Issue 100 of Agent Update – GOV.UK

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Updated 21 September 2022

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This publication is available at https://www.gov.uk/government/publications/agent-update-issue-100/issue-100-of-agent-update
Developments and changes to legislation and allowances relating to UK tax including:
Details of live consultations and links to responses, changes to HMRC service and guidance, including:
Latest updates from the partnership between HMRC and the main agent representative bodies. Including:
HMRC have published an interactive tool to help companies check if they can claim for the super-deduction of up to 130% or the 50% special rate (SR) first year allowances for qualifying expenditure on plant and machinery.
The tool is available in the HMRC customer guidance for super-deductions and SR allowances. It helps companies find out if expenditure on specific assets may qualify and calculates how much they may be able to claim.
Only companies can claim these allowances. The allowances are for qualifying expenditure on new and unused plant and machinery. They are for expenditure on or after the 1 April 2021 and up to 31 March 2023.
We initially produced the documents to help software developers identify cases where customers should file a paper tax return rather than an online one, but the agent community have advised that these documents are also useful for them when dealing with clients’ sometimes complicated tax affairs.
The versions are 3.0 for exclusions and 2.0 for specials on the Self Assessment technical specifications (2022) page.
HMRC will shortly introduce a recurring Direct Debit option for employers in line with its Payments Strategy, which ensures a consistent set of payment options are available to all customers.
Currently employers can set up a Direct Debit to collect a single payment, but not a recurring Direct Debit.
We had planned to make this service available in mid to late August 2022. However, to ensure we offer our customers the best possible experience, there have been some delays and we now expect it to be available in early October 2022.
Once the new service is available, there will be a new link which will allow employers to set up a Direct Debit via the employers’ liabilities and payments screens in the business tax account (BTA). This will allow your clients to set up a recurring Direct Debit instruction (unless they cancel it), authorising HMRC to collect directly from their bank account based on their return submissions.
After an employer has set up a Direct Debit, the link will change to ‘Manage your Direct Debit’ and an employer will be able to manage the Direct Debit online.
Payments covered by Direct Debit will show within employers’ liabilities and payment screens for both employers and agents.
Only employers will be able to create, view, amend and cancel a Direct Debit.
To support taxpayers in steering clear or moving out of tax avoidance, HMRC publishes details on GOV.UK of those involved in the supply of mass-marketed tax avoidance schemes and details of the schemes they are selling.
Current list of named tax avoidance schemes and promoters, enablers and supporters.
To further support taxpayers, new legislation was introduced in Finance Act 2022 which enables HMRC to publish details of schemes they suspect are tax avoidance and to name suspected promoters earlier than previously possible. HMRC can now name connected persons including individuals involved in promoting tax avoidance such as directors, company officers and those behind these schemes. Publishing this information will help inform taxpayers about tax avoidance schemes being marketed and those that market them.
In August 2022, HMRC used these new powers for the first time to name two suspected tax avoidance promoters, as well as the directors of these companies. The new cases have been added to the existing list of promoters on GOV.UK and detail the legal powers that enabled publishing. More publications under this new power are planned and HMRC will update the list as cases progress.
The list is not a complete list of all tax avoidance schemes currently being marketed. Neither is it a complete list of all promoters, enablers and suppliers. There are other schemes, promoters, enablers and suppliers that HMRC cannot publish information about at this time.
HMRC provides a range of other tools for customers to help them steer clear of avoidance schemes, such as their interactive tax risk checker, payslip guidance if you work for an umbrella company, and case studies on tax avoidance demonstrating the risks of becoming involved in a tax avoidance scheme.
This information will help you and your clients identify tax avoidance schemes and those promoting them, so they do not get caught out.
Many umbrella companies are compliant with the tax rules, but some use contrived arrangements that claim to allow agency workers and contractors to keep more of their earnings. These arrangements are tax avoidance schemes and most of them do not work.
Spotlight 60 provides useful information that supports taxpayers in being able to better identify tax avoidance schemes used by umbrella companies. Spotlight 60 describes how these schemes are claimed to work and gives some warning signs to look out for. Also included is information on what taxpayers should do if they are worried about using a tax avoidance scheme or have concerns about being offered these kinds of pay arrangements.
HMRC provides a range of other tools for customers to help them steer clear of avoidance schemes, such as their interactive tax risk checker, payslip guidance if you work for an umbrella company, and case studies on tax avoidance demonstrating the risks of becoming involved in a tax avoidance scheme.
