If an accountancy firm is changing legal entity for any reason, such as changing from a sole trader to a limited company, it will be required to change agent codes.

Agents using HMRC online services for self assessment and corporation tax will need to write to the HMRC agent compliance team to request new agent codes, as well as getting any agent codes removed for legal entities that are no longer trading or supervised for anti money laundering.

HMRC has to sort out any code changes and stressed: ‘You must not try to move agents codes from your old legal entity to your new agent services account because this breaches the HMRC Standard for Agents and General Data Protection Regulation (GDPR).’

Additional information may need to be provided when changing agent designatory details. This is to ensure that the new legal entity still meets the registration requirements, such as supervision for anti money laundering.

If one firm has merged into an existing firm which does not change legal entity, it is not necessary to make any changes to the clients of the existing firm.

Any clients of the merged firm must re-authorise the new entity to handle their tax business, and the HMRC agent compliance team will also have to be told to remove any agent codes for the legal entity that is no longer trading.

If the accountancy firm is demerging from another one, a new agent services account will have to be set up for ach new legal entity, and clients need to give authorisation for the move to the structure. Again, new agent codes need to be sorted for the new legal entity. Only the firm that is changing legal entity needs to get new authorisation from each client.