HMRC has updated their guidance on the Tax Agent Strategy - including a summary of developments on the Agent Client & Statistics (AC& S) programme. HMRC aims to use the AC & S programme to identify agents with clients whose filing, payment and compliance levels are below what HMRC would expect.

As part of that initiative, earlier this year HMRC tested a proof of concept model initially to look at Self-Assessment agents perceived as presenting a level of compliance risk to HMRC where either:

• less than 80% of their clients submit returns on time
• less than 60% of their clients pay on time

More information on the outcome of this work is available at http://www.hmrc.gov.uk/agents/strategy/agentview.htm

HMRC is now working on developing further pilots with another due to commence soon focusing on agents with CIS repayment clients classified as presenting undue compliance risk to the UK tax base.

So what does AC&S mean for Tax Agents? AC & S is undoubtedly part of HMRC's own risk management procedures. While it is not in the interests of Chartered Accountants to have to compete with poor quality agents, AC & S will add an additional element of compliance risk to tax work. HMRC have a range of powers at their disposal, ranging from civil to criminal, which can be used to target what is viewed as risky/poor behaviour by the tax agent community.

We have relayed the Institute's position to HMRC management, in particular stressing the high level of ethical behaviour, training and regulation which being a Chartered Accountant entails. Not all of the aforementioned HMRC interventions will result in compliance enforcement. The initiative is being badged as HMRC aiming to provide support where it's needed and use the outcome of the pilot programmes to “inform future support and education activity”.