Agent Update 144: June 2026

HMRC have published their Agent Update for June 2026. We have summarised the key content, including activation dates for multi-factor authentication, a reminder of the upcoming deadline for employment-related securities returns, the first quarterly update for Making Tax Digital for Income Tax is approaching, a new fraudulent arrangement has been identified, and HMRC provide clarification on formal and informal reporting for estates.

agent update

Reminder: mandatory tax adviser registration now open

If your firm submits returns, makes payments or communicates with HMRC on behalf of clients, you are likely to be in scope for mandatory tax adviser registration.

Registration is now open for firms that do not already have access to an agent services account, and the deadline to apply is 18 August 2026.

See Mandatory tax adviser registration with HMRC

Multi-factor authentication: activation dates for agent accounts

Following successful testing and HMRC's ongoing engagement with tax and software professional bodies, HMRC will activate Multi-Factor Authentication (MFA) on all remaining agent accounts in a way that gives agents greater certainty to prepare.

The introduction of MFA brings agent accounts in line with the protection already in place for individual and organisation government gateway accounts, and is part of HMRC's ongoing work to protect agents and their clients from the evolving threat to online security.

Since 10 June 2026, agents are able to choose one of two specific dates for MFA to be activated on their account.

This means agents who have already made the necessary preparations for MFA can make the switch on a date which best suits their business requirements.
Agents who are ready to make the switch are encouraged to opt for an earlier date to benefit from enhanced security, protecting themselves and their clients.

Agents wishing to take advantage of this must notify HMRC by completing an online form.

The form is available when signing in to either an agent services account or an HMRC online services for agents account.
The form does not appear on accounts where MFA has already been activated.

If you choose to have MFA activated on:

15 July 2026: you must submit a form to HMRC by 11:59pm on 30 June 2026.
19 August 2026: you must submit a form to HMRC by 11:59pm on 31 July 2026.

Once activated, MFA will be applied to all accounts held under the agent Identifier (ID) provided.

Agents with multiple IDs can choose which ones to activate for each deadline.
Any IDs not activated by earlier deadlines will automatically be included in the final activation window.

MFA will be activated on all remaining agent accounts that do not already have it between 28 September 2026 and 15 October 2026.

HMRC are unable to give a specific date within this period to agents who are part of this final group.
If you are not planning to have MFA activated before this date, you should use the time between now and September to ensure you are fully prepared.

HMRC strongly encourage all agents to prepare in advance for their chosen activation date by selecting their preferred future settings and checking for any existing MFA settings that may be outdated.

This will ensure you are ready to use MFA on the date it is switched on for you.

Full guidance on how to prepare, including information on administrator roles, access code methods, and the 'remember me' function, is available in the updated Tax Agent's Handbook.

See HMRC release new guidance on Multi-Factor Authentication for agents

Employment-Related Securities (ERS): end of year return deadline

The deadline for filing annual ERS returns is 6 July 2026.

Missing the deadline will result in late filing penalties being charged to the employer.

Returns, including nil returns, must be submitted for every scheme that has been registered.

An ERS scheme needs to be linked to a live employer scheme.

If the PAYE scheme is being closed, you must advise the scheme employer to tell HMRC if they are closing any ERS schemes.
As an agent, you do not have the option to enter the date of the final event and close an ERS scheme.

If a scheme has been registered in error or is no longer required, you must advise the employer to cease the ERS scheme.

Once a scheme is ceased, an annual return must still be submitted for the tax year in which the final event date falls.

See Employment-Related Securities: Reporting

Get ready to meet the first quarterly update deadline

The first quarterly update deadline is 7 August 2026.

To be compliant, you and your mandated clients should now be using Making Tax Digital (MTD) compatible software to create and store digital records.
Compatible software includes using spreadsheets with bridging software.

If you have not already done so, there is still time to sign up your client for MTD for Income Tax.

You should do this if their total gross income from self-employment and property exceeded £50,000 on their 2024-25 tax return.

For extra support, check out HMRC's:

Interactive tool to check if your client needs to sign up and by what date.
Software finder tool to access HMRC's list of all compatible software.

A reminder that you will need to take the following 3 actions before you send your client's first quarterly updates.

Authorise and connect your software to HMRC.
Check that you have selected the right accounting period in your software.
- If your accounting period is 1 April to 31 March, select 'calendar periods' in your MTD software before you send your first quarterly update; otherwise, leave it as the default period that aligns with the tax year (6 April to 5 April).
Use the MTD compatible software to start creating digital records of your client's income and expenses from self-employment and property.

