For many businesses, an accountant is an essential part of the team. From managing tax returns to dealing with HMRC, having the right support can make running a business that little bit easier.

But when you authorise an accountant or tax agent to act on your behalf, what exactly are you giving them permission to do? And where does your responsibility end?

What can an authorised agent do?

The level of access an accountant has depends on the taxes they are authorised to deal with. Depending on the authorisation in place, an agent may be able to:

• Self Assessment: Prepare and submit tax returns, claim tax reliefs and discuss your tax affairs with HMRC.

• Corporation Tax: Access company tax information and update certain company details.

• VAT: View and submit VAT returns, check liabilities and payments, and communicate with HMRC about your VAT affairs.

• Construction Industry Scheme (CIS): Access relevant returns and information about subcontractor payments and deductions.

• Making Tax Digital for Income Tax: Help manage digital records, submit quarterly updates and complete the relevant tax return.

• Tax credits: Access relevant information and communicate with HMRC about your claim, where authorised.

An agent's access will depend on the relevant authorisation and HMRC service. It is therefore worth understanding which areas of your tax affairs your accountant can manage on your behalf.

Who is responsible for getting it right?

Authorising an accountant to deal with your tax affairs doesn't automatically transfer all responsibility to them.

As a taxpayer, you remain responsible for ensuring that your tax obligations are met. This includes providing accurate information, checking that your accountant has everything they need and reviewing information where appropriate before it is submitted to HMRC.

If a penalty is issued for a late submission, late payment or an error, you may be able to appeal if you have valid grounds. However, relying on an accountant is not automatically accepted as a reasonable excuse. The circumstances of the case matter, including the nature of the issue and the steps taken to meet your obligations.

The best approach? Keep communication open, respond promptly to requests for information and raise any questions as soon as they arise. Working together helps reduce the risk of avoidable mistakes.

How do you authorise an accountant?

HMRC offers different ways to authorise an agent, depending on the tax service involved.

In many cases, you can use HMRC's online services to appoint an agent for a particular tax. Where online authorisation isn't available or cannot be completed, a paper form may be appropriate.

For example, form 64-8 can be used to authorise an agent for certain tax matters. HMRC also has a separate temporary authorisation process for situations involving disclosures during compliance checks.

The correct route depends on the tax involved and the type of access required, so it's best to check the relevant HMRC guidance before completing a form.

What if HMRC opens a compliance check?

Sometimes HMRC may contact you to check that the correct amount of tax has been paid. If you need an accountant to help with a particular disclosure or compliance matter, a temporary authorisation may be suitable.

This can allow HMRC to discuss the relevant disclosure with your adviser for the specified tax years or periods, without replacing an existing permanent authorisation.

If you receive a compliance check letter, don't ignore it. Contact your accountant promptly so you can establish what HMRC needs and agree on the next steps.

Can you give an accountant limited authority?

Yes. In some circumstances, you may be able to give an adviser limited authorisation to help with a specific tax matter without granting them full online access to your tax records.

This can be useful if you only need assistance with a particular HMRC query or form. The arrangements depend on the type of authority required, so check with HMRC which option is appropriate.

Positive advice

An authorised accountant can take much of the stress out of managing your tax affairs, but good communication is key. Make sure you understand what your accountant is authorised to do, provide information promptly and keep an eye on important deadlines.

At Quove Accounting, we're here to help you understand your responsibilities and make dealing with tax as straightforward as possible.

Need a hand with your tax affairs? Get in touch with the Quove team to find out how we can help.

Categories: Insights