Budget 2009 - Working with tax agents

HMRC have issued a consultation, for which the closure date for representations is 7 August 2009.  It could get bloody.

HMRC are touting the notions that it monitors tax agents (expanding on the use of powers awarded to HMRC in 2005) and that agents, and their services, might be need to be defined, registered, and regulated.  With the very idea that professional tax advisers be subjected to any form of accreditation by the Revenue, and no matter how benign, being repugnant to many, it will certainly be interesting to see how this pans out. 

The consultation could possibly force the hand (and, arguably, not before time) of the different professional institutes to act on behalf of their members' interests.. One can see that this might quickly move towards discussion of a full blown regulation agenda if the Revenue are to be put back in their box.  Those unqualified advisers, which the Revenue estimates to represent a surprisingly high 20% to 30% of the market, might find themselves without a voice and be marginalised in a way similar to many financial advisers were a generation ago.   

We will have to wait to see how the consultation proceeds but it has the potential for dominating the professional press for months to come.  Our guess is that the sentiments expressed by the Revenue are not going to go away and it will only be a case of what shape the changes to the market will take.  The oft used expression of competency in the consultation does suggest that this tax agent agenda might , before long, find itself folded in to the penalty mitigation issue now present in the FA 2007 provisions, and over which we speculated here.