This month’s content
Technical updates and reminders
Developments and changes to legislation and allowances relating to UK tax including:
Coronavirus (COVID-19) articles giving information on:
Tax
Making Tax Digital
HMRC agent services
Details of live consultations and links to responses, changes to HMRC service and guidance, including:
Agent forum and engagement
The latest updates from the partnership between HMRC and the main agent representative bodies. Including:
Technical updates and reminders
COVID-19
Find updated guidance for employers, businesses and employees, and more information on financial support for business.
Coronavirus Job Retention Scheme
The Coronavirus Job Retention Scheme (CJRS) closes on 30 September and final claims for September must be made by Thursday 14 October 2021.
In September, employers can claim 60% of furloughed employees’ usual wages for the hours not worked, up to a cap of £1,875 per month. Employers need to contribute 20% from their own funds so that their furloughed employees are paid at least 80% of their usual wages in total, for the hours they do not work (up to a cap of £2,500 a month).
You and your clients can find everything you need to help you make a claim on GOV.UK.
Further support
You and your clients can sign up to receive regular email updates from HMRC, to keep up to date with the latest information on our COVID-19 schemes. You can simply register and add the subscription topics you’re interested in.
Many agents have also benefitted from our webinars which offer information on the CJRS, other government support and how it applies to your clients.
Tax
How to get a duty deferment account if you have delayed declarations
This section provides you with a brief outline of the requirement changes concerning duty deferment and delayed declarations.
For non-controlled goods brought into Great Britain from the EU, you may be able to delay sending HMRC the full information about your goods by up to 175 days after import. To do this, they would need a duty deferment account to make supplementary declarations.
Find more information about delaying declarations for EU goods brought into Great Britain.
You can also check which type of account to apply for to defer duty payments.
As an intermediary, you can choose to use your duty deferment account on behalf of your clients or encourage them to apply for their own account.
If you require your client to set up their own duty deferment account, they will need to be approved by HMRC and set their account up within the 175 day deadline.
They should apply for their account as soon as they can after they’ve decided to delay their declarations. Your client will also need to provide written authority to HMRC before you can use their duty deferment account on their behalf.
Find out how to authorise someone to use your deferment approval number.
When we have all the information to process the duty deferment account application, we will aim to complete the process within 30 working days. However, if you or your client need to apply for a financial guarantee, this may take longer.
You must apply for your duty deferment account and Simplified Customs Declarations Processes authorisation in good time to meet the 175 day deadline for supplementary declarations.
If you use a full customs declaration to declare your goods to free circulation you or your client can choose to pay any import duties due using a duty deferment account or you will need access to another payment method.
Find more information about delaying declaration for EU goods brought into Great Britain and all the steps you need to take to prepare to make your supplementary declarations.
Tax conditionality
From April 2022 in England and Wales, the renewal of licences to drive taxis and private hire vehicles, to operate a private hire vehicle business, or deal in scrap metal, will only be given if the person applying can show they have completed a tax check with HMRC.
As decisions on applications for these licences are conditional on the tax check, this is known as ‘tax conditionality’.
When renewing their licences, applicants will need to complete a basic online check to confirm they are registered for tax if they need to be. This will help licence holders get their tax affairs right while making it harder for people to operate in the hidden economy. This will help create a level playing field for businesses in these sectors.
HMRC wants to help customers to understand and prepare for the changes next spring.
The licences which will be subject to this tax check are:
- taxi driver licences
- private hire vehicle (PHV) driver licences
- PHV operator licences
- mobile collector licences for scrap metal dealers
- site licences for scrap metal dealers
The role for agents
The tax check is not an enquiry or a compliance check into an individual’s affairs. It is a requirement that applicants will need to fulfil in to get their licence.
It is designed to make sure that those receiving a licence have complied with basic tax obligations, and it will become another check linked to the licensing process, similar to those fulfilled by applicants in relation to their driving licence status or right to work.
