ICAS issues its Agent Strategy
As ICAS continues to contribute to tax policy, Charlotte Barbour outlines the key points in the ICAS Agent Strategy, which details seven key principles ICAS believes should guide the agent - HMRC relationship.
1. The role of tax agents is vital to the effective operation of the UK tax system
ICAS firms play a crucial role in enabling individuals and businesses to operate successfully within the UK economy and tax system. The UK tax system would not function effectively without agents.
2. The tax system needs to be designed with agents in view
The majority of business taxpayers have agents and the relationship between HMRC and tax agents is of fundamental importance to the UK tax system. Digital transformation should lead with agent services – we are pleased to see this recognised in ‘Building a trusted, modern tax administration system’, issued by HMT/HMRC in July 2020.
3. Agents need access to HMRC staff
The impact of tax on personal and business decisions can be wide-ranging and complex. Commercial decisions are often time-sensitive and uncertainty over tax consequences is damaging. Appropriately qualified HMRC staff should be available to agents for resolution of tax issues in real-time.
4. HMRC investment decisions should take account of the wider economy
HMRC needs to be encouraged to invest in agent services. Investment decisions should be based on the economic impact on the UK economy, not evaluated on the impact within HMRC alone.
5. Agents assist taxpayers in getting their tax affairs right
The vast majority of taxpayers aim to pay the right amount of tax on time. Having an agent helps taxpayers who wish to be compliant. HMRC and agents need a good working relationship to promote taxpayer compliance.
6. Chartered Accountants are business advisers. Tax advice is not given in isolation
Chartered Accountants are trusted business advisers. Their advice balances the economic, regulatory, social, personal, business and taxation demands on the business and its owners. Tax should not be divorced from the economic realities of business life, nor should compliance for the few drive up the regulatory burden for the many.
7. Digitalisation is key
Digitalisation is key, and digital tax is a significant part of the whole. Yet, digital tax alone should not drive change. Mandated digital interaction on a short timescale is not best for business. Total digital is not a one size fits all. Different businesses need different levels of digitalisation for maximum efficiency.
Digital taxation needs to include the viewpoint of the business and the tax agent, as well as HMRC. It needs to be part of an overall streamlining of processes. Suitable, effective use of digital frees up business time for the business owner and enables the agent to give more real-time proactive advice including managing tax compliance. It yields efficiencies for HMRC.
We support the Government’s overall ambition of making tax digital.