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HMRC aren’t easy to speak to and unless you know the tax rules its easy to make mistakes, that’s why HMRC allow you to appoint agents to help you with your tax affairs.
To appoint an agent you use form 64-8
Form 64-8 covers authorisation for individual tax affairs (partnerships, trusts, tax credits and individuals under PAYE) and business taxes (VAT, PAYE for employers and Corporation Tax). If you’re a personal representative you can use form 64-8 in certain circumstances to ask HMRC to deal directly with an agent.
There are times when you might want extra help for example with an HMRC Compliance Visit and you can appoint a temporary agent using form COMP1.
The Comp1 relates only to the appointment of an adviser to deal with a compliance check. It does not authorise us to deal with that adviser for anything outside that check. Form Comp1 does not replace or amend any existing authorisation made using form 64-8 or the online authorisation facility, or in CITEX cases a letter giving authority for the agent to act.
The temporary authorisation can be used to:
- extend an existing authorisation, for example where there is an adviser acting for one tax under a form 64-8, and the customer wants that adviser to act for more taxes just for the purpose of the compliance check
- appoint an adviser to deal solely with the compliance check where there is no existing adviser authorisation
- appoint a ‘specialist’ tax adviser, for example in Specialist Investigation cases, just to deal with a compliance check. In such cases this will allow the existing adviser to continue to act for the customer in their day to day tax matters.
Do you need help?
High Volume Agents (HVAs) deal with large numbers of clients, often for a short time only, and make repayment claims or submit returns that generate repayments.
- provide services on a commission or ‘no repayment no fee’ basis
- target clients in a specific trade or industry, for example the construction industry
- submit high numbers of repayment claims relating to expenses incurred in their clients’ employment or trade
- receive the tax repayment as a nominee for their client
- are not members of a professional taxation accountancy body, although some of their staff may hold professional qualifications
- have little or no face to face contact with their clients as much of their business is carried out electronically.
A repayment claim can be made using any of the following
- stand alone claim by correspondence
- Self Assessment tax return
- unsolicited return.
The range of expenses claimed that results in a repayment usually include
- overnight accommodation
- cost of food
- use of home
- wife, civil partner or relative’s wages
- cost of tools
- protective or specialist clothing
- telephone costs.
Further details in CH820000
HMRC have targeted firms with as few as 30 clients! so don’t think it only applies to large scale operations
HMRC are particularly interested in claims where the expenses are more that 10% higher than the income.
An agent’s poor technical ability that puts tax at risk will generally fall into one or more of the following categories
- bookkeeping or accounting errors
- computational errors
- lack of tax knowledge or expertise
- unreasonable or untenable technical views.
HVA’s are asked to enter into a memorandum of understanding agreements which are designed to check clients are paying the correct tax, in general this is likely to result in higher tax payments.
So be careful who you ask to be you agent! your tax saving might be short lived.
Actors, singers, musicians, dancers and theatrical artists are permitted to make a deduction for agents fees under ITEPA 2003 S352.
But its more complicated than you might think based on recent cases…
Richard Madeley and Judy Finnegan (2006) SpC 547 it was only on appeal that the Special Commissioner agreed that their chat show was considered theatrical.
The Special Commissioners also thought that Bruce Forsyth and Ant and Dec qualified.
But that Quiz shows were borderline, for example they felt Jeremy Paxman (University Challenge) and John Humphry (Mastermind) didn’t qualify, but Anne Robinson (The Weakest Link) did qualify and Chris Tarrant (Who wants to be a Millionaire) was borderline.
So do you think the special commissioners would see your act as Theatrical?