There will be a special MTD edition of the agent update at the start of July, which will contain some practical steps and further support to help you and your clients meet the first submission deadline.

See Making Tax Digital

Get help with VAT online services

In April, HMRC launched a new interactive guidance tool for newly registered VAT taxpayers.

Taxpayers can access the tool, where they will find guidance, including videos, to support them through the online VAT registration service.
The tool will also help existing VAT taxpayers to use the self-service options available in their business tax account.

This is part of HMRC's transformation to improve their digital services so taxpayers can manage their tax affairs and access the information they need without having to call or write to them.

Tax fraud warning: attempts to use 'Bills of Exchange' to pay HMRC

HMRC have published a tax fraud warning to raise awareness of a new fraudulent 'payment model' using Bills of Exchange to pay a tax liability.

A Bill of Exchange is defined in the Bills of Exchange Act 1882.
It is a note from one person to another, requiring that person to pay a certain sum of money to them or to a third party.
It is up to the recipient to decide whether or not to accept the bill as a form of payment.
Even when the bill has been drawn up according to the legislation, the recipient has no legal obligation to accept it.
HMRC do not accept Bills of Exchange against a tax liability.

It is currently being marketed to employers, recruitment and temporary labour agencies.

Any business could be approached as it is not tax or trade sector specific.
Organised crime groups are particularly active in the temporary employment agency and recruitment sector, but HMRC want to raise awareness for all businesses.

Promoters claim that a Bill of Exchange can be used to eliminate an HMRC debt.

They offer to manage the process for taxpayers, particularly payroll providers, and act on the taxpayer's behalf, drawing up any affidavits and engaging with HMRC.
In addition to Bills of Exchange, other forms of wording in promotional material may include reference to money orders, Public Trusts, Merchant Law or Negotiable Instruments.

Promoters may also claim that using Bills of Exchange can avoid the new umbrella company legislation, which was introduced from April 2026. This is not true.

In some cases, promoters may claim that the use of these arrangements is accepted or unchallenged by HMRC, or that the arrangements have been approved by King's Counsel (KC). This is not the case.

Using these arrangements could result in significant costs to your clients' businesses, not only through paying the promoter to use or facilitate their payment model, but also additional interest, penalties or fees that may be charged by HMRC where a debt is not fully paid on time.

HMRC are there to help advise you of new or emerging fraudulent arrangements that could significantly cost your clients' business.

If you think you may already have clients using this payment arrangement, you should advise them to contact HMRC as soon as possible.
There is a range of ways on offer to guide you on how to make a voluntary disclosure to HMRC. HMRC can help your clients get back on track.

HMRC's guidance clearly sets out:

How to pay different taxes and duties, including what to do if individuals or businesses have difficulties paying.
What will happen if you do not pay your tax bill.

If you are concerned about an individual or organisation offering your clients a tax saving arrangement, avoidance scheme or fraud arrangement, you can report it to HMRC using their report tax fraud or avoidance online form.

See Tax fraud warning on Bills of Exchange

Estates administration: clarifying formal and informal reporting positions

HMRC have identified a recurring issue in the administration of estates, where agents are treating estates as being able to move between informal and complex estate reporting during the same administration period when the estate is already registered for Self Assessment.

This clarifies HMRC's position and sets out the correct approach.

Use one reporting position for the whole administration period:

An estate's Self Assessment reporting position is determined for the whole administration period, from the date of death until the estate is fully administered.
- It is not determined on a year-by-year basis.
First, you must decide if the estate is informal or if it meets the criteria for formal reporting (Self Assessment).
Once it is registered for Self Assessment, this will apply until the end of the administration period.
- You cannot switch back to informal reporting once you register the estate for Self Assessment.

Moving from informal to formal reporting:

Sometimes an estate initially falls within informal reporting requirements but later requires formal reporting as a complex estate, for example, due to changes in income, gains, or claims.
If the estate becomes complex, register it for Self Assessment using the Trust Registration Service.
- From the option menu, select the tax years for the period the estate is considered complex and requires tax returns.
For earlier years before registration, report income and capital gains other than residential property informally only.
- Do not submit Self Assessment returns.
Once registered, the position is fixed.
- The estate cannot subsequently move back to informal reporting during the same administration period.

Notice to file and nil returns:

If a notice to file has been issued for a tax year but there is no income, gains or claims to losses or reliefs to report, contact HMRC and ask to cancel the notice to file for that year.
- This avoids unnecessary returns but does not change the estate's status.

