Running your own business is very exciting, but there are some aspects that perhaps you could do without. For many people, one of these is dealing with HMRC.
Quite apart from the dread of another brown envelope dropping through the letterbox, there are the deadlines, and the fact that HMRC seem to speak another language sometimes.
The good news (there is some!) is that you don’t have to do this yourself. In fact, you can appoint someone to talk to HMRC and deal with all of the brown envelopes for you, leaving you to get on with your day job.
What is an authorised agent?
An authorised tax agent is someone who you legally appoint as your representative with HMRC. They’re usually an accountant or tax advisor, and are registered as an agent.
Once you grant them permission, they will be able to talk to HMRC about your tax affairs, submit tax returns such as Corporation Tax or Self Assessment for you, and respond to any queries from HMRC.
An authorised agent can act in a variety of ways.
- Purely as a submission service, sending your returns through their own software (or directly from Pandle!)
- They could act as your accountant, producing your tax returns and submitting them on your behalf.
- They might act as your tax advisor, giving you advice on the most tax-efficient way to organise your affairs, and representing you in the event of queries or investigations by HMRC.
There is an important point that you do need to note here…
If they fall down on the job, then HMRC will come looking for you!
Why would you want to authorise a tax agent?
One of the reasons anyone authorises an agent is because of stress. You can’t be an expert on everything, so hiring in an expert relieves some of the burden. When HMRC send out a letter for you, they’ll address it to your agent, who is much more likely to understand what it all means.
They’ll be well versed in deciphering some of the more opaque examples of language that HMRC use, and let you know what you should and shouldn’t be worried about.
The other reason is sheer convenience. Your agent can produce and submit returns of all types on your behalf. It means you’re more likely to take advantage of tax relief opportunities, and do things correctly. This will become particularly relevant as Making Tax Digital continues to roll out.
It’s also worth considering that a good agent will have all of your deadlines logged. Again, these are still your responsibility, but it doesn’t hurt to have another set of eyes making sure that you never fail to send in your confirmation statement or Self Assessment tax return on time.
How do I authorise a tax agent?
Not just anyone can be an authorised agent. HMRC has strict rules around who can and can’t be an agent, and they must be registered for anti-money laundering supervision (amongst other things). In fact, HMRC has a set of standards that they expect agents to meet.
There is an option to have someone help you short-term with your Self Assessment return. For example, if you need help reading forms. You can do this by calling HMRC with the person present, and authorising them in this way.
For longer term support, there are two ways to let HMRC know you have chosen an agent to act on your behalf.
- With the HMRC appoint an agent service online, which is generally quicker and more convenient.
- Use form 64-8 and send that to your tax office.
You can also use the online VAT services website if you simply want someone to manage your VAT returns.
What are the downsides to authorising an agent?
There are a lot of reasons why you may want to authorise an agent for your business, but like all business decisions, it’s important to recognise that there may be some negative aspects. The most obvious of which is expense. If you pay professionals to submit your VAT, CIS, or Company Tax Returns instead of doing it yourself – there will be a cost involved.
Business owners can often feel left out of the loop when they have someone new managing their tax affairs. This feeling of disquiet is normal whenever you delegate powers for the first time.
It is also true to say that if you appoint an agent who is not good at their job, then this can cause problems with missed deadlines or incorrect reporting.
However, the vast majority of professional agents are just that – professional. You’re much more likely to find that they deal with your affairs in a very capable and timely manner.
Should you use an authorised tax agent?
Having an authorised agent can save you a lot of time and make dealing with HMRC a lot more convenient and less stressful. You’ll have professional support, and they can submit your returns using their own software, if you’re not already using Pandle! An agent will also deal with HMRC queries on your behalf so that you can get on with your day job.