How should you respond to issues presented by personal tax accounts (PTA) and simple assessment?
Recent developments from HMRC have resulted in new procedures for the personal tax account (PTA) and simple assessments, which affect both current and future tax returns.
Personal tax account
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. Many accountants obtain authorisation via the HMRC Online Services portal, with paper authorisation forms providing a useful alternative.
In 2015, with one eye on future developments linked to Making Tax Digital, HMRC heavily publicised the introduction of personal tax accounts (PTA). Taxpayers were encouraged to register via a Government Gateway accountor by sign in with GOV.UK Verify. These new accounts allow them 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 their 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).
This development led to confusion amongst accountants, who were left wondering which route should be used when handling clients’ tax returns and managing their tax affairs.
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, accountants should continue to use the online access provided to them as agents by HMRC. Many have asked ACCA if they can also use a client’s PTA and our clear guidance is no.
HMRC advises agents not to use a client’s credentials to log in, with a desire to avoid security alerts cited as one reason.
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.
Another issue causing concern for our members is HMRC’s ‘simple assessments’ service. This automatically populates the assessment form with client information drawn from various sources. HMRC sees it as a path to ending the need for many taxpayers to submit a tax return.
While its impact on tax returns for 2016/17 will be limited, it will be increasingly relevant for the following tax years, with two key issues for accountants:
Who is now responsible for checking the simple assessment? Does the client expect you to do it and if so how will you charge (in the absence of a tax return being completed)?
The simple assessments may not include certain details – for instance dividends or rental income – so a tax return may be inevitable and this will need to be made clear to the client.
You should continue to use the current agent authorisation process and not use a client’s PTA log in.
Full details of simple assessment are available here.