Changes to agent’s authorisation – confusion abounds!
While practitioners wait with bated breath for the outcome of the ‘making tax digital’ consultations, one of HMRC’s projects is already with us and causing confusion.
This is the Personal Tax Account. The issue is how the existing agent’s authorisation process will be used going forward in terms of access to the client’s tax details.
Recap on the current authorisation position This in itself is not always straightforward! As a tax agent or adviser, you must be formally authorised by an individual or business to deal with HMRC on their behalf. HMRC is not able to send information or talk to you about your client without this formal authorisation. So the traditional method of acting for a client is:
First get a code: You must have an agent code before you can set up agent authorisation for:
If you need to arrange authorisations for more than one of these, you’ll need to apply for separate codes for each type. The code is needed for both online and paper authorisations. Then get authorisation from your client:
The easiest way to arrange formal authorisation is to use HMRC Online Services. This saves you and your client from having to complete paper forms and makes it easier for you to manage authorisations for all your clients online.
If you choose not to use HMRC Online Services, you can ask your client to complete the appropriate paper authorisation forms.
To use the Self Assessment for Agents online service you’ll need to:
have an agent code
be registered with HMRC’s online services
add the Self Assessment for Agents service to your portfolio
set up agent authorisation for each of your clients.
self assessment clients who have a British Forces Post Office address.
You’ll need to use HMRC’s paper authorisation forms for these clients.
So where does the confusion come from? So far so good. This ‘traditional method’ of authorisation works fairly well and most members are comfortable with its operation. However, at the end of 2015 HMRC introduced a new method of access to tax details for the client personally.
Personal tax accounts (PTA) These were designed to give easier access for clients to a complete picture of their tax details/related services and this would complement the MTD proposals. HMRC thus encourages the taxpayer to register for this service – either via a Government Gateway accountor by sign in with GOV.UK Verify.If they haven’t used GOV.UK Verify before, HMRC say it should take about 10 minutes to set up.
The personal tax account can then be used to:
check income tax estimates and tax code
fill in, send and view a personal tax return
claim a tax refund
check and manage tax credits
check state pension
track tax forms submitted online
check or update the marriage allowance
tell HMRC about a change of address
check or update benefits from work, eg company car details and medical insurance.
More services are scheduled to be added in the future.
The confusing areas There are three key areas which are causing confusion:
3.36 Ideally a member will explicitly file in his capacity as agent. In some cases HMRC will issue a pin code to the client for the agent to use. A member is advised to use the facilities provided for agents and to avoid knowing or using the client’s personal access credentials wherever possible
Therefore the introduction of the PTA simply causes confusion to the client as their agent will be using their own authorisation as normal.
Can the accountant use the PTA as well? The short answer is no. HMRC has always advised agents not to use a client’s credentials to log in. One of the reasons given is that it is concerned that this may create security alerts. So we now have two systems attempting to perform many of the same functions. Many members are concerned that the PTA is a means of driving a wedge between the client and their agent in order to reduce the level of agent’s advice.
Further moves from HMRC HMRC’s Talking Points webinar for agents on 14 September 2016 contained some important information about yet more services aimed at agents. The complexity of the details can be extremely confusing and the interaction with existing/other planned developments is unclear.
Private beta web-based PAYE service for agents HMRC has developed this service by adding additional data on PAYE payments history, including payments by the employer and how they have been allocated. This includes a webchat service. In a recent ‘talking points’ webinar, HMRC said that around 7000 agents are using the PAYE service. However, only agents with limited numbers of client registrations are being invited to take up this service at the moment and there is a daily cap on the level of new invitations. If the quota is full the agent will be invited again at the next opportunity.
HMRC does not intend to include larger agents in this service but is instead developing yet another separate service (Application Program Interface) which will populate commercial software with their client’s information. The API service is expected to be made available to commercial software providers before April 2017.
To confuse matters even more, HMRC appears to be saying that when the API software is developed it will effectively halt the work on the smaller agents’ service, presumably to eventually switch everyone to API. However, the slides from the webinar were not clear as to how long this would take and that ‘the web-based service will be retained until the number of users drops’.
Agent registration HMRC is developing a new authorisation/registration process for agents which appears to affect all agents large or small. HMRC is expected to be launching a beta version of this service in December 2016. Again it is not clear how this will affect the existing service that most accountants will currently use.
Conclusion You should continue to use your current agent authorisation process and not use the client’s PTA log in. ACCA will keep you informed of any on-going developments as soon as we get new information.
Further information Another talking points webinar from HMRC on the subject of agents’ services will take place on 7 December.