HMRC have issued their Agent Update for September 2022. We have summarised the key content for you with links to our detailed guidance on the topics covered.
Technical Updates and Reminders
Tax
- HMRC has 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 here
- It helps companies find out if expenditure on specific assets may qualify and calculates how much they may be able to claim.
- The allowances are available to companies for qualifying expenditure on new and unused plant and machinery on or after 1 April 2021 and up to 31 March 2023.
See Super-deduction & First Year Allowances
2021 to 2022 Self Assessment (SA) exclusions and specials documents
The latest versions are 3.0 for exclusions and 2.0 for specials on the Self Assessment technical specifications (2022) page.
Employer PAYE new recurring Direct Debit functionality
- HMRC will shortly introduce a recurring Direct Debit option for employers which ensures a consistent set of payment options are available to all customers.
- This service was originally to be available in mid to late August 2022 however there have been some delays and HMRC 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.
See Employer Bulletin: August 2022 for more details
New powers for naming tax avoidance promoters
- HMRC publishes lists of those involved in the supply of mass-marketed tax avoidance schemes and details of the schemes they are selling. See Current list of named tax avoidance schemes and promoters, enablers and supporters.
- Following Finance Act 2022 HMRC can now name connected persons including individuals involved in promoting tax avoidance such as directors, company officers and those behind these schemes.
- 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. More publications under this new power are planned and HMRC will update the list as cases progress.
- This is not a complete list of all tax avoidance schemes currently being marketed or of all promoters, enablers and suppliers. There are other schemes, promoters, enablers and suppliers HMRC cannot publish information about.
See Promoters of Tax Avoidance Schemes (POTAS)
Spotlight 60: warning for agency workers and contractors employed by umbrella companies
- Spotlight 60 provides useful information that supports taxpayers in being able to better identify tax avoidance schemes used by umbrella companies.
- It describes how these schemes are claimed to work, gives some warning signs to look out for and includes 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.
See Spotlight 60: Umbrella companies and tax avoidance
Freeports update
- 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.
- From 6 September 2022, 3 of the 8 Freeports also have a designated customs site with work underway to support the remaining Freeports to designate a customs site over the coming months.
- The bidding process for Green Freeports in Scotland closed in June 2022.
- The Welsh Freeports bidding process was launched on 1 September 2022 and will close on 24 November 2022.
Businesses within these tax sites will be able to benefit from tax reliefs including:
- Relief from Stamp Duty Land Tax (SDLT)
- An enhanced 10% rate of structures and buildings allowance
- Capital allowance of 100%
- Business rates relief
- Employer National Insurance contributions relief
Preparing for the new tax year basis: Income Tax Self Assessment
- The rules HMRC use to work out sole traders’ and partners’ profits for Income Tax Self Assessment return are changing for many businesses for 2023-24 onwards.
- Only taxpayers with an accounting date other than 31 March/5 April are affected by the change.
- From April 2024, businesses will be taxed on profits for the tax year and not, as now, the profits for the accounting period ending in a tax year.
- From 2024-25 onwards where accounting periods are different from the tax year end, the taxable profits will be apportioned between the two accounting periods that straddle the tax year.
- The tax year 2023-24 is a transition year when self-employed businesses will move to the new way of calculating taxable profits for the tax year.
- This transition year will allow all businesses currently trading, regardless of the accounting end date, to use any overlap relief due.
- From 2023-24, some businesses might have to use provisional figures on their returns.
- Where a business’s accounting date is changed in the tax year 2022 to 2023, the current change of accounting date rules will apply. When 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.
See Basis Period reform and Accounting periods and tax basis periods
Economic Crime Levy for Anti-Money Laundering (AML) regulated businesses
- The Economic Crime Levy (ECL) was introduced in Finance Act 2022 as part of the government’s plan to develop a sustainable resourcing model for economic crime reform.
- Individuals, partnerships (including LLPs) and companies who carry on an AML-regulated business at any point in a financial year and have UK revenue of at least £10.2 million, need to pay the ECL.
- For UK resident entities, UK revenue is turnover for the accounting period plus amounts not included in turnover which is recognised as revenue in accordance with Generally Accepted Accounting Practice (GAAP). Revenue of a non-UK permanent establishment is excluded.
- The amount of ECL charged is determined by the entity’s UK revenue in the financial year.
- Payments must be made by 30 September following the end of the financial year so the first payments are due by 30 September 2023.
See Economic Crime (Anti-Money Laundering) Levy
Capital Gains Tax (CGT) on UK property account: agent authorisation for digitally excluded customers
- HMRC has 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:
- Agent registers 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 follows the registration process resulting in the client receiving a CGT on UK Property Account reference.
- 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 contacts HMRC to request support to authorise their agent and provides their CGT on UK Property Account reference.
- HMRC advisor refers to the Extra Support Team, client receives 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.
See CGT: Reporting when & how? and CGT: Payment of tax
Are your clients liable for Plastic Packaging Tax: check if your client should register and prepare to submit their return and payment from 1 October 2022
- 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 PPTreturn from 1 October 2022 and pay any tax due by 31 October 2022.
- Agents can apply to submit returns for PPTon behalf of their clients.
