Fraud fears see HMRC ramp up adviser burden

Fraud prevention moves have led to HMRC demanding more client information
upfront if advisers want to be recognised as authorised agents for
self-assessment applicants.

However, in the run-up to the 31 January self-assessment deadline, advisers
have warned any problems must be communicated immediately after advisers submit
the applications, known as 64-8 forms.

HMRC now requires either a National Insurance and Unique Taxpayer Reference
numbers in advance to ensure applicants are legitimate taxpayers in efforts to
minimise the risk to the taxman and advisers,
the agency
said.

Previously, the 64-8 forms were accepted if the UTR number was still pending,
but HMRC has now warned advisers applications received from the start of
December must have either the NI number or UTR included.

“HMRC apologises in advance for any inconvenience that this may cause but
hopes that tax agents understand the steps needed to reduce the risk of fraud,”
the taxman said.

John Whiting, tax policy chief at the CIoT said: “In many ways it’s perfectly
understandable in their efforts to tighten up their systems with the various
fraudulent attacks HMRC have been under.

“The concerns are over timings – if people submit a 64-8 for a new client who
has come to them to get sorted out in time for 31 January , any problems HMRC
have need to get sorted and communicated immediately.

“We don’t want agents carrying on blissfully unaware that the 64-8 hasn’t
been accepted – so we do want HMRC to ‘bounce’ any 64-8s they have problems with
straightaway so that they can be sorted.”

The new rules relate to taxpayers including new company directors, those
receiving income from land and property in the UK and the self-employed.

Richard Mannion, national tax director at Smith & Williamson said, “To be
fair HMRC have made strenuous efforts to improve the time taken to deal with
[64-8 documents] over the last year and those efforts are just beginning to bear
fruit.

“So it is a shame that they seem to have been blown off course by people
attempting to defraud the system.

“Personally I understand that the system has had to be tightened up in
response, but that understanding could be sorely tested if I am prevented from
taking urgent action for a new client particularly around the 31 January
deadline.

“What HMRC need to do is build in a safety net so that the systems for
registering agents and for registering taxpayers for self assessment can be
slipped into overdrive if required for deserving cases.”