This information will help you and your clients identify tax avoidance schemes and those promoting them, so they do not get caught out.
All English Freeports now have at least two tax sites designated, with a total of 21 tax sites now live across the 8 English Freeports.
As of 6 September 2022, 3 of the 8 Freeports also have a designated customs site with work under way to support the remaining Freeports to designate a customs site over the coming months.
Businesses within these tax sites will be able to benefit from tax reliefs including:
There is also guidance for businesses on how to claim Freeport tax reliefs available.
For more information on the tax and customs offer within Freeports, see:
The Government remains committed to establishing 2 Green Freeports in Scotland, and at least one Freeport in each of Wales and Northern Ireland as soon as possible.
The bidding process for Green Freeports in Scotland closed in June 2022.
The Welsh Freeports bidding process was launched 1 September 2022 and will close 24 November 2022.
The rules HMRC use to work out sole traders’ and partners’ profits for Income Tax in a Self Assessment return are changing for many businesses for the tax year 2023 to 2024 onwards. This may affect the return that they must submit by 31 January 2025. It will also affect subsequent returns.
Only taxpayers with an accounting date other than 31 March or 5 April are affected by this reform.
Under the new rules, from April 2024, businesses will be taxed on profits for the tax year and not, as now, the profits for the accounting year ending in a tax year. For the tax year 2024 to 2025 and future years where accounting years are different from the tax year end, the taxable profits will be worked out by apportioning the profits for the two accounting periods that straddle the tax year.
The tax year 2023 to 2024 is a transition year in which self-employed businesses will move to the new way of calculating taxable profits for the tax year. Businesses will need to declare the total profits from the end of the last accounting date in the tax year 2022 to 2023 up to 5 April 2024. This means that profits generated over a longer period will be taxable in the transition year. In the tax year 2023 to 2024, businesses can use any overlap relief resulting from overlap profit when the business first started. By default, any remaining additional profit can be spread over 5 years.
As an example, if a business’s accounting date is 31 December, they must declare profits from 1 January 2023 to 5 April 2024 (15 months rather than 12) in their tax return for the tax year 2023 to 2024, which is due by 31 January 2025.
The transition year 2023 to 2024 will present an opportunity for all businesses currently trading, regardless of accounting date, to use any overlap relief due.
From the tax year 2023 to 2024 onwards, some businesses might have to use provisional figures on their returns. More information about this will be available in due course.
Where a business’s accounting date is changed in the tax year 2022 to 2023, the current change of accounting date rules will apply. Where a business decides to change its accounting date from the tax year 2023 to 2024 onwards, these rules will not apply and a change can be made regardless of past changes.
The Economic Crime Levy (ECL) was introduced in Part 3 of Finance Act 2022 as part of the government’s plan to develop a sustainable resourcing model for economic crime reform.
September 2022 marks the halfway point in the first year of the ECL.
Individuals, partnerships (including LLPs) and companies who carry on an anti-money laundering regulated business at any point in a financial year and have UK revenue of at least £10.2 million, will need to pay the ECL. Each entity in a group that meets these conditions will have to pay the ECL individually.
For UK resident entities, UK revenue is their turnover for the accounting period plus amounts not included in turnover which are recognised as revenue in accordance with GAAP. Revenue of any permanent establishment outside of the UK is excluded.
The definition of UK revenue for non-UK resident entities who are regulated for anti-money laundering purposes is at S57 Finance Act 2022.
The amount of ECL charged is determined by the entity’s UK revenue in the financial year:
The amounts for UK revenue and ECL payments are proportionally adjusted if an accounting period is other than 12 months, or an entity is regulated for only part of the financial year.
Payments must be made by 30 September following the end of the financial year to one of 3 collection authorities:
This means the first payments will be due no later than 30 September 2023.
As many anti-money laundering regulated businesses are likely to have questions about the ECL we are developing ECL guidance and will be publishing further information on GOV.UK soon. HMRC will continue to provide updates over the coming months.
In the meantime, you can support your impacted clients by reminding them of the ECL and advising when payments for the 2022 to 2023 tax year are due.
Further background information to the ECL is available in the Tax Information and Impact Notice at GOV.UK.
HMRC have introduced a new process to allow agents to report and pay using the Capital Gains Tax (CGT) UK property disposal online service on behalf of clients who are digitally excluded.
