Tax agent strategy welcomed but more needs to be done

HMRC plans to set up a new database for the enrolment of paid agents and offer them self-service facilities so that they can gain access to the Revenue's systems and make amendments to their clients' records.

Michael Izza, the CEO of ICAEW, said the new proposals will pave the way for a better working relationship between tax agents and HMRC that will not only cut costs but also improve standards of service.

However, ICAEW said that HMRC must ensure that strong data security measures are in place and that implementing these does not put an additional financial burden on smaller firms. There will need to be a reasonably high level of security to prevent fraud but this should not be so burdensome that only larger firms can implement the 'kit'. The Institute also expressed concerns over the implementation of the facility allowing agents to amend details on HMRC's systems.

Furthermore, the current proposals make no mention of whether tax advisors need to be qualified. At the moment, anybody can set themselves up as a tax agent and around 30% of agents have no affiliation with a professional body.

The money HMRC saves on its tax agent strategy should be channelled into improving customer service, according to the Low Income Tax Reform Group.

Robin Williamson, the technical director of the LITRG, said that enabling tax agents to do some of the tasks that HMRC currently does will generate cost savings but it must reinvest those savings into improved customer service.

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