Fri, 1 Jul 2011

New ‘tax agent’ rules cause concern

An HM Revenue & Customs consultation has caused concern among payroll professionals over whether they will be unable to act as ‘tax agents’ in the future.

The document, ‘Establishing the future relationship between the tax agent community and HMRC’, seeks opinions on how best to formalise ‘tax agents’ interacting with HMRC and suggests all ‘paid agents’ should enrol with the department.

But the consultation does not identify payroll managers’ activity as included in the term ‘tax agent’, which has sparked fear that if proposals go ahead, payroll professionals will be unable to speak to the Revenue directly.

Simon Parsons, director of payments, benefits & compliance strategies at Ceridian, said: ‘Employers often act as agents for themselves, where there are multiple PAYE schemes in operation, or when they assist other subsidiary or non-related businesses by accepting a bureau provision relationship to process payrolls.

‘Potentially unintended results [of the consultation] may apply if the position of employers acting on behalf of their employees, or equally payroll service companies acting on behalf of their clients in relation to PAYE matters, fall under the same proposals.’

Matt Boyle, research assistant at Research4PAYE, agreed the proposals could lead to unfairness. ‘An employee who has their payroll dealt with by an HMRC approved agent could have a problem corrected by the agent.’

An HMRC spokesman said: ‘The current rules for someone acting on behalf of someone else in relation to their tax affairs can be complicated and onerous. Looking at the future of the relationship between HMRC and the tax agent community we will ensure those who are appointed to act on behalf of someone will be able to do so in a way that best suits their relationship.’