Appointing an agent for digital tax reporting

Appointing an agent for digital tax reporting needs the correct HMRC authorisation and an agreed software workflow. Confirm which taxes and activities the agent covers, who maintains the records and who approves each submission.

Agent access, software invitations and the business’s own account recovery are different arrangements. Keep each one documented and avoid sharing personal credentials.

Define what the agent will do

List the taxes, businesses and reporting tasks covered by the proposed engagement. Distinguish bookkeeping, quarterly updates, annual returns, VAT and correspondence about earlier periods. An agent may act for one purpose without taking responsibility for every tax matter. Put the scope in writing so the client knows which records to supply and the agent knows which submissions and deadlines it is expected to manage.

HMRC authorisation allows an appointed person to deal with the relevant matters through the applicable process. It is separate from a commercial engagement and from access to the client's accounting software. Follow the required method for the service involved and retain confirmation. An invitation to a bookkeeping account does not, by itself, establish that HMRC recognises the adviser as authorised for that tax. ^[1]

Keep the client's own account under control

The client should retain appropriate access to their own tax and business records, including recovery arrangements. Do not share personal credentials as a shortcut to agent access. Use the supported authorisation and permission process, with named accounts where applicable. The business should be able to retrieve its information and understand who is acting if the usual adviser or staff contact becomes unavailable.

Record the email addresses and contact details used for important notices, and make sure they reach the responsible person. A notice sent only to an abandoned mailbox can leave both client and agent unaware of an action required. Review the arrangement when an employee leaves or the firm changes its administrator. Account recovery and correspondence routing deserve separate checks from whether the agent can currently submit a report.

Agree the software and evidence workflow

Identify where digital records are maintained and how the agent will review them. Confirm whether the client enters transactions, a bookkeeper maintains the ledger or the agent provides a managed service. Set an information deadline that leaves time for questions and approval. Without that agreement, both sides can believe the other is checking a bank feed or resolving uncategorised transactions before a filing date.

Give the agent the permissions needed for the agreed task and identify which changes require client approval. A read-only review role may be appropriate for one engagement, while another requires controlled editing or submission access. Keep a record of material adjustments and their rationale. The client should be able to distinguish an agent's proposed correction from an approved change already reflected in a submitted return.

Make approval and submission evidence explicit

Agree what the client will review before a report is submitted and how approval will be recorded. Provide the important figures and assumptions in a form the client can understand. Approval is not meaningful if it consists only of a link to a dashboard with no explanation of unresolved matters. The agent should know whether an outstanding question prevents submission or is assigned to a separate later task.

After submission, retain the acknowledgement and make the completed status available to the client. Keep filing and payment responsibilities distinct, including who will monitor the relevant account and settlement. An agent may prepare or submit a return without being responsible for releasing the client's bank payment. That division should be clear before the deadline rather than discovered after an unpaid balance appears.

Review and end authority deliberately

When the engagement changes, update the scope and relevant permissions. If another adviser takes over, identify the final return and any historic corrections still handled by the outgoing firm. Remove authority and software access that are no longer needed through their respective processes. Do not assume terminating the fee agreement automatically revokes every connection to HMRC, accounting tools or shared document folders.

Use Software access when changing accountants for software access during an accountant change and Making Tax Digital readiness review to discuss a digital tax-reporting engagement. State the taxes and activities involved, current software and upcoming deadlines. A clear initial scope can then identify the appropriate authorisation, record access, approval and submission arrangements without requiring the client to surrender control of their personal account.

Keep a short engagement record showing the authorised services, start date, key deadlines and handover provisions. Review it when a new trade or property activity is added. This helps prevent an old narrow engagement from being treated as automatic coverage for a materially different reporting workload or a new HMRC enquiry.

Illustrative scenario

A landlord asks an accountant to handle MTD updates while retaining daily bookkeeping. Their agreement specifies the review cutoff, query process and final approval before the accountant submits.

Preparation checklist

• Confirm tax-service scope
• Use official authorisation
• Set software roles
• Agree approval and deadlines