Software and HMRC duties for agents and bookkeepers

What HMRC now asks of a paid agent

The starting point is registration, and HMRC frames the test around what you do rather than what you call yourself:

If you interact with HMRC about someone else’s tax affairs and get paid for it, we consider you to be a tax adviser. This means you’ll need to register for an agent services account.

GOV.UK says that applies even if you work as a registered sole trader, and adds that if you already have an agent services account, you will not need to register again.

Registration rests on anti-money-laundering supervision, so the order matters. You must provide evidence that your business is supervised for anti-money laundering, either by HMRC or by one of the supervisory bodies. HMRC also says this about timing:

You need to have approved anti-money laundering supervision in place before you apply for an agent services account. If you’ve already applied without being approved, we will reject your application.

The guide to registering as a tax adviser sets out the windows, the conditions and the sanctions, and the guide to anti-money-laundering supervision covers who supervises a practice and what checking a client involves.

What MTD for Income Tax adds

For MTD clients the account comes first. You will need an agent services account to use Making Tax Digital for Income Tax. Your existing client authorisations for Self Assessment are recognised for Making Tax Digital for Income Tax. Remember, you will need to be authorised to act on your client’s behalf before you sign them up for Making Tax Digital for Income Tax. HMRC sets out the whole sequence for agents in seven steps:

1. Work out your client’s qualifying income
2. Find out if and when your client needs to use Making Tax Digital for Income Tax
3. Apply for an agent services account
4. Add your client authorisations
5. Get compatible software
6. Sign up your client for Making Tax Digital for Income Tax
7. Use Making Tax Digital for Income Tax

The guide to acting for clients under MTD follows those steps from the practice’s side, including the digital handshake and how main and supporting agents share the work.

The kinds of software a practice uses

A practice deals with software on several fronts: the MTD products its clients use, the way it checks who a new client is, and the supervisor it answers to. GOV.UK keeps an official list for each. None of those lists shows prices or ranks products, and we have not yet checked practice software ourselves, so this section names no product.

For the client-facing products, Acrenvo’s own comparison of MTD software shows prices and the dates we checked them, and the software selector narrows the list for one client’s setup. The guide to MTD software for agents sets out what GOV.UK says the software must do, and the guide to software for a mixed client list explains how to use both across a practice.

Guides in this section

These guides are for bookkeepers, accountants and tax advisers who deal with HMRC for clients, and who choose or support MTD software for more than one client at a time.