The agent’s role in an employer compliance check

By Tolley in association with Lesley Fidler of Baker Tilly

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

  • The agent’s role in an employer compliance check
  • Engagement terms
  • Form 64-8
  • 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 employer compliance check. This guidance note considers that engagement predominantly from thepoint of view of theagent. The agent’s role is usually to ensure that theemployer, within thebounds of ethical and legal constraints, gets as good a deal as possible in resolving any issues that thecompliance check identifies.

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

  • minimising thecost for their clients in duties, interest and penalties
  • minimising thecost in professional fees for their clients (which may include ensuring that theterms of any fee insurance scheme are met)
  • 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 theirregularities that are identified and whether they might have any potential liability for incorrect advice in thepast or for failing to advise on a particular area. Since agents cannot be aware of every action by their employer-clients, theterms of any ongoing engagement, separate from thecompliance check work, should be drafted carefully to ensure that theagent has not assumed liability for advising theemployer on theemployment taxes aspects of every act or omission of theemployer since theagent is most unlikely to be aware of these.

Engagement terms

Agents who are members of professional bodies generally have their own guidance on theneed for specific, agreed terms on which they are engaged to act for theemployer in connection with an employer compliance check. As employer compliance checks are not part of a recurring compliance cycle, theexisting engagement letter may not cover work connected

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