it says."
So frustrating. I have to look up the VAT number for each clients before I can take a look.
The programmer who designed it and the HMRC staff who signed of it should be fired for incompetence (or as more commonly used, send to the House of Lords)
Thanks (3)Exact same thing with a mixture of 1, 8 & 3 clients. Completely lost.
Thanks (0)Login to ASA,
'Manage account' on top bar,
'Manage Team member'
Select 'client' tab.
This should show who is linked, and which team members have access.
Thanks (1)I am heartily sick of HMRC wasting our and clients' time. I'm sure I'm a member of a very large club. A client had a problem with VAT registration recently (surprise?) so we ended up lodging a complaint via his MP. Even the complaint was dealt with unsatisfactorily.
As "customers" can we please take our custom elsewhere?
Thanks (6)I have no clue how a "digital handshake" works. I can just see more pain for me and my clients (who by the way are taxpayers not customers of HMRC)
Thanks (2)you are making pain for yourselves if clients dont have gateway with acces to all services end of.
Where client has gateway with vat added digital handshake is pretty easy - just keep a noote of info you will need to reqeust authorisation for future use.
https://www.gov.uk/guidance/how-to-use-the-digital-handshake-to-get-auth...
Thanks (0)As I have said countless times...
Not fit for purpose and they make the job ridiculously difficult, absolutely useless organisation that needs a complete overhaul from top to bottom.
They currently offer absolutely nothing to the public or accountants.
Thanks (5)I'm glad all this digital stuff is making it easier...(heavy sarcasm in case you missed it).
Yet another fine example of making it harder: why is there even two different agent accounts? Surely someone at HMRC must realise that the starting point should be to combine them into one decent one?
Too much to ask...
Thanks (3)Pages