The new digital service is there to help applicants to complete the tax check. It will help them to pass on confirmation to a licensing body once the check is complete.
Most questions in the tax check relate to an applicant’s current or past licences. It also includes a small number of multiple-choice questions to determine whether applicants have notified chargeability to income tax or corporation tax, and whether income from the licensed activity has been reported on a tax return.
Because of the simple nature of the check and its link to licensing processes, the design of the service does not include an option for agents to complete the check on a client’s behalf.
We would expect agents to be involved in wider processes linked to the tax check. For example, this may include agents’ supporting customers who need to register for the appropriate tax.
HMRC is continuing to design the new service and has carried out user research with agents to enable them to see the prototype in development.
The idea of the service was well received by the agents who participated in the user research, and the large majority believed that their clients should be able to do the tax check on their own.
We will continue to engage with agents as we develop the tax check service. If you have any questions about tax conditionality or would like to meet and discuss it with us, email compliancepolicyisbc@hmrc.gov.uk
Find more information about HMRC’s strategy for tackling the hidden economy.
VAT reverse charge on construction and building services
VAT registered construction businesses should note that this reverse charge was introduced on 1 March 2021.
Find more information about domestic reverse charge VAT for construction services.
In January 2021, a letter was sent to every VAT-registered construction business. This followed letters previously sent out in February and September 2020, advising them to check if they’re liable for the reverse charge. If they’re liable, they need to apply these rules going forward.
Find more information on the scope and operation of the reverse charge.
The key aspects are:
- it applies to standard and reduced-rated supplies of building and construction services made to VAT registered businesses, who also make onward supplies of those building and construction services
- the contractor is responsible for paying the output VAT due rather than the sub-contractor, and can continue to reclaim this amount as input tax
- the scope of supplies affected is closely aligned to the supplies required to be reported under the Construction Industry Scheme (CIS), but does not include supplies of staff or workers for use by the customer
- the legislation introduces the concept of ‘end users’ and ‘intermediary suppliers’
The VAT reverse charge on construction and building services covers businesses or groups of associated businesses that do not make supplies of building and construction services to third parties and are excluded from the scope of the reverse charge if they receive such supplies.
Examples include:
- landlords
- tenants
- property developers
- public bodies who are deemed contractors for CIS purposes.
In order to be treated as end users and intermediary suppliers, the customer needs to notify the supplier in writing. This can be done by correspondence or as part of terms and conditions.
Find more information about VAT reverse charge.
We’ve been running webinars for businesses and you can register now. If there are no dates available, a webinar recording can be viewed.
Find more information on the Construction Industry Scheme.
The trust registration service
The trust registration service is now open for non-taxable trust registrations for all customers.
Non-taxable trusts have until 1 September 2022 to register. This is different to the date set in legislation at present, which the Government intends to amend to 1 September 2022, in due course.
All UK express trusts are now required to register with HMRC, including non-taxable trusts, unless the trust is specifically excluded.
Trusts that become registerable after 1 September 2022 must register within 90 days, and thereafter trustees must keep the information held on the Trust Registration Service updated within 90 days of a change in circumstances occurring. This is different to the date set in legislation at present, which the Government intends to amend, in due course.
Find more information about trusts that need to register and the trusts that are excluded.
Further detailed technical information can also be found in the Trust Registration Service Manual.
Find out how to register a trust as:
Student loans – occupational pension and off payroll working rules full payment submissions indicators
This information is for agents who operate payroll.
We have found some instances where the Full Payment Submissions show student loan deductions, but our investigations show the:
- occupational pension indicator is selected, and the customer’s payment does not relate to an occupational pension
- the off-payroll working rules indicator is selected but the customer does not fall within the rules
Student loan deductions are not due on:
- occupational pension scheme payments
- payments that are subject to the off-payroll working rule
If you have selected the occupational pension or off-payroll working rules indicator by mistake, you should unselect it immediately.
Selecting these indicators incorrectly will trigger generic notifications to be sent or we may call or write to take corrective action.
