Update on the Tax Agent Strategy

HMRC have supplied a briefing note on the work that is being done on the Tax Agent Strategy, explaining the work to date and the plans for the near future. Much of the work to date has involved CIOT and ATT members in various workshops and pilots, following well over 100 putting their names forward at the start of the year.

HMRC Briefing Note 

HMRC published its response to the consultation, 'Establishing the future relationship between the tax agent community and HM Revenue & Customs' towards the end of last year.

Since then a lot of work has been going on behind the scenes and in consultation with the Joint Tax Agent Strategy Steering Group, (JTASSG). Over 180 tax agents volunteered to work with HMRC on a collaborative fact finding ‘discovery’ phase which ran earlier this year. During ‘discovery’ we visited nearly 40 agent firms and conducted five workshops. This gave us a better understanding of the way agents work, how they manage access to information about their clients and their priorities for change. We’ll take account of what agents have told us as we design new services.

HMRC would like to thank all those agents who volunteered and the professional bodies and organisations who encouraged their members to help us. There will be further opportunities to get involved and we will be contacting some volunteers to ask if they are still happy to work with us to ensure that we get things right.

The Tax Agent Strategy – What’s it all about?

HMRC’s Tax Agent Strategy aims to develop the relationship between HMRC and agents to recognise and value the role agents play in the tax system. We will do this by:

  • better understanding the agent community and their clients, and providing the right HMRC services and communications to them;
  • maximising opportunities to align HMRC and agent processes and enabling ‘known’ agents to undertake some transactions for themselves with minimal HMRC involvement;
  • making it simpler and easier for agents to do business with HMRC by reducing costs through eliminating duplication and reworking;
  • supporting agents in making things better for their clients including tackling (the rare occasions of) poor agent performance more effectively; and
  • close working with the professional bodies in development of an ‘agent view’ and through further consultation.

HMRC’s Tax Agent Strategy (TAS) Programme

The first changes, which we anticipate will be introduced by 2015, will lay the foundations for HMRC’s future relationship with tax agents. There are three key components to the work of the TAS Programme:

  • developing a more secure online process whereby agents apply for a Unique Agent Reference (UAR)
  • developing new online services for agents
  • creating an ‘agent view’

Applying for a Unique Agent Reference (formerly known as enrolment)

Why we need to change

  • The current system whereby agents register with HMRC is out of date and involves a range of different application processes, for example separate Agent Codes for SA and CT. This results in a single agent firm often having multiple Agent Codes and references. This process needs to be improved and streamlined and provide more meaningful information to enable HMRC to ‘know the agent’.
  • The introduction of a single procedure (obtaining a Unique Agent Reference) to replace the various current processes will make registering to act as an agent easier and quicker. Once a firm has registered with the Government Gateway they will only need one single agent identifier (the Unique Agent Reference) to deal with HMRC on a range of taxes.
  • A secure process will help to protect agents, clients and HMRC from fraudulent attacks on the tax system by criminals posing as paid agents.

What will happen?

  • Agent firms will be asked to apply for a Unique Agent Reference (UAR) in order to access the new agent self serve options. We expect that agents who wish to access HMRC’s Agent Online Services including, for example, SA online will be required to have a UAR.
  • It will be important that all agents apply for their UAR in order to continue to do online business with HMRC and to be eligible for future online services as they are developed. We’ll publish information about what agents will need to do to get their UAR in good time before the changes are introduced.
  • All agents with a UAR will have access to the new Online Agent Authorisation process. Those who satisfy the (yet to be determined) criteria for enhanced access will also be able to notify HMRC of new clients online without the need for submission of a 64-8 and so be able to ‘self authorise’ to act on behalf of their clients.
  • HMRC expects to launch the new online UAR process and agent Online Self Authorisation during the 2014-15 tax year.

New online services for agents

Why we need to change

  • HMRC’s current services and processes do not recognise the valuable role agents play in supporting compliance for 8 million of our customers.
  • At the heart of the Strategy is the aim that in the future agents will have the tools to take control of more of their clients’ tax affairs and undertake transactions for themselves with minimal involvement from HMRC.
  • Putting agents in the driving seat will help to reduce costs for both agents and HMRC. Agents will not need to contact HMRC as often and more accurate information received about clients will result in fewer errors and consequential rework all round.
  • We recognise that agents are in business and that their time is valuable. More efficient processes and the ability to see information for themselves without contacting HMRC should have commercial benefits for agents and their clients as well as reducing the need for HMRC operational involvement.