The process is outlined below:
Agent is required to register with Agent Services unless they have an existing account.
Agent asks their client to contact HMRC to register for a CGT on UK Property Account.
HMRC adviser will confirm the client is digitally excluded and refer them to a Tax Technician.
The Tax Technician will follow the registration process which will result in the client receiving a CGT on UK Property Account reference. (CGT on UK Property Account Reference will be created in real-time.)
Client gives the CGT on UK Property Account reference to their agent to begin the agent-client authorisation process.
Agent logs into Agent Services and selects ‘Ask your client to authorise you’.
Agent enters their client’s CGT Account reference, creating an invitation link.
Client should contact HMRC to request support to authorise their agent and provides their CGT on UK Property Account reference.
HMRC advisor takes the callers details and makes a referral to the Extra Support Team advising the client will receive a call back within 48 hours.
HMRC Extra Support Service adviser calls the client and confirms they are happy for the agent to act on their behalf and creates the agent-client relationship.
Agent can engage digitally with HMRC on behalf of their client for CGT property disposals.
The CG-APP18 Capital Gains Tax on UK Property Account Guidance will be updated.
The new Plastic Packaging Tax (PPT) was introduced on 1 April 2022. If your clients manufacture or import plastic packaging into the UK, they may need to register for PPT, submit a PPT return from 1 October 2022 and pay any tax due by 31 October 2022.
Find out who the manufacturer or importer of plastic packaging is.
Agents can apply to submit returns for PPT on behalf of their clients.
The return needs to cover the accounting period from 1 July 2022 to 30 September 2022. If your client became liable for PPT after 30 June 2022, their return will only need to include information from the date they became liable for PPT to 30 September 2022.
Your clients:
For support, read the guidance on how to complete a quarterly PPT return, or listen to our PPT webinar recordings.
This article is for agents dealing with payroll
Employers are responsible for:
According to Real Time Information (RTI) data for the tax year 2021 to 2022, over 95% of employers and payroll agents accurately deduct SL and PGL for employees and send this information to HMRC on employees Full Payment Submission (FPS) within the RTI submissions.
Although most get it right first time, there is still a small percentage who do not.
Common errors identified on RTI were:
If you are managing payroll on behalf of an employer, please ensure that you:
Where you do not action the start or stop notice, or take deductions under the wrong plan type, HMRC will send a Generic Notification Service (GNS) message to you or the employers Online PAYE account as a reminder. We recommend you as the payroll agent register for email alerts for GNS messages. You can advise your client to do so as well, should you wish.
This ensures:
More information on GNS messages and Student Loan repayment guidance for employers is also available.
The new G-form is an online form and will be the default option landing page of the Tell HMRC about any errors in your VAT Return page on GOV.UK.
This is for all customers who wish to submit a VAT Error Correction Notice (ECN). Once submitted, a copy of the digital form will be captured into the Digital Mail Service (DMS) and processed as it is currently.
There will be no change to the way HMRC currently processes VAT Error Correction Notices.
The new G-Form will streamline the current process for customers, making it easier to tell us about errors on their VAT returns. It will enable customers to:
It also will help to reduce mistakes through built in validation and auto-calculations, and capture more complete information.
This will enable processing teams to work more efficiently, speeding up the processing time for the customer. It also means customers will not have to use paper, reducing printing costs.
HMRC are developing granular permission functionality in the Agent Services Account. This will allow agents to control who in their agency can access client records, with the option to opt in or out of using it. It is specifically aimed at supporting small to medium sized agents with up to 1000 clients.
The granular permission feature will be released as a private beta to a small group of the agents in September 2022 to test the new functionality. We are looking for participants to take part in the testing before it is released to the wider agent community.
As this is a private beta release, and not the final product, we encourage you to share with us any feedback regarding how the feature is working for you as part of the testing.
If you are interested in being part of the early release, please contact mtdgpvolunteers@hmrc.gov.uk stating your organisation’s name and agent reference number.
We are aiming to release the functionality to the wider agent community in October 2022.
All VAT registered businesses should now be using Making Tax Digital (MTD) compatible software to keep VAT records digitally and file their VAT returns to HMRC.
From Tuesday 1 November 2022, businesses that file their VAT returns monthly or quarterly will no longer be able to use their existing VAT online account to do so. This means they will need to use MTD compatible software to file their future VAT Returns.
