It is a letter from HMRC containing authorisation code in order to authorise somebody to act as your agent in connection with your tax affairs. It is used to approve appointment and provides the agent, an access to your tax affairs.
The code contained therein should be used within 28 days from the date of its issue.
Agent is a term used to describe a person who has been appointed by you to deal with your tax affairs.
Please share it with the agent who has applied for this code, and then he'll be able to activate the authorisation online. This will also allow HMRC to exchange information about your tax affairs with them.