Guidance

The HMRC standard for agents

Updated 1 September 2023

1. Why HMRC has a standard for agents

HMRC recognises the value of having professional agents help taxpayers comply with their tax obligations.

The standard for agents sets out:

• HMRC’s expectations of tax agents and tax advisers in their dealings with HMRC
• an overview of the way HMRC will tackle the minority of agents who do not meet the standard

The HMRC standard for agents was first published in February 2016 and updated in 2018. The 2022 update is part of HMRC’s ongoing work around raising standards in the tax advice market.

1.1 Who the standard is for

In this document, the term ‘agent’ applies to both tax agents and tax advisers.

The standard sets out HMRC’s expectations of all individuals and businesses who are tax agents. Tax agents are agents and advisers, based in the UK or in other countries, who are acting professionally in relation to the tax affairs of others. This includes third party agents and advisers, whether acting in respect of UK or offshore tax affairs, and to all dealings they have with HMRC.

HMRC does not apply this standard to Trusted Helpers.

Agents can be individuals, partnerships, incorporated companies or any form of legal entity providing tax advice or tax services. This includes:

• accountants and bookkeepers
• third party agents
• agents who only file tax returns and related documents
• agents who act on their clients’ behalf but do not provide any tax advice to clients
• legal and other professionals providing tax advice or accountancy services alongside other work
• agents advising on, or working in, offshore tax arrangements
• agents in other countries who act for clients with UK tax obligations
• agents who assist clients in making claims for any tax repayment or relief

This is not a full list.

Most agents are members of professional regulatory bodies that publish and endorse standards for behaviour, such as the Professional Conduct in Relation to Taxation (PCRT). HMRC endorses the Professional Conduct in Relation to Taxation and continues to work with professional bodies to align standards for agents and how they are enforced.

1.2 What you can expect from us

If a customer has authorised an agent to deal with us on their behalf, we will deal with that agent courteously and professionally. We want to provide agents with a service that is fair, accurate and based on mutual trust and respect. We also want to make it as easy as possible for agents to get things right.

The HMRC Charter and the HMRC agent Policy Statement set out the service and standard of behaviour that agents should expect when interacting with us.

1.3 What we expect from you

All agents covered by the standard should meet the expectations set out in section 2.

Agents involved in any capacity in tax planning arrangements should also meet the expectations set out in section 3.

2. The standard

All agents should maintain high standards that promote tax compliance.

2.1 Integrity

We expect agents to be straightforward and honest. This includes to:

• provide HMRC with relevant information when asked or when appropriate
• provide clients relevant and material information before, during and, when necessary, after their engagement
• share relevant information with other agents acting for the same client that they may need to see, for example, an agent acting for a client in relation to a specific relief should share details of their work to the agent who is compiling the same client’s tax return
• not suggest or imply in any way that HMRC endorses them as an agent or that the agent is part of, or acting on behalf of, HMRC
• make the identity of the agent or business clear, if known by a trading name or shortened version of the legal name

2.2 Professional competence and due care

We expect agents to:

• maintain correct and up-to-date knowledge of the areas of tax that they deal with
• work to prevent errors in their clients’ tax calculations or claims and avoid including figures in returns or claims which are unsubstantiated or speculative
• keep contemporary records of what they advise their clients and when they advise it
• advise their clients to take steps to set matters right when inaccuracies in their tax affairs are found — if the client is unwilling to correct matters, the agent should consider ceasing to act for them — if the agent continues to act in such cases, this could risk enabling tax evasion that may be subject to criminal investigation
• maintain the security of client information they hold
• take reasonable steps to make sure any third-party input used in the course of acting for a client (such as software or specialist advice) provides accurate results and complies with the client’s tax obligations
• report suspicions of tax fraud or evasion to HMRC

2.3 Professional behaviour

2.3.1 Legal compliance

Agents must:

• make sure their own tax affairs are correct and up to date, which includes keeping to Time To Pay arrangements that are in place
• comply fully with tax law and regulations relating to their professional activity, including registering under, and adhering to, the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 — this includes reporting any relevant convictions the agent has received under schedule 3 of that legislation
• comply with the requirements of UK information law in the General Data Protection Regulation, Data Protection Act 2018
• comply with other relevant law and codes, for example, the Consumer Rights Act, the Consumer Protection from Unfair Trading Regulations, and the code drafted by the Committee of Advertising Practice
• submit Suspicious Activity Reports to the National Crime Agency in accordance with the Proceeds of Crime Act 2002

2.3.2 Interaction with HMRC

We expect agents to:

• fully co-operate with all HMRC investigations and enquiries
• deal courteously and professionally with HMRC staff
• comply with HMRC online services terms and conditions when they use HMRC’s online services, including keeping online access and HMRC account credentials safe from unauthorised use at all times
• never ask any client to share their Government Gateway user ID and password (or digital certificate) with them, and only access client data by getting authorisation and viewing it through their online agent services account
• use HMRC prescribed forms, or include all the information that the relevant HMRC form requires

2.3.3 Interaction with clients

From 15 March 2023, assignments of Income Tax repayments by a taxpayer to their agent will have no legal effect and HMRC will not be bound by them.

The concession, where we accepted assignments received after 15 March 2023 as if they were nominations, has now ended. We will not accept any assignment of an Income Tax repayment received on or after 20 July 2023. Where there is no valid nomination present, we will repay the taxpayer directly.