If you work with VAT registered businesses, please check they’re on track to do this, and if not, you can use our step by step guide to sign your clients up to MTD now.
If you or your clients do not sign up for MTD and file your VAT returns through this software, you may have to pay a penalty.
If you’re already exempt from filing VAT returns online or if you or your business is subject to an insolvency procedure, you’re automatically exempt.
You can check if you can apply for an exemption.
You can find more information on GOV.UK about Making Tax Digital.
The HMRC app has been updated to include new and improved employment details. Users of the app can quickly and easily get their:
App users can also print and download their information and share it with their tax agent if needed. The app means there’s no need for you or your clients to call us for employment details, and it saves time in waiting for information to arrive in the post.
Please encourage your clients to use the HMRC app which is free to download from the App Store or Google Play.
Our YouTube video on how to confirm your employment details on the HMRC app shows how simple it is to get this information.
How do I confirm my employment details on the HRMC app
Once your client signs into the app for the first time, they can use facial recognition, their fingerprint or a 6-digit pin to get fast and secure access. The app is fully compliant with the Web Content Accessibility Guidelines (WCAG) and was tested by range of people, including disabled users.
Other improvements to the app include paying your Self Assessment via your bank. To showcase the app functionality, we have created a series of ‘how to use the app’ videos on YouTube which covers how to make a Self Assessment, how to claim a tax refund and how to manage your tax credits.
how to make a Self Assessment payment
how to claim a tax refund
how to manage your tax credits
Information on employment details is available on your Personal Tax Account, and by calling the HMRC Helpline, but the app is the best and most convenient way to get it.
The dispatch of PIN activation letters, which were requested by HMRC customers, was delayed between 26 July and 18 August 2022. This matter has now been resolved and the PIN activation letters have now been issued.
We apologise for the inconvenience.
The deadline for registrations for most trusts on the Trust Registration Service was 1 September 2022. Any trusts who have not yet registered and are required to do so should register as soon as possible.
Trusts that need to register from 1 September 2022 must do so within 90 days.
Detailed information on registration deadlines for Trusts and Estates.
No penalties will be charged for failure to register or late registration of a trust unless that failure is deliberate, in which case the trustee may be liable to a penalty of £5,000.
Find out how to report a trust discrepancy to HMRC.
Technical guidance can be found on the Trust Registration Service Manual — reporting a discrepancy TRSM70000.
Find out how to ask HMRC for information about a trust.
Technical guidance can be found on the Trust Registration Service Manual — Trust data requests TRSM60000.
GOV.UK guidance for reporting that beneficial owners of a trust may be at disproportionate risk of harm if their data is shared can be found at register a trust as an agent and technical guidance can be found on the Trust Registration Service Manual — exemptions to Trust Data Requests TRSM60040.
HMRC have introduced a change to help Corporation Tax customers claim their repayment faster if they have waited for longer than 8 weeks since making their claim.
Following a successful trial, HMRC will now aim to respond to all progress chasing calls for Corporation Tax repayments within 1 working day where the customer has waited more than 8 weeks since submitting their claim. Corporation Tax advisers will escalate these cases to a technical adviser in real time.
Where a technical adviser is not available to respond in real time, the customer will be added to a list to be worked by a technical adviser within 1 working day.
This change particularly benefits customers and agents with complex cases and those who are in receipt of a high value repayment. This significantly reduces the number of times a customer or agent will have to contact HMRC to progress their Corporation Tax repayment claim.
All agents will be aware of our popular Agent Talking Points webinars, for which most agents receive regular Monday morning updates.
We have principles of support for customers who need extra help. These set out our commitment to support customers according to their needs, and underpin the HMRC Charter.
Find out how to get help and find out what extra support is available.
HMRC have 20 Tax agent toolkits available for you to download and use. They have been designed to address the most common errors seen from previous years. They include checklists of the key issues to consider and links to HMRC technical guidance and manuals.
Please be aware that our toolkits are currently being updated.
Here is the breakdown of toolkits by category:
By identifying the most common errors this may prompt a conversation between you and your clients to ensure submissions are correct.
The Tax agent blog has now been discontinued.
Complain to HMRC.
To make a complaint to HMRC on behalf of your client you must be appointed as their tax advisor.
