Update for agents on delays with post

Through Working Together, HMRC has been working closely with agent representative bodies on concerns raised by some agents about delays with post, VAT registration and 64-8 agent authorisation. This is the latest position which we will update on an ongoing basis. We apologise for the inconvenience and difficulty that we know delays are causing for you and your clients. Providing good service is a top priority and we are taking steps to improve the situation as quickly as possible. In the meantime, please try to avoid contacting us to check on progress unless the matter is urgent as this may further extend processing times. Thank you for your co-operation.

Post

We make every effort to provide a prompt response, balancing different priorities at different times of year (for example after the SA filing peak) as best we can. However, we are aware of agents’ concerns about delays that have occurred this year and we share them. We are sorry that in some places we have not provided the service you or we would want recently and we are certainly making every effort to improve. We expect improvements to feed through over the latter half of this year.

The Department has made significant investment in new ways of working that will, when truly embedded, result in a service that exceeds our previous performance both in terms of response times and accuracy of working. These have been introduced with the support of experts in process improvement from the private sector and we are confident they will deliver the service we and you want.

Part of this new way of working is that we are trying to ensure that all customers receive a consistent service on a ‘first in/first out’ basis – rather than some having to wait much longer than others for a response to their enquiry, and that quality is consistently high. But any new process will have costs associated with change and that is what we are seeing in some of our offices at the moment. We believe that position will improve over time as the fruits of our investment pay off.

Some offices have adapted to the new ways of working better than others and some are further through the system than others, so they have refined their planning and approach to the new process. That is why performance is currently variable across our offices. In many offices we are already seeing high levels of performance; others have some way to go. We are addressing that urgently; our aim is to provide a consistent performance across HMRC and we monitor offices on an ongoing basis and, where necessary, support offices which appear to be in greater difficulty than others. For example our office in Leicester has had to deal with the new arrangements around Retirement Annuity Contracts this year and that has given them considerable additional work. We are of course giving Leicester as much help as we can.

We continue to refine our new process and at the end of September we made further refinements which we believe will get us back on track in all of our offices, including those where there are currently delays, by the end of the year.

VAT registration

The current position on VAT registration application processing is a major concern for agents and HMRC shares those concerns and is working hard, at the highest levels, to address them. We receive over 285,000 VAT registration applications each year and have a target of clearing complete and low-risk applications in 14 days, but unfortunately it is currently taking longer than this in most cases.

Several factors are in play here. VAT registration is the entry point to Missing Trader Intra-Community (MTIC) and other serious fraud, which reduced VAT receipts by an estimated £2–£3 billion in 2005/06. Obviously we must take steps to prevent such abuse of the VAT system. That includes pre-registration checks, which last year weeded out over 7,000 applications. However, there is more for us to do to target our risk checks effectively and so reduce the number of queries needing to be referred back to applicants before their applications can be processed.

Alongside that, we are consolidating VAT registration work into two sites at Wolverhampton and Grimsby. We have also seen a spike in application numbers over recent months following the Budget 2007 announcements on Managed Service Companies, and we have had some IT issues to resolve.

These factors combined have led to the drop in service standards. We do understand the problems that delays in registration can cause, and we are working hard to improve processing times. We are recruiting additional staff at Wolverhampton, and devoting more existing staff to registration activity. We have reviewed and updated our risk assessment parameters, and will do so regularly to ensure they remain targeted against fraudsters. And we have stabilised the IT issues, and will make further improvements over coming months.

We anticipate these steps will provide significant additional processing capacity and turn performance around. However the lead time for some changes, including training of new staff, means it will take time to see the improvement flowing through. We anticipate the upturn will be visible from the autumn.

We will keep agents and businesses up to date with progress. Our Application Processing Times Guide provides information on the processing times for registrations, together with advice on how to deal with VAT affairs in advance of getting a registration number. If you are involved with advising businesses seeking to register, it would be helpful if you could encourage them to look at the website information, and take account of the current timescales in their business planning.

Delays in processing forms 64-8

Last year the Central Agent Authorisation Team (CAAT) received and processed around 1.5 million forms 64-8. Since April this year the number of agent authorisations has continued to increase and CAAT are now expecting to deal with 1.7m in 2007/08. The unprecedented increase in the number of authorisations received resulted in a backlog of work and delays in getting authorisations on the system. We are sorry for any inconvenience that this may have caused. CAAT recognises the urgent need to process agent authorisation forms as quickly as possible and nearly 90 additional staff were trained and deployed to address the backlog of forms that had built up. We are now in a position where we are pleased to report that CAAT are able to process forms 64-8 within six days of receipt.

Whilst there are some exceptions where the 64-8 needs to be sent to other HMRC offices the majority can be sent directly to CAAT at Newcastle:

HM Revenue & Customs,
CAA Team, Longbenton,
Newcastle Upon Tyne
NE98 1ZZ.

Please see FAQs and more information about the exceptions that need to be sent to other offices.

Currently only 17 per cent of agent authorisations are made via HMRC’s online service and we would like to encourage agents to consider the benefits that they could gain by making online authorisations.

The Online Agent Authorisation service allows agents to use the internet to set up authorisations for:

  • Individuals under Self Assessment (SA) - these authorisations will also cover National Insurance (NI) and, if they are existing claimants, Tax Credits.
  • Organisations, trusts and partnerships under Self Assessment;
  • Businesses and organisations under Corporation Tax (CT).
  • Employers operating Pay As You Earn (PAYE) schemes.

Key Benefits of the service for agents include:

  • faster processing of authorisations with automatic updates of SA and CT systems
  • reduction in errors, particularly in correct allocation of clients to relevant agent record
  • improved audit trail and visibility of the authorisation process to the agent
  • ability to set up authorisations at a service specific level
  • management of authorised client lists and the ability to deregister clients for whom you no longer act.

Please see further information about online agents.

For the future we are working closely with agents from the Working Together Steering Group who visited the processing team in Longbenton in September to identify what further improvements we can make to the authorisation process. An outcome of this was identifying a number of straightforward things that agents can do now to improve the authorisation process:

  • Do not send forms 64-8 to local offices unless it is specified as one of the exceptions that CAAT cannot deal with. Currently over 40 per cent of the forms that CAAT receive come via local HMRC offices and this can invariably build in significant delays.
  • Use the latest version of the form which can be downloaded and only tick the boxes that are necessary as this will help CAAT process forms more quickly.
  • Ensure Agent codes, reference numbers, NINO and UTR are recorded on all forms submitted.
  • Standardise handwriting on all forms to ensure that they are completed in block capitals.
  • Use on-line process instead of the paper 64-8 route.
  • Ensure forms are completed correctly.
  • Inform HMRC in advance when bulk processing is required.
  • Some agents choose to submit duplicate 64-8s for all of their clients on an annual basis to ensure their authorisations are up to date. This only adds to the CAAT workload and will delay the processing of new authorisations. We would like to recommend the online option that is mentioned above to provide agents with direct and speedy control in relation to the maintenance of their client lists.