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Many customers hire accountants or other agents such as solicitors to deal with their tax affairs. The arrangements between customers and their agents are personal and should not be judged. Whether a customer has an agent or not doesn't affect the quality of service they should receive.

Customers can claim reimbursement of costs they have paid, including fees they have paid to their professional agents, if they are additional costs as a direct result of our mistake or unreasonable delay. However, before we reimburse, we need to consider whether it is right to do so.

We do not pay for “day-to-day� costs that an agent would charge in performance of the tasks they are employed to undertake. Even if something is incorrect, providing we put things right straightaway, at the first point of contact, it can be considered a day-to-day cost.

Professional fees vary for many reasons such as location of the firm, the level of expertise or specialism offered, and the level of the person within the firm carrying out the work.

You need to consider what is reasonable to reimburse. This may or may not be the full amount customers have paid. Make a judgement, based on the merits, circumstances and complexity of each case.

Make sure that the fees you are considering relate only to additional work carried out as a direct result of our mistakes or unreasonable delay. Ask yourself these questions:

• does the customer usually use this agent?
• was the additional work done at a different level within the firm and at an appropriate level?
• was the work done at the usual hourly rate and is evidence of this available, if required, by way of invoices and/or timesheets?
• has the invoice been paid?
• was the work itself unreasonable or excessive in relation to our mistake and what was needed to correct it?

A professional agent’s charges are a matter between agent and client, but you are entitled to consider whether it is reasonable to reimburse all the charges invoiced. Reimbursement should be limited to what you consider to be reasonable and proportionate in all the circumstances, using your best estimate, where appropriate.

Do not be afraid to ask for further information you think is necessary, but remember that every letter increases costs for the customer and HMRC. In many cases it will be impossible to arrive at a precise figure with which both sides are happy. It will usually be best in such cases to pay what you think is reasonable and give an explanation of your reasoning.

Example:

An agent sent in six Self-Assessment returns for the same client that were logged in the tax office but then mislaid. At our request the agent supplied copies of the returns and made a claim for £660 plus VAT. The invoice included an unspecified sum for “attending meeting with client to explain the position in detail�. When this was queried the agent’s explanations were unconvincing and he increased the claim to £880. We decided to pay a total of £200, which was accepted without further comment.

Note:

We do not pay for time spent waiting on hold for a call to be taken. Our view is these costs are unreasonable as the agent could attend to other work whilst they were on hold or might use other methods of contact.

The Chartered Institute of Taxation (CIOT) and the Institute of Chartered Accountants of England and Wales ICAEW) hold the collective view that they would not expect agents to charge for holding on the telephone, The thoughts of these professional bodies do add weight to our decision/rationale for not paying these costs.