This week's opinion: 25 July 2019

All of us who have been in professional practice know the importance of the processes that have to be observed when one agent takes over from another. The letter we write to the previous agent is a vital part of the process of ensuring that there is no misunderstanding about respective responsibilities. Taking on a new client without professional courtesy letters being exchanged can be a breach of standards (see PCRT para 4.3.3).

This was an issue in Wheeler (TC7249) (tinyurl.com/tc7249). New agents had been appointed because the former ones had not been able to progress matters. It took two months for the new agents to receive professional clearance and this contributed to further delays. HMRC contended that this was ‘merely courtesy protocol between agents and not something that is included in HMRC processes or recognised in tax legislation’. It further said that ‘while the new agent may have felt bound by convention, the appellant was free to act as he wished, for example the new agent could advise the appellant to contact HMRC himself’. The delay was not entirely caused by the handover period but the extra two months were enough to make the return more than six months late. The tribunal held there was a reasonable excuse and cancelled all but the initial £100 penalty.

I find HMRC’s argument alarming. The Charter states that a taxpayer can appoint somebody else to deal with HMRC on their behalf. HMRC also insists, rightly, that agents should be properly authorised before the department will deal with them. It wants agents to act professionally and should therefore recognise that obligations flow from that. I hope that HMRC’s stance in this case was a one-off.

If you do one thing...

HMRC’s annual report has been published (tinyurl.com/hmrcac201819). The section on dispute resolution is worth reading, in particular the statistics on page 107.