Guidance

The HMRC standard for agents

Updated 17 May 2024

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 (you should also read information about HMRC’s approach to working with tax agents)

The HMRC standard for agents does not replace:

• anything in law
• HMRC guidance

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

The standard was first published in February 2016. It was updated in 2018 and 2023. Updates are part of HMRC’s ongoing work around raising standards in the tax advice market.

1.1 Who the standard is for

The standard sets out HMRC’s expectations of all individuals and businesses who are tax agents. It does not apply to trusted helpers.

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 tax affairs or offshore tax affairs with potential UK tax implications. It applies to all dealings agents have with HMRC.

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

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 dealing with, any income from abroad received by UK resident taxpayers
• agents advising on, or working in, offshore tax arrangements with potential UK tax implications
• 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.

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. HMRC can set aside an authorisation and not deal with an agent if there is a reason not to do so.

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 HMRC’s approach to working with tax agents 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 4. Standards for tax planning are specifically covered in section 4.4.

Agents should also take into account:

• any relevant statutory or legal obligations and requirements
• HMRC’s compliance guidance

2. How HMRC and professional body standards are related

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

HMRC works with professional bodies to make sure there is a consistent approach to deal with breaches of professional standards.

2.1 Professional body standards for their members

The largest UK accountancy and tax professional bodies use guidance which applies the principles of their codes of ethics in a tax context. This is known as the Professional Conduct in Relation to Taxation. Other professional bodies have their own standards or codes of ethics that they require members to follow.

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.

2.2 The Professional Conduct in Relation to Taxation fundamental principles

HMRC recognises and endorses the Professional Conduct in Relation to Taxation guidance.

HMRC’s standard focuses on 3 of the 5 fundamental principles found in the Professional Conduct in Relation to Taxation. These are:

• integrity
• professional competence and due care
• professional behaviour

Maintaining high standards in these 3 principles are essential to the relationship between agents and HMRC.

The 2 principles not specifically covered by HMRC’s standard are objectivity and confidentiality.

3. Upholding the HMRC Standard

3.1 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.

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.

3.2 What happens when the standard is not met

HMRC will consider taking action against agents who do not meet the standard. This is considered on a case-by-case basis.

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 HMRC’s approach to working with tax 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.

HMRC has a range of different approaches, policies and powers to deal with agents who are not meeting the standard. 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.

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

4. The Standard

All agents should maintain high standards that promote tax compliance.

4.1 Integrity

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

• advising HMRC if they are unable to provide relevant information because client permission has not been received
• responding promptly when HMRC uses information powers
• not suggesting or implying in any way that HMRC endorses them as an agent or that the agent is part of, or acting on behalf of, HMRC
• making the identity of the agent or business clear, if known by a trading name or shortened version of the legal name

4.2 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 where client confidentiality does not apply (read the legal requirement in section 4.3.1)

4.3 Professional behaviour

4.3.1 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

4.3.2 Interaction with HMRC

We expect agents to:

• work constructively with HMRC in investigations, enquiries and in formal and informal requests for relevant information — relevant information is determined by the context and what is reasonably required where it could affect a person’s tax position
• 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
• only access client data in HMRC systems by getting authorisation and viewing it through their online agent services account
• use HMRC forms where they have been prescribed or mandated or, if the agent is using their own forms, include the same information that the relevant HMRC form requires

4.3.3 Interaction with clients

Agents must:

• never ask any client to share their Government Gateway user ID and password (or digital certificate) with them
• make sure all communications and advertising material are fair, clear, accurate and do not mislead or conceal material facts

Agents should:

• make their terms of engagement for clients as clear and simple as possible, in particular:
  • 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)
  • provide details of deductions that will be made by the agent from any repayment the agent handles for the client
  • confirm that 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
  • make clear the rights that both agents and their clients have to end the arrangement early or individually
• agree the terms of engagement before starting to act for the client, and get confirmation that the client accepts them
• offer clients a reasonable cancellation period during which they can cancel any agreement they have entered into
• provide clients with relevant and material information before and during their engagement
• make relevant documents and information from former clients available to their new advisers when they are entitled to see them, unless there are legal reasons why this cannot be done

4.3.4 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

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

4.4 Tax planning

4.4.1 Lawful

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

Agents should:

• base tax planning on a realistic assessment of the facts and a credible view of the law
• 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
• advise clients clearly on the risk and costs of challenge by HMRC, and any resultant court case

4.4.2 Disclosure and transparency

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

4.4.3 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

4.4.4 Professional judgment 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 their actions when seeking to follow these requirements.