Find more information about Generic Notification Service (GNS) messages.
Making Tax Digital
Making Tax Digital for VAT
Manage your client’s VAT account online
Agents can access this service from their agent services account.
Agent feedback has identified a need to view client payment due dates and payment history online.
In response to this feedback we are delivering this functionality within the next few weeks.
We will let you know when the improvements have been delivered and would welcome your feedback.
Changes to the VAT group registration and amendments forms
As part of the introduction of VAT Groups to the new VAT registration service, HMRC has made changes to the VAT group registration and amendment forms. We have combined the previous VAT50 and VAT51 into one simpler form.
The benefits of this are:
- reducing the time it takes to complete the VAT registration and amendments process
- avoiding delays caused by missing documents being sent to HMRC
- removing any duplication of questions
- supporting correct identification of customers in line with the changes made to the VAT Registration Service
Initially this form will be required for all new VAT group registrations from 13 September 2021.
In later developments to the VAT registration service we will gather the data for up to 20 members digitally (97% of group registrations in 2019 to 2020).
The VAT50/51 form will still be required as an attachment for group registrations for the details of additional members where there are more than 20.
Changes to Group amendments will remain a manual print and post process going forward.
The new VAT50/51 form can be found on GOV.UK and, if you have a saved link to the VAT50 you will be directed to the new form.
We hope this change will be beneficial to both agents and their customers.
HMRC agent services
Agent talking points
All agents will be aware of our agent talking points webinars, for which most agents receive regular Monday morning updates.
In June’s Update we asked if there were any topics you would like us to cover. This opportunity is still open to you, let us know.
We are unable to give 100% assurance that these will be developed into a full talking points webinar. However, we would very much welcome any of your suggestions.
To send your requests or ideas, email mailbox.digitalsupport@hmrc.gov.uk
This is not a correspondence mailbox for customer or general queries, and we will not be able to deal with non-Talking Point related queries.
Support for customers who need extra help
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 what extra support is available.
Consultations
Check the status of tax policy consultations duplicated
Find out about ongoing and closed tax policy consultations by checking the status of tax policy consultations
This file is in an OpenDocument format.
Tax agent toolkits
HMRC have 19 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.
The complete catalogue of toolkits has been updated to assist you with completion of:
- 2019 to 2020 Company Tax Returns
- 2019 to 2020 Self Assessment Tax returns including Capital Gains Tax toolkits
- 2019 to 2020 National Insurance contributions and statutory payments, employers’ end of year forms and 2020 to 2021 record keeping
- 2019 to 2020 property rental income
- 2020 VAT toolkits
By identifying the most common errors this may prompt a conversation between you and your clients to make sure submissions are correct.
Agent authorisations when firms reorganise
We recognise that agents may need to reorganise their businesses due to internal restructures or as a result of a merger or takeover. This can result in the need to access and submit your client’s data using different Government Gateway credentials.
We have published additional guidance for agents on moving clients between client lists.
HMRC will not accept or action any requests to move a client to a different client list, whether as part of a restructuring such as a merger, sale of practice or any other reason.
Agents are required to provide a new authorisation from their client if they need to access the client on an alternative client list. We recognise this may impact agents and their client’s and want to explain this policy and offer some support to agents.
Agents can continue to use their existing authorisations until the new authorisation is in place although where an agent record is closed, for example due to the cessation of a business, the associated authorisations will also be terminated.
If an agent recognises their client’s consent is no longer valid, they should seek to deauthorise the client to protect their data.
Agent service accounts
Agent service account are created using the legal entity of the business, such as a sole trader, partnership or company, and a single agent reference number is allocated to the business.
All agent-client authorisations created within the agent service account are held against the single agent reference number.
When a business changes their legal entity, it means they will need to create a new agent service account. This also means new client authorisations are needed to make sure the client is consenting to the new legal entity acting on their behalf.
Services outside of the agent service account
Agents can access services not within the agent service account, on a tax-by-tax basis which requires agents to register for each separate service.
