Employer compliance check ― role of the agent

By Tolley in association with Lesley Fidler

The following Employment Tax guidance note by Tolley in association with Lesley Fidler provides comprehensive and up to date tax information covering:

  • Employer compliance check ― role of the agent
  • Engagement terms
  • Forms 64-8 and COMP1
  • The opening letter
  • The initial visit
  • Making a payment on account
  • Interest on late-paid income tax and NICs
  • Tax relief for settlement payments

The employer may engage an agent or adviser to help handle an HMRC employer compliance check. This guidance note considers that engagement predominantly from the point of view of the agent. The agent’s role is usually to ensure that the employer, within the bounds of ethical and legal constraints, gets as good a deal as possible in resolving any issues that the compliance check identifies.

It is worth remembering that agents have to balance the following, possibly competing, requirements:

  • minimising the cost for their clients in duties, interest and penalties
  • minimising the cost in professional fees for their clients (which may include ensuring that the terms of any fee insurance scheme are met)
  • applying the relevant legislation
  • acting ethically and in accordance with guidance from their professional body
  • maintaining their professional standing with HMRC

Existing agents also need to consider what led to the irregularities that are identified and whether they might have any potential liability for incorrect advice in the past or for failing to identify or advise on a particular area. Since agents cannot be aware of every action by their employer-clients, the terms of any ongoing engagement, separate from the compliance check work, should be drafted carefully. This is to ensure that the agent has not assumed liability for advising the employer on the employment taxes aspects of every act or omission of the employer, since the agent is most unlikely to be aware of these.

Engagement terms

Agents who are members of professional bodies generally have their own guidance on the need for specific, agreed terms on which they are engaged to act for the employer in connection with an employer compliance check. As employer compliance checks are not part of a recurring compliance

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