Do not submit Self Assessment returns for informal estates:

If the estate is informal, do not send a Self Assessment return.
- If you do, HMRC will treat it as a voluntary return under FA2019 Part 4.
No automatic late filing penalty will be charged, however, late payment interest and penalties may still apply as statutory payment deadlines continue to apply.
Importantly, a voluntary return is treated as if a notice to file had been issued.

Registering an estate that was previously informal:

When registering the estate on the Trust Register for Self Assessment tax returns, send a letter to HMRC with:
- The name, address and phone number of the personal representative.
- The name, address, National Insurance number, and Unique Taxpayer Reference (UTR) of the person who died.
- A year-by-year breakdown of any income and capital gains.
- Any Income Tax and Capital Gains Tax already reported and paid during the administration period, for example, if residential property of the estate has been sold.

Estates that stay informal throughout the administration period:

Only report income and gains once at the end of the administration period, not every year.
Wait for HMRC's payment reference, then pay any tax due in one single payment.

See Trust Registration Service and Estates: Income Tax and Capital Gains Tax

Nudge your clients to file early: use free content available

June is a good time to start conversations with your clients about filing their Self Assessment tax return early.

You do not need to wait for your client to contact you.
Starting the conversation now could help in filing their tax return earlier.

To save you time and effort, HMRC have provided ready-to-use content on Frontify.com to nudge early filing.

It is copyright-free.
You just need to copy, adapt and share.

Content is available for your:

Website or email newsletter: a brief explanation of the benefits, and you can add any specifics.
Social media channels: linking back to your website.

You can add it to your website, or in your client emails, and schedule in some social media this month.

You can also use the free Self Assessment assets in your communications.

Old Inheritance Tax 100 (IHT100) forms will no longer be accepted after 31 August 2026

HMRC will stop processing old IHT100 forms after 31 August 2026.

If you submit previous versions of these forms after 31 August 2026, they will not be accepted, and you will be asked to resubmit the correct version.

To help avoid any issues or delays, make sure you switch to the latest forms as soon as possible.

Corporate Interest Restriction: reporting companies

Corporate Interest Restriction (CIR) allows groups to appoint a reporting company, which helps with the administration of the rules.

This includes the filing of Interest Restriction Returns (IRRs) for the group.

HMRC introduced changes to the CIR rules in Finance Act 2026.

CIR rule changes followed the announcement, which aimed at simplifying rule compliance for taxpayers.

Periods ending on or before 30 March 2026:

For periods ending on or before 31 March 2026, the existing rules broadly continue to apply.
Where a reporting company appointment has not already been made, groups must still notify HMRC of these appointments.
- Use the existing approved filing methods, such as the online form on GOV.UK or commercial software.
This will be particularly relevant, for example, for groups that are in the process of preparing their IRR for the year ended 31 December 2025.

Periods ending on or after 31 March 2026:

For periods of account ending on or after 31 March 2026, groups no longer need to make reporting company appointments 'by notice' to HMRC.
Instead, they will in future be required to disclose details of these appointments in their IRR for that period.
Reporting company appointments only have effect for the specific period of account.

HMRC is in the process of updating the IT software to enable this disclosure.

The legal obligation to disclose this additional information will be put in place when the IT changes are nearer completion.
For the time being, continue to file using the existing forms or software.

HMRC will provide further updates in due course.

See Corporate Interest Restriction (CIR)

Voluntary National Insurance Contributions (NICs) for periods abroad

From 6 April 2026, for tax years 2026-27 onwards, the option to pay voluntary Class 2 NICs for periods abroad has been removed.

New Class 3 NICs applications for periods abroad will require 10 years of continuous UK residency or at least 10 years of paid NICs.

If you have clients who work abroad, make them aware of the changes that came into effect in April 2026.

If your clients currently pay Class 2 NICs abroad:

HMRC will write to them from July 2026 if they are affected.
If they pay by Direct Debit, they should not cancel it.
- HMRC will collect their final payment for the 2025-26 tax year on 10 July 2026.

The changes do not affect the ability of anyone to purchase voluntary Class 2 NICs for tax years prior to 2026-27.

HMRC encourages employers to review the latest guidance detailing the changes:

Voluntary NICs for periods abroad from April 2026.
The tax impact and information note.

The changes are being made to ensure that individuals building a State Pension from outside the UK have a sufficient link to the UK and are paying a fairer price to do so.

See Globally mobile employees: National Insurance

Updates to Double Taxation individual and company form guidance for UK REITs

HMRC have updated several Double Taxation forms and guidance relating to UK Real Estate Investment Trusts (REITs).

These updates will ensure the guidance is aligned with HMRC's current position.

