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Agent view may help 'remove' poor tax agents

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The proposed monitoring of tax agents by HMRC may offer the long term advantage of ‘removing from the system’ poor agents who undercut prices charged by those providing a better quality service, according to the ICAEW’s Tax Faculty.

The consultation document Establishing the future relationship between the tax agent community and HMRC invites views by 16 September.

HMRC propose that one of the principles governing that relationship, as identified in informal discussions, is that ‘it is for HMRC’ to monitor how tax agents and their clients comply with tax obligations.

The department aims to build an ‘agent view’, a picture of each paid agent that will include the compliance performance of an agent’s clients. ‘This would provide the foundation for HMRC to target technical updates, support services and compliance campaigns to those agents with the most relevant client portfolios,’ HMRC said.

Questions raised in the consultation document, with a view to improving HMRC’s understanding of an agent’s engagement with the department, include:

  • What action/sanctions could be applied to those who act unprofessionally other than HMRC refusing to deal with them?
  • In the most serious cases how should HMRC best address their responsibility to take action against an agent by refusing to deal with them?

The Tax Faculty has identified a number of potential concerns over the proposals. It suggested that agents may stop dealing with non-compliant clients to ensure they meet the required standards.

This will mean that ‘clients that need help will find it difficult to find a good agent to help them, the effect of which will be that more work will be pushed back to HMRC’, the Faculty said.

‘From an agent’s point of view, new work often comes from clients who are in difficulty and need help.’

However, the Faculty identified as a potential advantage the prospect that ‘poor agents who undercut prices charged by professional agents but do not have the same levels of expertise and quality’ may be removed from the system, or be required to improve, in the long term.