The new HMRC Agent Services Account

Monday, June 4, 2018

This article is based on the information available at the time of writing, but the reader should be aware that HMRC’s plans for the implementation of Making Tax Digital are subject to change. HMRC has limited resources, and the changes in our taxation system as a result of Brexit means that those resources may need to be redirected.

Mel Stride, Financial Secretary to the Treasury, makes no bones about Making Tax Digital – it is going to happen. Although there may be delays with the implementation of Simple Assessment and real-time PAYE coding, as well as quarterly reporting for ITSA[1], it’s only a matter of time. A prudent accountant will need to be familiar with the proposed changes in HMRC’s agent services to ensure a smooth transition when that time comes.

A recording of HMRC’s webinar on Agent Services and the pilot scheme can be found here. Scroll down to “Making Tax Digital for Business” and click on the “Income Tax pilot online meeting” link, which will take you to a registration page.

In essence, instead of the present system where we have different agent codes for each head of tax (e.g. PAYE, Self Assessment, Corporation Tax etc.), we will have a single Agent Services Account which will give access to all available services for which we register. After setting up an Agent Services Account using the credentials for one service, authorisation for other services can be migrated across. HMRC takes its security and confidentiality obligations very seriously, so there are verification procedures to work through. This will involve 2SV[2] but this will not be required each time the agent uses the service.

The new Agent Services Account will have a new User ID and a new Gateway Agent ID; these strings of numbers and letters will become familiar with use but there will be a facility to print them during the setup process. The old Government Gateway credentials will remain in place. Having set up the new Agent Services account, the next step is to copy across all the existing “client relationships” (which most of us refer to as “authorisations”) to the new account; this is a one-off, one-click process, although it requires entry of the old Government Gateway credentials.

One benefit of the new Agent Services Account is that it does away with the old “pin in the post” new client authorisation process. Instead, the agent requests authorisation online, receives a link which is emailed to the new client, and the new client completes the authorisation through their own Government Gateway Account.

At the time of writing the scheme exists in pilot form, and it’s important to note that it is taxpayers, not agents, who can enrol for the pilot scheme; we can’t enrol a block of clients to take part. It’s equally important to note that the “old” and “new” schemes will run in parallel for the foreseeable future. Signing up for a new agent Services Account does not mean that we will lose our existing Government Gateway access.

There is a popular saying; “the best time to plant a tree is twenty years ago; the second-best time is now”. The benefits we get from a mature tree – shade, shelter, fruit – take time to appear. Signing up for a new Agent Services Account does not mean that you must take part in the pilot scheme, nor that you will have to use the new ASA exclusively, but now is the time to at least become familiar with it.

With about a year to go before we submit our first VAT Returns under MTD, many of us will be assisting our clients in digitising their records, reviewing our existing software packages and preparing ourselves and our staff for the transition; all this in addition to the work we routinely do anyway irrespective of MTD.

There is broad consensus within the accountancy and bookkeeping professions that there will be an increased demand for professional assistance from taxpayers who currently deal with their own VAT records and reporting when MTD-VAT becomes mandatory. From the commercial point of view it makes sense to be fully up to speed with all aspects of MTD-VAT to be able to respond to this need. Human resources and software are beyond the scope of this article, but spending some time now to set up a new Agent Services Account will bring rewards in the future.

At the time of writing, HMRC has yet to launch its campaign to raise awareness of MTD-VAT among the taxpaying community, opting instead to provide updates to agents to enable those agents to prepare themselves and their clients for the recording and reporting changes. For this reason alone it makes good sense to keep up to date with HMRC’s “Talking Points” webinars; you can sign up for alerts here and HMRC’s tax agent blog can be accessed here.

On a similar subject, it seems likely that future direct communication between HMRC and taxpayers will make increasing use of the Personal Tax Account and Business Tax Account. Again, it makes good sense for us to encourage our clients to activate these accounts[3].

The CPAA will continue to keep its members aware of MTD developments via its seminars and this magazine, and will also continue to represent its members’ views by responding to consultations and taking part in discussions and meetings with HMRC.

So in summary, three things to do now:

  • Sign up for an Agent Services Account
  • Encourage clients to activate their PTAs and BTAs
  • Sign up to receive alerts from HMRC

Mighty oaks from little acorns grow – enjoy your planting!


[1] Self Assessment for Income Tax

[2] Two-step verification, receiving and inputting a one-off code to authenticate the user

[3] Every taxpayer has a Personal Tax Account; it just needs activation here