Conveyancing solicitors and estate agency payroll teams are among those who could fall foul of new mandatory HMRC tax advisor registration requirements from May, facing penalties of up to £10,000.
From May, tax advisers such as these are prohibited from interacting with HMRC on behalf of a client unless they are registered and may be subject to sanctions if they attempt to do so.
This includes contacting HMRC by telephone, post, email or online messaging, or if they file any returns, claim or other document with them on behalf of a client. It brings the vast majority of firms providing any kind of tax advice or services under the compliance umbrella, requiring them to register with HMRC. Previously it was a voluntary registration.
Compliance shake-up
Rick Schofield, a tax partner at accountancy and business advisory firm Azets, said the changes could catch many out. “There are going to be some costly errors made by unsuspecting organisations or individual sole traders who assist other people with their tax affairs,” he said.
“This compliance shake-up is going to catch a lot of people out, the good as well as the bad, such as when it comes to stamp duty returns or chasing a PAYE code.”
Agency businesses must also check payroll compliance, since the rules could cover them too, he warned. “You must register even if it is an email or portal enquiry to chase a PAYE code for a member of staff.”
Waiting for advice
He said that government advice is, so far, lacking. “Everyone is looking to HMRC for an exhaustive dos and don’ts list but nothing is forthcoming yet, adding to a sense of filing doom from May. People just want clarity and guidance.”
According to HMRC, the policy “ensures all tax advisers interacting with HMRC on behalf of their clients meet minimum standards”; that the changes “will improve HMRC’s ability to monitor and exclude tax advisers who are objectively unable to meet HMRC’s Standards for Agents or cannot lawfully act as a tax adviser”.
The digital registration process, which starts in May and includes a transitional period of at least three months, will be complemented by a non-digital alternative for those who are digitally excluded.
Self-employed agents who are individual taxpayers can also be indirectly affected. He said: “Individual taxpayers may be affected if their tax advisers are no longer able to act on their behalf because they are either unable to satisfy the new registration requirements imposed on (UK-based and overseas) tax advisers, or if their tax adviser is subject to sanction.
“You may see individual taxpayers left in expensive limbo, and facing late penalty fines, if their agents decline to send documentation to HMRC for whatever reason.”
