Recently the Northern Ireland Tax Committee (NITC) of Chartered Accountants Ireland responded to two very different consultations relevant to agent relationships with HMRC.

The recent consultation ‘Establishing the future relationship between the tax agent community and HM Revenue & Customs’ seeks to provide a platform for an enhanced agent/HMRC relationship in the future.

The consultation looks at enabling agents to complete more services online for clients via ‘self-serve’ proposals. These enhancements are attractive (provided the cost savings outweigh the extra work to be taken on by agents) but balanced against this is the need to register with HMRC and satisfaction of IT security requirements by both parties to the relationship. At this point in the consultation it is difficult to assess the potential level of costs or potential disproportionate impact without knowing the specific design of the self-serve system.

However, the commercial promise of ‘self-serve’ for Chartered Accountants would be that routine tax compliance work could by and large be accomplished without having to engage in slow correspondence or unsatisfactory telephone contact with HMRC. It is clear to us from comments from members that poor HMRC customer service is making tax compliance work inefficient and therefore less commercially attractive. Members will recall that we expressed these views directly to HMRC in our submission on service delivery earlier this year. When, and if, self-serve, is introduced, HMRC must not neglect to work further on improving service standards.

The consultation also contains proposals by HMRC to assess the work of agents via ‘the agent view’. Whilst this should help HMRC manage risk more effectively, it must also allow for professionally qualified highly-competent tax agents, such as members of Chartered Accountants Ireland, to receive proper credit for their work. It will also be important to ensure that agents whose work may be identified as poor are given a chance to challenge HMRC's view and, if agreed necessary, to revise their procedures.

As an over-arching principle, Chartered Accountants Ireland's response to the consultation states that HMRC should not adopt a regulatory stance for the professional agent community. The end result of the proposals must be to enhance the compliance working environment activity for properly regulated and qualified tax agents.

The Northern Ireland Tax Committee also responded to the consultation ‘Working with Tax Agents: Dishonest Conduct’. We had previously submitted responses to the related consultations on Modernising Powers, Deterrents and Safeguards: Working with Tax Agents (April 2009) and Draft Legislation on Deliberate Wrongdoing by Tax Agents (February 2010)

The proposals in the ‘Dishonest Conduct’ consultation did in some ways reflect concerns expressed by Chartered Accountants Ireland and other UK representative bodies arising from the earlier related consultations. However, it is disappointing that HMRC continues to pursue this legislation substan-tially with its original approach. We agree that it is right for HMRC to have appropriate powers to take action against what we believe to be a very small minority of agents involved in dishonest conduct, but remain unconvinced of the immediate need for additional legislation in this area, especially insofar as regulated agents are concerned.

Chartered Accountants Ireland's response encourages HMRC to take full account of the role of the regulatory bodies, such as Chartered Accountants Regulatory Board, where concerns over agent behaviour arise. Any alternative legislation under consideration should be directed primarily at the unregulated segment of the tax agent market.

Members were informed of both consultations through features in Chartered Accountants Tax News. In conjunction with the Ulster Society, members were also given the opportunity to discuss the Agent Strategy proposals face to face with HMRC at a workshop in June. This was followed by HMRC contributing a piece to the August edition of Accountancy Ireland.

Our full response documents to both consultations are reproduced on here and here.