- The return must cover the accounting period 1 July 2022 to 30 September 2022. If your client became liable for PPT after 30 June 2022, their return only needs to include information from the date they became liable for PPT to 30 September 2022.
Your clients:
- Must keep accounts and records to support the information provided when they complete a quarterly PPTreturn, for at least six years from the end of the accounting period, recording weights in tonnes, kilograms, and grams.
- Produce accounts showing how they have worked out the figures they submit on their PPTreturn, and their records must support these figures.
- Must pay any tax due through their online PPT.
See Plastic Packaging Tax (subscriber guide)
Student loans
This is for agents dealing with payroll.
- Employers are responsible for dealing with Student Loan (SL) and Postgraduate Loan (PGL) deductions through the payroll via RTI including:
- Paying these to HMRC alongside tax and NICs.
- Giving employees details of the deductions on their wage or payslip, and P60 certificate.
Common errors identified on RTI were:
- No SL and PGL deductions are taken, despite HMRC sending a start notice.
- SL and PGL deductions are taken and recorded under the wrong loan or plan type.
- Deductions continuing after a stop notice has been issued.
Tips for getting it right:
If you are managing payroll on behalf of an employer, please ensure that you:
- Action start and stop notices on the next available payday from receipt.
- Always check the start notice, even if deductions are already being taken.
- Apply the relevant loan and plan type to the payroll, this can be found on the start notice, by asking the employee or by checking the starter checklist for new employees. If the employee does not know their loan or plan type, they can log into their Student Loans Company account.
- Apply the correct thresholds and rates for the relevant loan or plan type.
- Take extra care to ensure entries are recorded accurately on the employee's RTIFPS.
See Student Loans, PAYE: Starter checklist new employee 2022-23 and RTI: Real-Time Information for PAYE
Making Tax Digital
Change in how customers tell us about errors on their VAT returns: new digital G-Form.
- The new G-form is an online form 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.
Benefits of the new G-Form:
The new G-Form will streamline the process for customers, making it easier to tell HMRC about errors on their VAT returns. It will enable customers to:
- Upload supporting documentation.
- Provide explanatory notes.
- Save the form allowing them to complete it later.
- Receive a confirmation of submission with a reference number.
It also will help to reduce mistakes through built-in validation and auto-calculations.
Agents Services Account (ASA): granular permissions
HMRC are developing granular permission functionality in the Agent Services Account.
- This will allow agents with up to 1000 clients to control who in their firm can access client records, with the option to opt-in or out of using it.
- The granular permission feature will be released as a private beta to a small group of agents in September 2022 to test the new functionality with a wider release planned in October 2022.
HMRC are looking for participants to take part in the testing before it is released to the wider agent community. If you are interested in being part of the early release, contact
Making Tax Digital for VAT: make sure your clients are signed up
- 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 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 and will need to use MTD-compatible software to file their future VAT Returns.
- If you/your clients do not sign up for MTDand file your VAT returns through this software, you/they may have to pay a penalty.
Applying for an exemption from using software:
- 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.
See Making Tax Digital: VAT (subscriber guide)
HMRC Agent services
HMRC app: new employment details
The HMRC app has been updated to include new and improved employment details. 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.
Users of the app can quickly and easily:
- Get income and employment history (going back five years).
- Get their National Insurance number.
- Access their tax codes.
- Print and download their information and share it with their tax agent if needed.
The Trust Registration Service
Deadlines for registering a trust with HMRC
- 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.
- 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.
See Trust Registration Service
Corporation Tax repayments
- HMRC have introduced a change to help Corporation Tax (CT) companies claim repayments faster if they have waited more than eight weeks since making their claim.
- HMRC aim to respond to all progress chasing calls for CT repayments within one working day where the company has waited more than eight weeks since submitting its claim with cases to be escalated to a technical adviser in real-time.
- Where a technical adviser cannot respond in real-time, the company will be added to a list to be worked on by a technical adviser within one working day.
The change benefits companies and agents with complex cases and those who are in receipt of a high-value repayment. It significantly reduces the number of times a company/agent will have to contact HMRC to progress their Corporation Tax repayment claim.
See Companies: Filing & payment deadlines
Tax agent toolkits
HMRC have many tax agent toolkits available for you to download and use designed to address the most common errors seen from previous years.
Contact
The Tax agent blog has now been discontinued.
Complain about HMRC: To make a complaint to HMRC on behalf of your client you must be appointed as their tax advisor.
Where’s My Reply? for tax agents: 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:
- Register you as an agent to use HMRC Online Services.
- Process an application for authority to act on behalf of a client.
Manuals
Check the latest updates to HMRC manuals or subscribe to the automatic notification of changes.
Online
Online training material and useful resources for tax agents and advisers
HMRC Publications
- Employer bulletins
- National Insurance Services to Pensions Industry: countdown bulletins
- Pension schemes newsletter
- Revenue and Customs briefs
HMRC online Tax agent forum
- The agent forum enables agents to raise general queries about HMRC systems or processes impacting day-to-day practice, including matters escalated by the Issues Overview Group.
- Agents can join the agent forum by registering and providing their professional body membership reference.
External link
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