Agent Update: January 2023

HMRC have issued their Agent Update for January 2023. We have summarised the key content for you with links to our detailed guidance on the topics covered. 

Technical Updates and Reminders

Find out about the Income Record Viewer

The Income Record Viewer gives you access to your client’s information including:

• PAYE information for the current year and the previous four tax years.
• Employment records, including time in employment, taxable benefits and any gap where no record is held by HMRC.
• Income record.
• State and private pension information.

Find out how to get access to the Income Record Viewer for agents.

Plastic Packaging Tax: time to submit third quarter returns and pay by 31 January 2023

Plastic Packaging Tax (PPT) was introduced on 1 April 2022.

• If your clients manufacture or import 10 or more tonnes of plastic packaging within a 12-month period they must register for Plastic Packaging Tax, even if their packaging contains 30% or more recycled plastic.
• If your clients are liable to register/have already registered, from 1 January 2023 they must submit their PPT return and pay any tax due by 31 January 2023.

See Plastic Packaging Tax (subscriber guide)

Customs Declaration Service exporter deadline extended to 30 November 2023

• Exporters now have until 30 November 2023 to move across to the Customs Declaration Service for their export declarations.
• Businesses can provide their preferred email address on GOV.UK to receive updates and notifications about the Customs Declaration Service.

GOV.UK guidance for self-employed

HMRC have updated the GOV.UK guidance for the self-employed to include the National Insurance threshold changes affecting the 2022-23 tax year and 2023-24 tax years.

• Taxpayers under Self Assessment customers need to file returns in order to have contributions treated as paid and allocated to accounts, even if they have no National Insurance Contributions liabilities because they are earning between the Small Profits and Lower Profits Thresholds.

See National Insurance rates and allowances for details of the changes.

Guidance for settling a CT61 debt by the issue of funding bonds

If a UK resident company is unable to pay the interest due on a loan, it can instead issue a funding bond, payment-in-kind (PIK) note or loan note to the creditor.

• The issuing UK company must deduct tax on the interest at source by withholding a proportion of the funding bond from the creditor.
• They must declare the tax deducted on a CT61 return for the quarter when the deemed interest is paid.
• They may decide to pay the tax deducted with a monetary payment or by way of a funding bond. If they choose the latter, they must send the original funding bond together with form CT61 to HMRC’s nominee company, RN Ltd (company registration number 279190), in the name of RN Ltd, not HMRC, with a covering letter providing the following information:
  • The amount of interest paid by the bond (the value at issue) as included on form CT61.
  • If different, the face value of the funding bond at issue.
  • An explanation of the method and factors taken into account in valuing the bond.
  • The amount of Income Tax deducted from the interest paid by the funding bond.
  • The direction reference number, if the rate of Income Tax deducted is less than the basic rate due to a double taxation treaty/

The communication address of RN Ltd is:

RN Ltd c/o HMRC
Company Accounts Team
4th Floor, Teville Gate House
25 Railway Approach
Worthing
BN11 1UR

Email This email address is being protected from spambots. You need JavaScript enabled to view it.

See Withholding tax

Publication of guidance on the transfer of assets abroad legislation

HMRC has published new guidance on the transfer of assets abroad legislation in the International Manual INTM600000 onwards.

Extensive draft guidance was published as part of a consultation in July 2013. The guidance being published now is a rewrite of this. It also includes additional guidance following the introduction of the deemed domiciled rules.

See Transfer of Assets Abroad (TOA)

Reporting cryptoasset related gains

• If your client sold or exchanged any cryptoassets in the 2021-22 tax year, they may need to report the gains and pay any tax due by 31 January 2023 and may also want to report any losses.
• If they have not received a notice to file a tax return, they can register for Self Assessment or, if they only have capital gains rather than income from cryptoassets, they can instead use the Real-time Capital Gains Tax service.

See How are Bitcoin, cryptocurrencies or cryptoassets taxed in the UK? and Register for Self Assessment

Preparing for the new tax year basis: Income Tax Self Assessment

From 6 April 2024, businesses will be taxed on profits for the tax year and not, as now, the profits for the accounting year ending in the tax year.

• Only those with an accounting date other than 31 March or 5 April are affected. 

The change is not affected by the delay to the introduction of Making Tax Digital (MTD) for Income Tax announced in December 2022.

• 2023-24 is a transition year when businesses begin moving over to the new basis. This may affect the 2023-24 return due by 31 January 2025 and will affect subsequent returns.
  • Businesses must declare their total profits from the end of the last accounting date in 2022-23 to 5 April 2024.
  • Businesses can use any overlap relief in the transition year. By default, any remaining additional profit is spread over five years.
• From 2023-24 some businesses might have to use provisional figures on their returns. They will have until the normal return amendment deadlines to submit their final figures.
• Where a business’s accounting date changed in 2022-23, the current change of accounting date rules will apply.
• Where a business changes its accounting date from 2023-24 onwards, these rules will not apply, and a change can be made regardless of past changes.
• For businesses changing accounting date in the 2021-22 tax year, HMRC can provide details of overlap relief figures, or historic profit figures. Taxpayers should phone the HMRC Self Assessment Helpline and agents the Agent Dedicated Line if they need this information to complete a 2021-22 tax return.

See Basis Period reform

Making Tax Digital (MTD)

On 19 December 2022, it was announced that the introduction of Making Tax Digital for Income Tax Self Assessment will now be phased in.

• From April 2026: the rules will apply to self-employed individuals and landlords with an income of more than £50,000.
• From April 2027: the rules will apply to those with an income of between £30,000 and £50,000.

The government is reviewing the needs of smaller businesses to see how the MTD for Income Tax Self Assessment service can be shaped to meet their needs and the best way for them to fulfil their Income Tax obligations. 

See MTD: Toolkit for accountants

Changes to VAT penalties and interest from 1 January 2023

On 1 January 2023 simpler penalties for the late filing of VAT returns and paying VAT late were introduced.

• The new penalties replace the default surcharge and now also apply to taxpayers who submit nil or repayment returns.
• The way HMRC calculate interest on late VAT payments and repayments of VAT has also changed for VAT periods starting on or after 1 January 2023.

See Penalties (VAT)

HMRC Agent Services

Helping more customers use online services

• To access HMRC online services, customers need a Government Gateway user ID and password.
• As part of the Government Gateway setup process, taxpayers can now use a new identity-checking app via the camera on their mobile phone to confirm a match with either their UK driving licence or passport.
• They can continue to provide two forms of evidence instead of using the new app if they prefer.

Form FBI2 to be withdrawn

The authorise a tax agent to use PAYE and Construction Industry Scheme (CIS) online services (FBI2) form is being taken out of circulation on 31 January 2023, as all of the information in it can be found in the revised 64-8 form introduced in March 2022.

See New form 64-8 for tax agent authorisation

Agent Talking Points

Updates on these webinars are regularly sent to agents on Monday mornings.

Support for taxpayers who need extra help

Find out how to get extra help here.

Tax agent toolkits

HMRC have many Tax agent toolkits available for you to download and use that are 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
• 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

Agent update issue 104