In the letter, HMRC acknowledges the important role played by agents in the tax system and reminds them of their responsibilities under HMRC’s standard for agents, including that agents “make sure their own tax affairs are correct and up to date”. Where the agent is VAT registered, they must submit a VAT return, regardless of whether they have any VAT to pay or reclaim.  

The agent is asked to submit all outstanding VAT returns and pay any VAT due by 7 February 2026. HMRC says that it will charge interest on any VAT paid late, plus surcharges and penalties depending on the circumstances. If the agent can’t pay the amount outstanding in full, they are asked to contact HMRC using the details provided in the letter.  

If the agent does not resolve the situation by 7 February 2026, HMRC may take the following action: 

• Suspend the firm’s agent codes. This means that the agent won’t be able to access HMRC’s systems on behalf of their clients.
• Consider a public interest disclosure to the agent’s professional body.
• Review the central assessments on file and issue an additional assessment if HMRC considers the central assessments to be too low. A central assessment is also known as a ‘VAT notice of assessment of tax’, as explained in an earlier article.  

If the agent is no longer trading, they should cancel their VAT registration. The agent must file all outstanding VAT returns before they de-register, including a final VAT return. It is not possible to cancel a VAT registration from a date in the past.