In the case of a nomination, a taxpayer remains the person legally entitled to the repayment. We will issue the repayment to the taxpayer’s nominee at our discretion. This is different from any contract that the taxpayer may have entered into with the agent.

The taxpayer may also withdraw their nomination at any time before we issue the repayment. The taxpayer can make a nomination by completing the appropriate authorisation on the return, or the appropriate form.

We expect agents to:

• offer a period of at least 14 days during which a client can cancel any agreement entered into, if the services provided will take longer than 14 days to deliver — if the entire business relationship lasts for less than 14 days, then there is no expectation from HMRC for a minimum cooling-off period
• have clear terms of engagement with their clients and confirmation that the client understands and accepts them

Agents must make sure all communications and advertising material are fair, clear, accurate and do not mislead or conceal material facts. Agents should provide a clear charging or fees structure.

Before the terms of engagement, or any form of contract are agreed, agents should make sure that the client understands:

• how the agent is to be paid for their services
• how any repayment of tax owed will reach the client and what conditions apply (if any)
• details of deductions that will be made by the agent from any repayment the agent handles for the client
• nominations for repayments can be withdrawn by the client at any time before the repayment is made, and HMRC has the discretion not to make payments to a nominee
• the rights that both agents and their clients have, to end the arrangement early or individually

Agents should agree the terms of engagement in writing before starting to act for the client.

2.3.4 Additional needs of clients

HMRC encourages agents to make the services they provide available and accessible to all consumers equally by identifying customers needing extra help and providing extra support and reasonable adjustments as appropriate, for example:

• consider the needs of blind or partially sighted customers
• using clear, concise language when communicating with customers
• if the client appears anxious or overwhelmed by any tax issues affecting them, tell them help and support is available on NHS mental health services website

3. Standards for tax planning

HMRC expects agents to follow these principles in addition to the standards in section 2 when advising on tax planning.

3.1 Lawful

Agents must act lawfully and with integrity at all times and expect the same from their clients.

Tax planning should be based on a realistic assessment of the facts and a credible view of the law.

Agents should advise their clients if there is a material uncertainty in the law, for example, if it is known that HMRC’s view differs or is unknown. The risk and costs of challenge by HMRC, and any resultant court case, should be made clear to clients.

3.2 Disclosure and transparency

HMRC expects any disclosure by agents to represent all relevant facts fairly.

3.3 Advising on tax planning arrangements

Agents must not create, encourage or promote tax planning arrangements or structures that:

• set out to achieve results that are contrary to the clear intention of Parliament in enacting relevant legislation
• are highly artificial or highly contrived and seek to exploit shortcomings in the relevant legislation

3.4 Professional judgement and appropriate documentation

HMRC expects agents to exercise professional judgement in applying these standards to particular client advisory situations.

Agents should keep timely notes of the rationale for judgements exercised in seeking to keep to these requirements.

4. Monitoring and breaches

4.1 How HMRC monitors standards

HMRC collects evidence of poor agent behaviour in the course of its activities. The standard for agents sets out what we expect of agents and therefore sets a benchmark below which HMRC will consider taking action against the agent.

We are developing the way we work with agents, with the intention of better differentiating between agents according to the value they add or risks they present. As we use our data more effectively in this way, we will improve our ability to identify instances of poor tax agent standards and take appropriate action.

4.2 What happens when the standard is not followed

The majority of tax agents maintain high professional standards and add value to the tax system. For the minority that do not maintain high standards, HMRC has several powers to address poor practice which it uses in line with the principles set out in How HMRC works with tax agents.

Agents who do not follow the standard are considered to be in breach of it. HMRC has a range of different approaches, policies and powers to deal with breaches of the standard.

For more information, read ‘Raising standards in the tax advice market — HMRC’s review of powers to uphold its standard for Agents’.

In most cases of poor agent behaviour HMRC will seek to work with the agent to resolve any difficulties first.

If the agent does not respond to HMRC’s engagement, or if the issue is serious enough to need a strong response straight away, HMRC will seek to take stronger action.

The options may include:

• blocking access to HMRC’s agent services
• dishonest tax agent conduct notices, with the potential for further penalties and publication
• criminal investigation if an offence is suspected
• refusing to deal with an agent altogether

When appropriate, relevant professional bodies will be informed directly about misconduct by their members in a Public Interest Disclosure.

5. How HMRC and professional body standards are related

It is estimated that around 65% of agents are members of professional bodies, many of which set out standards expected of their members.

The HMRC standard for agents does not override legal professional privilege or professional duties set by relevant professional bodies.

HMRC works with professional bodies to align approaches to dealing with breaches of professional standards.

5.1 Professional body standards for their members

The largest accountancy and tax professional bodies apply a standard known as the Professional Conduct in Relation to Taxation. Other professional bodies have their own codes of ethics that they require members to follow.

Professional body codes of ethics set out the fundamental principles and standards of behaviours that all members, affiliates and students of those professional bodies must follow.

HMRC expects professional body members to follow their body’s code of ethics. We expect all agents who interact with HMRC to keep to our standard, regardless of professional body membership.

If agents meet their professional body’s code of ethics, however, the HMRC standard for agents should not place further requirements on them.

5.2 The Professional Conduct in Relation to Taxation fundamental principles

Three of the five fundamental principles in Professional Conduct in Relation to Taxation are repeated in HMRC’s standard, these are:

• integrity
• professional competence
• due care and professional behaviour

The maintenance of these is essential to the relationship between agents and HMRC.

The two principles not specifically covered by HMRC’s standard are objectivity and confidentiality.