From 1 May 2019, HMRC-supervised accountants will see their AML supervision fees rise by 230%.
Under the new fee structure, HMRC has confirmed that existing renewal fees will increase from £130 to £300 per premises.
Explaining the move, the Revenue said the increased fee is to cover the department’s “more robust approach to supervision”.
In order to do this, HMRC will need a greater number of staff working face-to-face and at their desks on compliance activity so it can provide greater coverage of its supervised population.
HMRC’s decision is the result of a consultation last August which gave responders three options that would enable HMRC to increase its income from around £10m to £18-20m.
In addition to the increased fee, the consultation also flagged concerns from affected parties about the complexity of the fee structure. In response to a preference towards a single fee, HMRC has decided to remove the one-off application charge from January 2020.
HMRC has also opted against introducing a late renewal fee at this time, waiting instead until the service has improved and appropriate safeguards are in place.
And it’s not just the renewal fees that will increase. HMRC also has chosen to increase the existing test to £150 in May.
Responders to the consultation leaned towards a turnover-based fee. Sole traders and small businesses, in particular, felt this approach would proportionately represent the risk that they present. As such, HMRC is set to introduce a reduced “small business fee” of £180 from May 2019 for businesses with a turnover of less than £5,000.
Perhaps unsurprisingly, affected AccountingWEB members did not greet the news with great joy. Chris Mann was the first to break the news on Any Answers: “In addition to being an unpaid "informant", I'm now obliged to pay what seems to me, to be quite excessive fees, for the privilege”, he said.
The increased fee did not find supporters in other corners of the site. In another thread, legerman bemoaned the efficiency of HMRC’s supervision: “Last year it was taking nine months to get approval and emails were taking 16 days to be answered. I don't know how long the wait is now as my renewal only went in 3 weeks ago.
“After increased fees, will the service be running at cost, or are HMRC looking to make a profit from this service?”
And Cheshire was also unimpressed: “Having been 'supervised' by both HMRC and a governing body I fail to see what HMRC supervision consists of. It's just another form of taxation. They just take the fee, add your name to their online list and run.”
HMRC currently supervises 23,000 businesses across seven different sectors, including accountancy service providers not supervised by a professional body.
About Richard Hattersley
Richard is AccountingWEB's Practice Editor. If you have any comments or suggestions for us get in touch.