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Limited audience for HMRC letters

22nd Apr 2016
Tax Writer Taxwriter Ltd
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Accountants who give advice regarding offshore assets or income will be required to send a HMRC letter to individual clients who received that advice.

This requirement has been imposed by F(no.2)A 2015, s 50: International agreements to improve compliance: client notification, with the detail prescribed by regulations. The article Accountants forced to send HMRC letters to clients was based on the first draft of those regulations, which generated a lot of feedback to the professional bodies and directly to HMRC.

It appears that HMRC is listening to the practical concerns raised, as the latest version of the draft regulations and guidance restricts the scope of the audience for the HMRC letters. Accountants who provide offshore advice or services to clients that relates to the preparation and delivery of the individual client’s tax return won’t have to send the HMRC letters to those particular clients.

If a UK resident individual lets a property in Palm Springs USA, their accountant will advise them to report that rental income on the foreign pages of their UK tax return. Because the rental income is reported on the UK tax return, the accountant is exempt from the obligation to send an HMRC letter to that client.

Accountants who give wider advice about offshore assets or income, which isn’t reflected in the individual’s tax return, may have an obligation under F(no.2)A 2015, s 50.

For example a tax adviser who provides inheritance tax planning advice concerning assets located offshore will be required to write to each recipient of that advice. The current proposals are that the accountant must send a personally addressed letter to those individuals who were both clients on 30 June 2016, and tax resident in the UK in 2015/16.  

If you have further questions about the requirement to send HMRC letters to clients please contact your professional body. Most accountancy and tax bodies have been given access to the draft letters, regulations and guidance, but those documents have not been released publically.

The CIOT stated on its website: “Although we would have liked to have published these documents on our website, we have been asked by HMRC only to publish them on a trusted stakeholder basis. We are therefore currently consulting with our volunteer members.

“Please rest assured that the CIOT is in discussion with HMRC about these measures and will be responding to the informal consultation by the deadline of 22 April.”

Replies (13)

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By aggy91
22nd Apr 2016 18:08

Why are these things being kept secret? Why was publishing this article delayed? Under what legal authority are HMRC using and what else is being hidden?

Why are the Accounting bodies and press playing along?

Thanks (3)
By AnnAccountant
22nd Apr 2016 21:08

Get with the beat, Baggy

Not sure why I bother paying subs to several institutes given they are drawing nice salaries off my subs and not bothering to fight for their members.

Nice pay, easy life. Not what I pay you for.

I'm not 'resting assured' and I don't want you to be having 'discussions'.  I want you to tell them to stick up HM's RC

Read this institutes.  Get in tune with your members or die. 


Thanks (4)
By Comptable
24th Apr 2016 16:52

untrustworthy members?

It seems that the CIOT does not consider its members to be "trustworthy stakeholders"

Do you really want to be a member of an Institute that doesn't trust you? (with acknowledgements to Grouch Marx).

But anyway what can be in these drafts that is so sensitive?

The real question though is what will this actually achieve? And has HMG done a cost/benefit analysis? Did I read somewhere that that is a requirement for all new measures?

Thanks (0)
By Rebecca Cave
25th Apr 2016 09:35

Consulting with members and wider tax agent community

I have a good deal of sympathy for AnnAccountant's views, and this is one of the reasons why I have been pushing to publicise this issue since it first emerged in draft legislation in Autumn 2015.

However, I can also see that the professional bodies are placed in a very difficult position. They are given draft papers to comment on, and told by HMRC to keep those papers confidential. In order to preserve a good working relationship with HMRC and to maintain thier position as part of the tax policy formation process the professional bodies agreed to HMRC's request on confidentiality.

The article above was only published after a draft version had been seen by HMRC and CIOT, and both those bodies were happy that the confidential nature of the material released to CIOT was not breached in a material way.

My concern on this issue has always been that tax agents who are not members of the professional bodies have not been part of the consutlation process on this law which can potentially affect every accountancy practice in the UK. You may say that this is a price such tax agents pay for choosing not be a member of a professional body, but that is an argument for another day.



Thanks (1)
By Snowstorm
25th Apr 2016 09:48

but why secret?
Yes, I understand that the CIOT feels obliged to keep the papers confidential after being told by HMRC to do so. But why does HMRC want to keep them confidential, and why does it feel it has the right to do so? What can be confidential about proposals to enact regulations that affect the general public?

Thanks (2)
By ringi
25th Apr 2016 12:18

Having 101 versions on the internet can lead to confusing…

One possible concerns the HMRC may be having, is that they don’t want drafts published all over the internet, as when the final text comes out, it is very possible the a Google search will still lead to a copy of the draft.   There is also the same issue if there are news paper articles quoting from the drafts.

(I am not saying this is a good reason to keep the drafts confidential, just that it is a factor to consider.)

Thanks (0)
By Expat24
25th Apr 2016 13:08

Clearly no transparency

here then, with HMRC and all our prof bodies colluding to keep members in the dark.  And, by implication, we are not trustworthy! 

Mark my words, we will be in the same position re. Digital Tax Accounts too!

Thank you CIOT/ATT/ICAEW et al - great job you are doing for your members.

Thanks (0)
By Tom 7000
25th Apr 2016 13:22

Isn't that what we psy our subs for so the clever people at the institute can deal with the set up for us.

They will have on tell us what the wording says sooner or later otherwise no letters will be sent out....

Thanks (0)
By raybackler
25th Apr 2016 13:35

Google search!

I always use a Google search when looking for documents on the HMRC website, because the HMRC search tool is useless and often throws up old documents first.  Google is far better for searching the HMRC website.

I can't believe the reasons for the secrecy on this issue and agree that our institutes should have fought this, not just rolled over regarding confidentiality and on the issue generally.  Why should an accountant be required to send out HMRC letters?

Thanks (2)
Small Dog's RAT Return
By Oldmanwetmix
27th Apr 2016 10:08


A HMRC bod actually advised me to search their website using google instead of their own search

HMRC asked us to call a client and ask them again to pay their payment on account. Pleased to overhear my colleague tell HMRC she would as soon as HMRC confirmed they had called the client and asked them to pay our fee.

Thanks (1)
By Oppco
25th Apr 2016 14:31

Think but this, and all is mended ...

If you accept the following assumptions:


HMRC think all taxpayers are dishonest


HMRC think all agents collude with tax payers to conceal this dishonesty


then the reasoning behind the letters (and MTD and so on) becomes apparent


Add to this  the fact that HMRC have the Govts. ear, and there you go




Thanks (1)
By johnjenkins
25th Apr 2016 15:58

I presume

Customs and excise were also given a draft, considering a lot of agents pay subs to them in the form of "money laundering regulations".

Thanks (0)
By hmlask
26th Apr 2016 08:52

This is dangerous nonsense

Let us assume that our supine representatives fail to get this nonsensical plan changed.

I will then need to write in prescribed terms to some of my clients, enclosing a standard letter from HMRC, which I will have to personally address to the client. Obviously, the clients will be told that this is an HMRC requirement and that the letters do not necessarily represent the views of me or my firm (which, as a previous contributor noted, will mean that it will be ignored). 

My bigger concern is that there has been nothing published which suggests that I am going to be required to advise HMRC of the letters that I have sent. (Otherwise, what is the point of the exercise?) Is this what the Institutes are keeping secret from us? That we are going to be expected to break client confidentiality by telling HMRC who we have written to?

I think that it is high time that we be told the truth by our so-called representatives.

Thanks (1)