Completing tax returns can be time-consuming and tricky, which is why many business owners appoint an accountant to deal with everything on their behalf. But as well as taking care of your tax compliance, your accountant can also deal with HMRC for you too.
Known as ‘appointing a paid agent’, it basically means delegating to a professional who can then liaise directly with HMRC about your finance and tax-related matters.
An appointed agent can act on the taxpayer’s behalf for different types of tax, such as Corporation Tax, VAT, PAYE and Self Assessment – you might even have different agents for each one.
Who can be an agent for me?
Paid agents can be tax advisors, solicitors, or accountants, but you can authorise almost anybody to act on your behalf when it comes to dealing with HMRC, including family members and friends. This type of agent is known as a ‘trusted helper’.
The benefits of having an accountant represent you
Although you have a number of options when it comes to who you can appoint as your agent to deal with HMRC, there are advantages to selecting your accountant for the role.
Simplifying processes and communication
Communication with HMRC can involve anything from queries and requests for information, to payment notices and deadline reminders. Appointing your accountant as your agent means the majority of this correspondence can be filtered through them.
This can make life a lot easier, leaving your agent to relay information to you as needed (and translated into plain terms, rather than scary-sounding HMRC speak).
Audit representation
If HMRC decide to audit your accounts or launch an inspection, your accountant will be able to make sure everything is in order, and talk you through what’s happening. An HMRC audit can be a daunting prospect, so having a professional in your corner can be a valuable source of confidence and support.
Compliance and strategy
As well as helping you stay on top of all your deadlines, your accountant will make sure you remain fully compliant with HMRC at all times.
They’ll also be able to help you optimise your tax efficiency, improve your financial reporting systems and save costs in line with all of the necessary rules and regulations.
Save yourself some time
As well as the tools of the trade that an accountant can bring to the table as your paid agent, there is also the overall benefit of significant time-saving – gold dust for business owners, right?
Having a professional at the helm of any back-and-forth with HMRC means you can focus on other things, like growing your empire. It also reduces the risk of any errors or confusion along the way, which, again, buys you back invaluable time and fends off financial penalties.
Keep stress to a minimum
All the above benefits combined make for a far less stressful relationship with your taxes and HMRC. Entrusting your accountant takes the pressure off you in exchange for peace of mind that your tax affairs are being dealt with by those who know what they’re doing.
How to appoint an accountant as an agent
Ready to appoint your accountant as your chosen agent to deal with HMRC on your behalf? The first thing you need to do is check they meet HMRC’s standards for agents.
If you’re satisfied these standards are met, the next thing you need to do is provide your chosen agent with permission by appointing them through one of HMRC’s official authorisation processes.
Your agent will be able to guide you through whichever method is best for you.
Authorising your agent with a 64-8 paper form
A 64-8 form can be used to authorise an agent to deal with Self Assessment, partnerships, trusts, tax credits and people being paid via the PAYE system. It’s also used for VAT and for Corporation Tax.
You and your accountant can work together to make sure all the necessary fields are filled in before you send it back to HMRC to process.
Authorise access to your accounts online
Your accountant can apply for access to your tax accounts through their own HMRC Agent account.
This process will generate an agent code for each tax type they’re dealing with for you, which will be sent to your registered business address. Share these codes with your accountant so they can complete the authorisation on their end and start acting on your behalf.
Grant access through the Government Gateway
If you’d prefer to grant your accountant access to act as your paid agent yourself, you can do this through your business tax account by signing in using your Government Gateway.
Note: You will need to be set up and registered for HMRC Online Services for this method of agent authorisation.
A ‘digital handshake’
This is where your agent sends a link for you to click that will digitally authorise them to deal with HMRC on your behalf.
Currently, this method is only available for Making Tax Digital (MTD) for VAT and personal taxes.
Once somebody, such as an accountant, has been appointed as an agent ready to act on your behalf, they will then receive most of your correspondence with HMRC. There are a few exceptions to this, including your tax bills and any refunds you’re issued with.
Removing access
If you no longer wish for somebody to have access to your accounts or act on your behalf as an agent, there are two ways you can undo this:
- Go to your HMRC business tax account (if you have access to this) and remove or swap the agent.
- Contact HMRC over the phone or via post, and they will be able to guide you through the agent removal or replacement process from there.
Your responsibilities as a taxpayer
It is important to remember that even if you do choose to appoint a representative agent, you (the taxpayer) are still ultimately responsible for reporting and paying your own taxes.
That’s why it’s so critically important to have a communicative relationship with your trusted agent(s) and provide them with honest, detailed, and up-to-date information.
It’s also essential to review all documents and tax returns that are shared with HMRC on your behalf to ensure that your records are accurate and compliant. If they aren’t, you’ll be the one dealing with the repercussions, such as financial penalties, not your agent!
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