When HMRC refuses to talk to a tax agent the problem is usually a missing client authorisation to act, but there are numerous and confusing ways to secure this.
The most common way to authorise an agent to act is for a new client to complete a form 64-8, either online or on paper.
HMRC has just released an updated version of the 64-8, which should be used for all new clients from now on.
The new 64-8 includes an important change for PAYE and CIS clients, as it asks for the agent’s government gateway identifier and PAYE agent ID code. Completing these fields allows HMRC to give the agent access to services that previously needed the “file by internet” form FB12 to be completed.
The old version of the 64-8 will not be accepted as authorisation from new clients from some point in Autumn 2022 (date to be announced). Existing clients do not, for now, have to complete a fresh 64-8 but HMRC may require new authorisations from those existing clients at some point in the future. HMRC is aware of the enormous scale and burden of the requirement to get reauthorised by all clients.
The new form 64-8 is a small step towards rationalising the confusing mess of authorisation methods, which have not kept up with the HMRC online services that agents need to access on behalf of clients.
In addition to the 64-8 and the FB12, there is a special authorisation form for ATED (ATED 1) and an online-only authorisation method for the capital gains tax UK residential property return. The online agent authorisation (OAA) service covers most HMRC services but the new client needs to have a UTR number in order to use that.
An article in the January 2021 issue of Agent Update listed all the ways an agent can be authorised to act.
The SEISS grants have completely fallen through the net of agent authorisation, as the system was set up for taxpayers to submit the SEISS claims themselves, with no agent access.
Apparently, no one considered the other end of the process when the SEISS grants must be accurately reported on tax returns, often with the assistance of accountants. If the amount of SEISS grant income reported by the taxpayer doesn’t match what HMRC think was paid out, their tax return will be automatically amended by HMRC.
Applying for the fourth and fifth SEISS grants was an even greater challenge for taxpayers as there was the tricky turnover test to pass. Some taxpayers will have typed in the wrong figures when applying or didn’t apply at all. In such cases the SEISS grant amount can be challenged.
As was recently revealed in its working with tax agents blog, HMRC won’t talk to tax agents about their clients’ SEISS grant applications, because the form 64-8 does not cover that system. HMRC can talk to agents about SEISS figures that have been reported on the tax return, but it can’t discuss SEISS grant figures before the tax return is submitted.
If you need to discuss the SEISS grant with HMRC before the tax return is filed, you will have to provide written consent from your client. This should include the client’s name, address, tax reference number (for example, UTR number) and signature, plus your name and address as the agent.
This authorisation letter should be sent to: National Insurance Contributions and Employers Office, HMRC, BX9 1AN.
One of the key problems with agent authorisation is that HMRC operates in tax silos; it is not customer focused. HMRC sees the “customer” as a payer of VAT, or income tax, or as tax credit claimant. It does not focus on the individual as someone who needs to access different services provided by HMRC and pay different taxes.
This approach is evidenced by the roll-out of MTD – which is tax by tax, not by organisation. Each taxpayer will be required to comply with similar, but slightly different, MTD filings, which must be submitted to different deadlines according to the tax reported.
Some of this silo approach dates back to when different organisations dealt with different taxes: HM Customs and Excise collected VAT, customs and excise duties; the Inland Revenue dealt with most direct taxes such as income tax and corporation tax; while the Department of Social Security was responsible for national insurance.
However, all these responsibilities have been concentrated in the hands of HMRC since 18 April 2005 or earlier. Some 17 years on from the HMCE and IR merger there can be little excuse for HMRC continuing the tax-silo approach.