What will happen?

  • HMRC is on track to introduce the first steps for agent self service – extending the Business Tax Dashboard to agents and making the online agent authorisation (to act on behalf of a client) quicker and easier - during 2014 -15.
  • We are also making enhancements to the Dashboard. We are exploring options for a new electronic channel on the Dashboard to allow a taxpayer (or agent) to send a request to HMRC to inform us that they want to set-off an overpayment on one tax against a liability arising on another.
  • A simpler authorisation process will be introduced for those acting in an unpaid capacity for friends and family to make it easier for them to obtain assistance from HMRC.

‘Agent view’

What is it?

  • The vast majority of paid agents with professionally managed practices will not be affected by the data captured through the ‘agent view’. They are likely to be within client filing, payment and compliance norms.
  • The majority of the information which will form the ‘agent view’ is already held by HMRC. It is not, however, structured around authorised agents and their clients so work on the ‘agent view’ is proceeding on a slower track than other elements of the Strategy.
  • Although the ‘agent view’ is an important part of the Strategy it is only one strand of the work. Initial data captured through ‘agent view’ will be used for the purposes of a pilot test with 60 agents whose filing of clients’ returns and clients’ payment of tax by the due date are outside the ‘norm’– sometimes by a wide margin. There are no plans to use the material for any other purposes and the tests will help to establish whether or not client filing and payment behaviour is an indicator of agent performance.
  • ‘Agent view’ will draw together data held by HMRC about tax agents and their clients’ filing, payment or compliance histories. It will also help HMRC and agents to understand better what good practice and the best agents look like so that agents will be able to see where they stand in relation to their peers.
  • We know that agents have concerns that poor client filing, payment or compliance data will automatically lead us to conclude that they are a ‘poor’ agent. That is not the case. We will not make superficial judgements and data outside of the norm will not necessarily reflect badly on an agent. We acknowledge that many agents help clients with poor tax histories back into full compliance. We value and wish to encourage agents’ contribution to this compliance effort. We will therefore ensure that this is given proper credit in the analysis of ‘agent view’ data – the precise way in which this will be done will be subject to further discussion and consultation.
  • The result of the pilot will be the first piece of evidence about ‘agent view’ and we are open to the possibility that it will change our approach, depending on what it tells us.

Why ‘agent view’ is needed

  • It is in the public interest to improve standards across the profession. The Treasury Committee and the National Audit Office have publicly expressed concern at the lack of data that HMRC holds on the performance of tax agents and have recommended that HMRC identify the minority of agents whose performance regularly falls short of what might reasonably be expected. HMRC is therefore developing ‘agent view’ to address these concerns.

What will happen?

  • JTASS have agreed that a small pilot test (which was paused to allow for further discussion) of ‘agent view’ data should now proceed but with some further reduction in the sample size.
  • Results of the initial ‘agent view’ meetings will be shared with JTASS and no further testing will take place before a full evaluation of the outcomes from the initial visits has taken place. Our focus will be on the positive – how HMRC can work with agents to help their clients comply.

Read more about the pilot of HMRC’s ‘agent view’

Next Steps

  • HMRC will be pressing on with defining the IT requirements to support the introduction of the Unique Agent Reference and the online self serve facility.
  • HMRC is considering how and when to undertake further consultation on standards and oversight of the paid agent community.
  • HMRC has commenced the small scale testing of ‘agent view’.
  • HMRC will continue to work in partnership through the Joint Tax Agent Strategy Steering Group, the Agent Engagement Group, our agent volunteers and with other representative groups and unrepresented agents to ensure that any changes that are introduced are informed by involvement and feedback from the agent community.
  • HMRC will continue to provide regular updates throughout the coming months and we’ll be refreshing the web pages about the Tax Agent Strategy to reflect the messages in this brief very soon HM Revenue & Customs: Updates on the Tax Agent Strategy - a new relationship with HMRC.

Technical Team

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