Agents are allocated an agent code once they have registered, and it is possible for one agent to have several agent codes, either for separate taxes, or for different offices.
When an agent-client relationship is created using an authorisation process, the agent code is used to indicate which client list to add the customer to. This means the client is authorising the agent code, not the agent business. Anybody within the agent business who has permissions to use the agent code, or the User ID registered against the agent code, can act for the client.
If an agent wants to move a client to an alternative client list, the original customer consent will not be valid for this purpose, as it only gives HMRC permission to share their data with the business using the originally stated agent code.
To protect customer data, we need to make sure that client consent is given and so a new authorisation must be provided to HMRC against the new agent code, evidencing the customer’s agreement for their data to be shared with a user on the new agent code. We will then process the authorisation, to allow the client’s information to be accessed against the new agent code.
Support available
We recognise that processing new authorisations can be time consuming and requires careful planning. Agents are invited to make use of the different authorisation services available to meet their specific needs.
Information about the different authorisation services available can be found in Agent Update 81.
Paper authorisation processes can be slower, so we recommend alternative and faster digital authorisation routes where available.
Agents are reminded of the online agent authorisation service which is available within the HMRC online service for agents account
You can also use instant authorisation that can be done by the client through their business tax account for some services. Agents need to provide the client with the Agent Government Gateway ID. Agents can find their Agent Government Gateway Identifier by logging on to HMRC online services for agents and selecting ‘Authorise client’ from the left-hand menu. The identifier will appear on the next screen under the title “Agent Identifier”.
You can use change of designatory details process which can be used to update each agent code where there is a change of business address or name, so that the existing agent code and associated client list can continue to be used. This process is not valid if the legal entity of your business is changing and will invalidate the client’s authorisation.
The Where’s My Reply? for tax agents service can be used to find out when to expect a reply from HMRC.
Tax Disputes
If your client in dispute with HMRC over an appealable tax decision, you may be interested in our alternative dispute resolution service.
This service involves an impartial HMRC mediator working with all parties to prevent unnecessary litigation.
We hope to resolve tax disputes within 120 days using a collaborative and flexible approach, which does not affect your client’s right to appeal or review.
Registering for self-employment and paying Class 2 National Insurance contributions without a National Insurance number
During the coronavirus (COVID-19) pandemic, Department for Work and Pensions suspended face-to-face interviews for customers applying for a National Insurance number.
HMRC advised those without a National Insurance number who wanted to register as self-employed, to complete form SA1 rather than a CWF1. The SA1 registered them for Self Assessment only, so the customer would need to contact HMRC once they had obtained a National Insurance number, to arrange collection of Class 2 National Insurance contributions.
You can now apply for a National Insurance number so customers can return to using form CWF1 to register as self-employed.
If any of your clients registered as self-employed using the SA1 form, they should contact the National Insurance helpline to arrange collection of Class 2 National Insurance contributions if they have not already done so.
VAT overseas refunds for non-UK businesses
We are inviting agents to take part in a trial of HMRC’s secure data exchange service. The trial starts this month (September 2021) and runs to 30 November 2021.
HMRC tested the secure data exchange service for overseas VAT refund claims with a small number of agents in 2020. We are now extending this trial to all agents with a history of submitting these claims to HMRC.
You can register your interest in taking part in the trial.
We are trialling the system as part of our work to transform tax and payments for customers, improving our processes and the overall customer journey. The SDES system allows large volumes of electronic data such as refund applications, and the required documentary evidence (the invoices), to be sent to HMRC quickly and securely.
Contact
Agent Blog
There is a regular tax agent blog, highlighting the work HMRC do with tax agents, advisers and professional bodies.
We cover agent specific news and updates, including consultations and HMRC’s agent strategy.
You can subscribe to receive a notification when a new blog is posted.
Complain to HMRC
To make a complaint to HMRC on behalf of your client you must be appointed as their tax advisor.
