HMRC have issued their Agent Update for October 2022. We have summarised the key content for you with links to our detailed guidance on the topics covered.
Technical Updates and Reminders
Reduction in the rate of National Insurance Contributions (NICs) and reversal of the Health and Social Care Levy: action needed
On 22 September 2022, the government announced the following key changes:
- With effect from 6 November 2022, the 1.25% increase in Class 1, Class 1A, Class 1B and Class 4 NICs will be reversed. The rates will return to pre-April 2022 levels.
- The 1.25% Health and Social Care Levy due to be introduced from 6 April 2023 will not go ahead.
Agents are reminded to make the necessary changes now so that the November payroll will reflect these changes:
- Employees will be directed to their employers in the first instance in case of queries. Corrections can be made by submitting a revised Full Payment Submission through Real-Time Information.
- Payroll software developers were made of the changes required on 22 September 2022, so initial queries should be directed to them.
- HMRC's Basic PAYE Tools (BPT) will be updated from 6 November 2022 by installing a new update which will be available from 4 November 2022 (version 22.2).
See National Insurance Contributions rise reversed
Residence: exceptional circumstances
Approximately 5,000 letters were sent by HMRC to agents and taxpayers in October 2022, where the taxpayer's tax return showed days spent in the UK due to:
- Exceptional circumstances (Box 11 of SA109).
- Coronavirus related work (Box 11.1 of SA109).
Some taxpayers have gone above the day limits as allowed by each concession (60 days for exceptional circumstances and 57 days for Coronavirus-related work). Where clear errors have been made in the tax return, the taxpayer will have 60 days from the date of the letter to amend their tax return.
- If amending a return, the residency of the taxpayer should be revisited.
- An educational webinar on the topic is taking place in November 2022. Register interest by emailing
This email address is being protected from spambots. You need JavaScript enabled to view it. .
See SRT: Statutory Residence Test
Plastic Packaging Tax: Check if your clients need to submit their return and payment by 31 October 2022
- Plastic Packaging Tax (PPT) was introduced on 1 April 2022.
- If your clients manufacture or import more than 10 tonnes of plastic packaging a year into the UK, they may need to register for PPT.
- For the quarter 1 July to 30 September 2022, a return must be submitted and payment made by 31 October 2022.
- Agents can apply to submit returns for PPT on behalf of their clients.
See Plastic Packaging Tax (subscriber guide)
Alcohol Duty Reform: Consultation response and draft legislation published
- The government has published a response to the 'Consultation: The new alcohol duty system'.
- Draft legislation has also been produced.
- The new system of basing alcohol duty rates on a product's Alcohol by Volume (ABV) will be introduced on 1 August 2023.
- There will also be an extension of the Small Brewers Relief.
Guidelines for Compliance and the Guideline for Supporting PAYE Settlement Agreement Calculations
- The first set of Guidelines for Compliance has been published, providing support to employers regarding PAYE Settlement Agreement calculations.
- The Guidelines cover:
- HMRC’s recommended approach and example calculations.
- Common errors and how to correct them.
See PAYE Settlement Agreements
Making Tax Digital
Making Tax Digital (MTD) for VAT: make sure your clients are signed up
- From 1 November, the VAT online account will no longer be available for businesses to file their returns. MTD compatible software must be used instead.
- If you have clients under the Registration Threshold (£85,000), who have not registered for MTD for VAT in time to file their return by 7 November, they can use the online account for that return only.
- Failure to sign up and file returns using the system may incur penalties.
VAT Registration Service: VRS
- Registering clients for VAT changed on 1 August 2022.
- The VAT Registration Service (VRS) can be accessed through the link VAT: registration applications, exceptions and changes and by using your Agent Services Account (ASA) credentials.
- Using the VRS will automatically sign your clients up to Making Tax Digital (MTD) for VAT.
- Any Exemptions for MTD must be applied for separately.
Changes to the Agent Services Account (ASA) content: removing references to 'Making Tax Digital' for VAT
- The ASA allows agents to access HMRC services on behalf of their clients.
- From April 2022, all VAT-registered businesses were required to sign up to Making Tax Digital (MTD) for VAT.
- There will no longer be references to MTD for VAT on the ASA, all such services will simply be referred to as VAT.
Agents Services Account (ASA): granular permissions
HMRC are developing granular permission functionality in the Agent Services Account. This new feature is called 'Manage Access Groups'
- It allows 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.
- Testing with a small group of agents started in September 2022. Options to allow larger agents to use the service are being investigated and volunteers will be required in the coming weeks.
HMRC Agent Services
New Starter Checklist interactive guidance goes live: helping customers get it right
- The New Starter Checklist can be used, instead of a P45, as a way of providing HMRC with new employee details.
- Even with a P45, the Checklist is required if an employee has a student loan.
- Online interactive guidance is now available which walks the employee through a series of questions and results in a new starter declaration that can be given to the employer.
See: PAYE: Starter checklist new employee 2022-23
New VAT Error Correction Notice Online Form (VAT652)
- A new online VAT Error Correction Notice form was launched on 8 August 2022: VAT652.
- Whilst paper forms are still accepted, this is HMRC's preferred method of notification and should lead to increased efficiencies in processing.
- Changes include: the ability to sign in with a Government Gateway account; uploading supporting documents; and receiving a reference number upon submission.
Webinar for completing the VAT 484 form
- There will be two webinars, one for agents and one for customers, focussing on making changes to VAT registration details.
- You can register here and view a recorded version here.
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
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
Agent Online Forum (AOF)
- 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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