The changes include clarification of:

When certification by an overseas tax authority is required and how this should be provided.
The requirements for letters of authority where agents act on behalf of claimants.

Agents must make sure they use the latest versions of the following forms and notes:

Double Taxation: UK Real Estate Investment Trusts (form UK REIT DT Individual).
International Tax: UK Real Estate Investment Trusts (form UK REIT DT Company).
International Tax: UK Real Estate Investment Trusts property income dividends: UK-Japan Double Taxation Convention.
International Tax: UK-USA Double Taxation Convention (form US Company UK REIT).

Register your interest: HMRC webinar on strengthened powers

HMRC are hosting a webinar to outline HMRC's strengthened powers to tackle tax advisers who facilitate non-compliance.

The webinar will be held on:

Wednesday 24 June at 1:45pm.
Thursday 9 July at 11:45am.

The session will cover:

What counts as a tax adviser.
What HMRC mean by sanctionable conduct.
What happens if HMRC identify sanctionable behaviour.
New powers enabling HMRC to publish information about tax advisers.

There will also be an opportunity to ask questions.

Borderline excepted estates: supporting agents to get IHT reporting right

Since changes were made to the excepted estate regulations in January 2022, more estates are now able to apply for a confirmation or grant of representation as excepted, meaning a full IHT account (IHT400) is not required.

There is now a large gap between liability to tax and accountability (returning an IHT400).

This gap is caused by the various Nil Rate Band (NRB) tax allowances.
Two are automatically due (NRB and Residence NRB), whereas the two transferable allowances must be claimed.

HMRC have noticed that some estates are choosing not to return an IHT400, although they are not excepted from doing so.

They are relying on the tax allowances to remove any IHT liability.
By failing to return an IHT400, these estates are running a risk that the tax allowances may not be correctly calculated or are out of time, because they needed to be claimed.
Where it subsequently emerges that tax is due, they will face tax and penalties.

To support agents in getting it right, HMRC are issuing an educational One to Many letter as part of the Borderline Excepted Estates project.

The letter is being sent to agents who have submitted excepted estate grants with values at or around the various NRB thresholds.
Its purpose is to identify common errors and misunderstandings around each of the NRB allowances, so that agents can avoid these pitfalls and claim them correctly.

The guidance encourages agents to ensure that estate valuations and allowance claims are accurate and well supported at the point of applying for probate.

Where there is uncertainty about eligibility or values, agents are reminded that submitting a full IHT400 may be the most appropriate route.
Relevant GOV.UK guidance is also signposted to support agents in checking the rules.

This is a preventative and educational exercise, not a compliance investigation.

By providing clear and practical guidance, the aim is to help agents and their clients get things right the first time and reduce the need for downstream checks later.

Update on HMRC compliance activity for creative tax reliefs

The operating landscape for creative tax reliefs continues to evolve, including changes in claimant behaviour and growth in the overall value of claims.

HMRC continue to examine recent trends to ensure they fully understand how the reliefs are operating in practice and any implications for compliance risk.
This may result in an increase in enquiries across relevant reliefs, including a small number of random enquiries.
This helps ensure assurance activity reflects the full population, not only cases already identified as higher risk.

HMRC will continue to ensure that all enquiries are conducted professionally, minimising any delay for taxpayers.

HMRC's focus remains on supporting taxpayers to get things right first time, while ensuring a fair, proportionate and evidence-based approach to compliance.

See Creative Industry Zone

Live webinar: the temporary repatriation facility and trusts

Live webinars are taking place on 30 June and 8 July 2026.

These will provide a high-level overview of the Temporary Repatriation Facility (TRF) for personal foreign income and gains before focusing on the TRF extension for trusts.
The content will be delivered across two sessions. Make sure you sign up for both part 1 and part 2.

In part 1, HMRC will cover:

Key TRF principles.
Application to trust capital distributions and differences from personal Foreign Income and Gains (FIG).
Qualifying overseas capital in relation to trust structure payments.
TRF treatments of trust benefits taxed under the transfer of assets abroad provisions.

In part 2, HMRC will cover:

TRF treatment of trust benefits under the settlement provisions.
Transitional trust income, protected foreign source income, and available protected income.
Capital payments from non-resident trusts and TRF treatment under capital gains provisions.
The concept of virtual matching.

The webinars are aimed at those with a working knowledge of the remittance basis, offshore anti-avoidance legislation, and an awareness of the background of the 2025 non-domicile reforms.

They focus only on the TRF and will not cover other aspects of the reforms.

External link

Issue 144 of agent update