Find out when you can expect to get a reply from HMRC to a query or request you have made. There is also a dedicated service for tax agents to:
You can check the latest updates to HMRC manuals or subscribe to automatic notification of changes. You can also suggest improvements for pages of our manuals by using the feedback options in the page footer.
Online training material and useful resources for tax agents and advisers.
HMRC videos on YouTube, online learning modules, and live and pre-recorded webinars are available for tax agents and advisers providing you with free help, learning and support on topical subjects.
Employer Bulletin.
The latest edition of Employer Bulletin is now available and contains topical and useful information about PAYE processes and procedures. For employers to be informed when it is available on the website, they must first register to receive the email alerts.
National Insurance Services to Pensions Industry countdown bulletins.
Countdown Bulletin 53 has been added to this collection.
Pension schemes newsletter.
This newsletter is published by HMRC’s Pension Schemes Services to update stakeholders on the latest news for pension schemes.
Revenue and Customs briefs.
These are briefs announcing changes in policy or setting out the legal background to an issue. They generally have a short lifespan, as announced changes are incorporated into permanent guidance and the brief is then removed.
The Agent Online Forum (AOF) provides a service for Agents to post and view queries, provide relevant evidence, suggest solutions, and access updates on potential systemic issues which may have a widespread impact on the operation of the tax system.
AOF staff provide and direct agents to where information is available, or where there is sufficient evidence of a systemic issue, obtain updates or responses from colleagues who are Subject Matter Experts (SMEs) on the topic.
Professional bodies may also identify potential systemic issues that could be of high impact, and request prioritisation and escalation within HMRC to achieve resolution or an update on the item.
Escalated issues from the AOF are monitored and progressed by the Issues Overview Group (IOG), of professional bodies and Agents in practice, who prioritise and provide input on the resolution or outcome of escalations. Professional bodies can also highlight and seek progress on high priority issues, when engaging with HMRC board members in the Representative Bodies Steering Group. The process for posting, response, prioritisation, escalation, and review of an issue outcome, is outlined in Agent Update 98.
Answers and the latest updates available on issues are published on the relevant Agent Online Forum (AOF) subject thread. Information available on the progression of the top issues, as prioritised by the Issues Overview Group (IOG), can be viewed in the IOG Escalated Issues section of the AOF.
The IOG met in August 2022 to review progress on outstanding escalated issues and to update prioritisation. MTDVAT Exemptions MTDVAT-16256, and the VAT Registration Service (VRS) VAT-18548, were the top issues on which updates and progress were sought by the IOG. A bespoke meeting on VRS is being arranged as a priority.
SA-9471 — SA pre-population data — Subject Matter Experts (SMEs) updated the group on investigations around data flows in SA pre-population, and the possible availability of additional online access to information in the coming months which will assist viewing of data, and queries by agents.
SA-11680 — Linking emails to clients: IOG members met with HMRC Subject Matter Experts in August 2022 to provide updates and additional input on challenges tracking client forms. HMRC are seeking further input from colleagues to understand solutions that may be available.
SA-17269 — Transferring VAT Numbers: The IOG Agent in practice representative, who provided detailed evidence on transferring VAT numbers, outlined the background to date. Updates have been published on the AOF. Additional information on timescales is being sought.
SA-16038 — Tax Repayment Delays: Changes to process and guidance will ensure more SA advisers can release repayments where it is appropriate to do so. This change was implemented week commencing 25 July 2022, and other solutions are being tested to increase the number of repayments that can be made. This work area will continue to be monitored.
In seeking to improve the triage of enquires and follow up on responses, posts which at the outset do not clearly appear to be about a potentially systemic issue may be locked within 5 days.
Similarly comments which follow a response and do not contain additional new evidence can also be locked within 5 days. In both instances the feedback provided will be made available to SMEs as insight on the topic.
Should Agents or Professional Bodies identify additional evidence on the topic in the future, they can email agentforum.wt@hmrc.gov.uk requesting the thread to be reviewed and re-opened. HMRC may also re-open a post if there is new information or the outcome advised changes, for example introduction of new technology or new policy. This ensures the AOF is able to balance resources and increase effectiveness in triaging greater volumes and a wider range of queries from more agents. This will benefit the majority of users, avoiding disproportionate resources being used on providing multiple follow-on responses after the answer has been provided.
If you are not a member of a professional body, contact the Agent Engagement mailbox: team.agentengagement@hmrc.gov.uk
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