Agent authorisation for Making Tax Digital (MTD)

HMRC has published new guidance Authorise new clients for your agent services account (ASA).

Although this guidance is new, the ASA authorisation service to which it refers has been available for some time and the following points are worth emphasising:

  • Client authorisations that are in place in the ‘old’ agent portal (online agent authorisations for VAT and income tax self assessment and 64-8s for income tax self assessment) continue to be recognised for MTD. This is the case so long as the agent has linked the government gateway user ID for the old agent portal to the ASA (the ‘Copy across more VAT and self assessment client authorisations’ service in the ASA).
  • For new MTD for VAT clients, agents can choose to use either the new ASA authorisation process or the online agent authorisation process for the old agent portal. The dynamic nature of the link between the ASA and the old agent portal means that the old agent portal authorisation will be recognised in the ASA and for MTD for VAT.
  • For MTD for VAT the new authorisation service is available only where the client is already signed up to MTD for VAT.
  • The major advantage of the ASA agent authorisation service is that it does not involve an authorisation code being sent in the post to the client who then has to pass that on to the agent. The new process allows authorisation to be put in place very quickly.
  • The disadvantage of the ASA agent authorisation service, for some clients, is that to accept the agent’s invitation to be authorised the client has to click on a link which the agent emails to them and then has to sign in to their business tax account to complete the authorisation. In this respect the process differs from the sign up to MTD for VAT process; the sign up process asks the client to confirm their email address, does not require the client to sign in to their business tax account and is completed whether or not the client clicks on the link to confirm their email address.

The Tax Faculty has received some feedback on the new authorisation process from members and understands that there may be a current issue with using it for some sole trader clients (we will publish further details when the position is clearer). Please feedback your experiences of the ASA agent authorisation service to The Tax Faculty is concerned about what seems to be a move towards clients needing to use a digital tax account to authorise a new agent and has raised this general issue with HMRC.