Employers need to register for email alerts
As the department moves rapidly down the digital road, it is becoming more apparent that the days of paper mailings are numbered. It is important agents encourage employers to register to receive email alerts, so they are aware of the latest coding changes and important information that is published on GOV.UK.
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 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
- amend your agent details.
Manuals
You can check the latest updates to HMRC manuals or subscribe to get an automatic notification of changes. You can also suggest improvements to manuals by using the feedback options in the page footer.
Residence, Domicile and Remittance Basis Manual and deemed domicile
The domicile chapter within the Residence, Domicile and Remittance Basis Manual has now been updated to include the changes applicable from the introduction of deemed domicile. For more information, see the Residence, Domicile and Remittance Basis Manual.
Online
Trusts and Estates newsletters
HMRC regularly publishes a Trusts and Estates newsletter. It contains the latest news, updates and guidance on Inheritance Tax and trusts.
Future online services downtime
Information is available about any service availability and issues affecting HMRC’s online services.
Online security — stay safe online
HMRC continuously monitors systems and customer records to guard against fraudulent activity, providing regular updates on phishing and scams we are aware of. If you have any concerns about the authenticity of any emails received from HMRC, see the online security pages for agents and examples of HMRC related phishing.
A new type of phishing scam regarding ‘Tax Returns’, which is being circulated in high volumes, has been added.
Find more information about help and support 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.
Publications
Find information about tax avoidance schemes currently in the spotlight.
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, they can register to receive the email alerts.
Countdown bulletins for pension scheme administrators
Find information about bulletins for pension scheme administrators which provide additional guidance about the ending of contracting-out.
Pension schemes newsletter
Pension scheme newsletters are published by HMRC’s Pension Schemes Services to update stakeholders on the latest news for pension schemes.
Revenue and Customs Briefs
Revenue and Customs Briefs announce changes in policy or set 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.
Agent forum and engagement
Agent Forum update
The Agent Forum is a platform where agents raise potential widespread issues and ask questions about HMRC’s systems and processes which may have significant impact on the agent community.
Agents can register for the Agent Forum.
A new Agent Forum Good Practice Guide has been published in September 2021 and agents are encouraged to read the updated guidance. Titles of new threads should clearly indicate the subject, and content be concise and focused on evidence that support an issue may exists.
Issues escalated on the Agent Forum
Issues identified by the Issues Overview Group and Agent Support Group as can be found on the agent forum escalated issues board. This groups and provides links to related threads on the main forum. The current escalated issues are:
- Self Assessment refund security checks
- P800
- HMRC emails
- processing times
- reporting Capital Gains Tax within 30 days
- authentication of software for an application programming interface
- Self Assessment application programming interfaces not returning expected data
UK Property Reporting service
The Issues Overview Group met with the HMRC teams responsible for the UK Property Reporting Service on 24 August 2021. Questions and answers continue to be published on the Agent Forum and circulated by professional bodies to their members. Agents are invited to continue to forward issues they are encountering to aid this work and further strengthen delivery of the service.
Agent Dedicated Line
The trial of the repurposed Agent Dedicated Line, launched on 14 June 2021 is continuing.
Professional Bodies are meeting HMRC during September 2021 to provide feedback and review performance of the trial
Application programming interface
Work continues to resolve the application programming interface queries on the Agent Forum with a presentation on the subject delivered to the Issues Overview Group on 1 September 2021.
A further meeting with the teams developing and monitoring application programming interface is being scheduled for October 2021 if required.
Working Together Contact information for Professional and Representative Bodies
AAT
ACCA Jason Piper
AIA David Potts
ATT Jon Stride
CIMA
CIOT Technical
CIPP Lora Murphy
CPAA Alison Hale
IAB
ICAEW Caroline Miskin
ICAS Tax Team
ICB Jacquie Mount
ICPA Tony Margaritelli
IFA Anne Davis
VATPG Ruth Corkin
If you’re not a member of a professional body, contact the Agent Engagement mailbox.
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