What Is The Big Change?
HMRC has long upheld a practice of providing official tax agents with the tax information of specific individuals they are authorised to represent, if they request it.
However, from the 1st May 2017 this is all changing. Now when an official tax agent calls up HMRC to ask for the pay and tax details of one of their clients that they have been given full authorisation to represent, HMRC will decline to provide this information, despite the agent having full authorisation.
What HMRC will do instead is send the information in the form of a letter to the tax payer whose information is being requested, at that tax payers last known address. Crucially, a copy of that letter will not be sent to the tax agent.
What Are The Reasons For This Change?
HMRC has provided two main reasons for this change;
The first reason is to reduce call handling costs. HMRC receives approximately 2.7 million requests from tax agents for individual tax and pay information, per year. A substantial proportion of those ringing are high volume repayment agents, however this is not always the case.
The second reason is to increase security. Often, individuals ring HMRC impersonating the taxpayer. There are also circumstances where the tax payer is not actually aware that they have signed an authorisation form or a deed of assignment for tax repayments.
Does This Break The Spirit Of The Tax Payers Charter?
An interesting debate has been recently waging in some circles is as to whether this new change breaks the spirit of the tax payers charter, specifically point 1.5 which clearly gives the tax payer the power to let someone else (such as an authorised tax agent) deal with HMRC on their behalf, and states that in these cases, HMRC will deal with this authorised person/body “courteously and professionally”.
How This Change Is Being Communicated?
From the 1st of May there will be a short recorded message on the Agent Dedicated Line (0300 200 3311) which will succinctly and clearly explain the change and new procedure. HMRC will also be writing to 5,000 agents, making them aware of the change. Further, the changes will be outlined and explained in the next edition of “ Agent Update”.
A Digital Solution For Authorised Tax Agents On The Horizon?
From summer 2017, HMRC expects to have a fully digital solution rolled out which will allow authorised tax agents to access the pay and tax details of their clients, without making a phone call.
It is not yet known if this innovative digital solution will be available to all tax agents right away. Further, it is also not yet known if the authorised agents will have to go through a new, more stringent security clearance process to gain access to the data, or not. We suspect they probably will, to address some of the security concerns with the previous way of doing things.