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HMRC reconsiders cutting paper tax copies

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HM Revenue and Customs (HMRC) is to rethink its decision to cut down on sending tax agents copies of some of the mail which is delivered to clients.

The tax authority had announced in September that, in an effort to shave administrative costs, they were planning to reduce the number of paper tax copies posted to accountants.

The move attracted criticism as the time, with the Chartered Institute of Taxation (CIOT) describing it as “short-sighted”.

Under the plan, copies of PAYE coding notices (P2s) and tax calculations (P800s) were not to be sent to tax agents in future.

The CIOT argued that the move would actually mean extra work for HMRC and could lead to additional costs that outweighed any savings.

Now HMRC has said that, for the time being at least, agent copies of forms P800 (tax calculation), SA250 (entry to self-assessment letter) and SA251 (exit from self-assessment letter) will be kept.

Agent copies of P2s (PAYE coding notices) will still be withdrawn with immediate effect, but the form sent to taxpayers will include a message suggesting that they show it to their tax agent or adviser.

HMRC will reinvest some of the savings from withdrawing agent copies of P2s towards an IT solution which will allow e-enabled agents to view P2s for their self-assessment clients online.

Procedures for two other forms – P810 (targeted review form) and SA 252 (letter to customers who do not submit an SA return but are liable to Income Tax at the higher rate) – are still being reviewed.

Anthony Thomas, deputy president of the CIOT, said: “We very much welcome HMRC’s listening to the tax profession on this issue and revising their plans.

“However, we remain disappointed that PAYE Coding Notices will no longer be sent to taxpayers’ agents. Everybody recognises that there is pressure on all government departments to find savings wherever they can. But by keeping tax agents less well-informed about their clients’ tax obligations, HMRC are likely to be faced with more queries and adjustments that might in the end cost them more than they save.

“If the initiative to enable agents to view Coding Notices online is implemented successfully, that will assuage many of our concerns. Also, given that the vast majority of the costs involved in sending information to agents come from paper, printing and postage, we hope HMRC will also look at whether sending information by email offers a possible cheaper alternative to sending it by post.”