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Notices made under regulations 3, 8, 12 and 16 of the Income Tax (Digital Requirements) Regulations 2021 (SI 2021) No. 1076)

Published 1 July 2022

The Commissioners for Her Majesty’s Revenue and Customs (HMRC) make the following notices in exercise of the powers conferred by regulations 3, 8, 12 and 16 of the Income Tax (Digital Requirements) Regulations 2021 (SI 2021/1076).

Software notice – made further to regulation 3

Functional compatible software must comply with the following condition: once a digital record has been entered into a software program that forms part of the functional compatible software, any transfer, recapture, or modification of that digital record within the functional compatible software must happen digitally and not manually.

Update notice – made further to regulation 8

The update information that must be provided in a quarterly update is dependent on the relevant person’s business or businesses.

Businesses with trade profits (income chargeable under Part 2 of the Income Tax (Trading and Other Income) Act 2005 (ITTOIA))

A relevant person with trading income must provide the following update information in each quarterly update:

• quarterly period start date

• quarterly period end date

• totals of the amounts falling within the categories of transactions set out in the following table:

Transactions that lead to business income	Transactions that lead to business expenses
Turnover	Cost of goods bought for resale or goods used
Other business income	Construction industry – payments to subcontractors
	Wages, salaries, and other staff costs
	Car, van, and travel expenses
	Rent, rates, power, and insurance costs
	Repairs and maintenance of property and equipment
	Phone, fax, stationery, and other office costs
	Advertising and business entertainment costs
	Interest on bank and other loans
	Bank, credit card and other financial charges
	Irrecoverable debts written off
	Accountancy, legal and other professional fees
	Depreciation and loss or profit on sale of assets
	Other business expenses

Businesses with property income (income chargeable under Part 3 of ITTOIA)

A relevant person with property income must provide the following update information in each quarterly update:

• quarterly period start date

• quarterly period end date

• totals of the amounts falling within the categories of transactions set out in the following table:

UK property (not UK or EEA Furnished Holiday Let (FHL))

Transactions that lead to property income	Transactions that lead to property expenses
Total rents	Rent, rates, insurance, ground rents
Other income	Property repairs and maintenance
Tax taken from total rents and other income from property	Residential property finance costs
Premiums for the grant of a lease	Non-residential property finance costs
Reverse premiums and inducements	Legal, management and other professional fees
	Costs of services provided, including wages
	Other allowable property expenses

Overseas property (not EEA FHL)

Transactions that lead to property income	Transactions that lead to property expenses
Total rents	Rent, rates, insurance, ground rents
Premiums paid for the grant of a lease	Property repairs and maintenance
Other receipts	Residential property finance costs
	Non-residential property finance costs
	Legal, management and other professional fees
	Costs of services provided, including wages
	Other allowable property expenses

UK FHL

Transactions that lead to property income	Transactions that lead to property expenses
Rent received	Rent paid, repairs insurance and costs of services provided
Income from any services provided to tenants	Loan interest and other financial costs
	Legal, management and other professional fees
	Other allowable property expenses

EEA FHL

Transactions that lead to property income	Transactions that lead to property expenses
Rent received	Rent paid, repairs insurance and costs of services provided
	Loan interest and other financial costs
	Legal, management and other professional fees
	Other allowable property expenses

Turnover below the VAT registration threshold

A relevant person with an annual turnover below the VAT registration threshold, as amended from time to time, may choose to provide the total of all income and the total of all expenses instead of the totals of the amounts falling within each category of transaction listed in this Update Notice.

End of Period Notice – made further to regulation 12

The End of Period information that must be provided in an End of Period Statement (EOPS) is dependent on the relevant person’s business or businesses.

A relevant person must provide the following End of Period information in the EOPS:

• the totals of the amounts falling within the applicable categories of transactions detailed the Update Notice

• the additional information set out in this End of Period Notice

Where a relevant person has not already decided whether the amounts included in each expense category of transaction set out in the Update Notice include any elements which are disallowable, the relevant person must remove any disallowable expenditure prior to providing the EOPS total for the relevant period.

Additional End of Period information to be provided in the EOPS

Businesses with Trade Profits (income chargeable to Part 2 of ITTOIA)

A relevant person with trading income must provide totals of the amounts falling within the following categories:

• Annual Investment Allowance
• capital allowances for main pool costs
• capital allowances for special pool costs
• capital allowances for single asset pool costs
• zero-emission goods vehicle allowance
• customers’ Premises Renovation Allowance
• 100% and other enhanced capital allowances
• allowances on sale or cessation of customers use
• balancing charge on sale or cessation of customers’ use (only where Customers’ Premises Renovation Allowance has been claimed)
• balancing charge on sales of other assets or on the cessation of customers use
• adjustment for change of accounting practice
• averaging adjustment
• adjusted profit or loss for the year
• adjustment to profits chargeable to Class 4 National Insurance contributions
• zero emissions car allowance
• electric charge point allowance
• structures and buildings allowance
• (Freeport) enhanced Structured Building Allowance (SBA)

Businesses with Property Income (income chargeable under Part 3 of ITTOIA)

A relevant person with property income must provide totals of the amounts falling within the following categories set out below:

• UK property (not UK FHL or EEA FHL):

  • private use adjustment
  • balancing charges
  • annual investment allowance
  • customers’ Premises Renovation Allowance
  • zero emission good vehicle allowance
  • other capital allowances
  • cost of replacing domestic items
  • rent a room exempt amount
  • loss brought forward used against this year’s profits
  • adjusted profit or loss for the year
  • property income allowance
  • zero emissions car allowance
  • electric charge point allowance
  • structures and buildings allowance
  • (Freeport) enhanced Structured Building Allowance (SBA)

• Overseas Property (not EEA FHL):

  • private use adjustment
  • balancing charges
  • capital allowances for equipment and vehicles
  • zero-emission goods vehicle allowance
  • cost of replacing domestic items
  • adjusted profit or loss for the year

• UK FHL:

  • private use adjustment
  • balancing charges
  • capital allowances
  • adjusted profit or loss for the year

• EEA FHL:

  • private use adjustment
  • balancing charges
  • capital allowances
  • adjusted profit or loss for the year

Turnover below the VAT registration threshold

A relevant person with an annual turnover below the VAT registration threshold, as amended from time to time, may choose to provide the total of all income and the total of all expenses instead of the totals of the amounts falling within each category of transaction listed in the Update Notice.

Retail sales notice – made further to regulation 16

In respect of the retail sales of the business of a retailer digital records means a single digital record of the daily gross takings for any retail sales made.

The gross daily retail sales digital record must include:

• all payments as they are received by the relevant person or on the relevant person’s behalf from its own cash paying retail consumers. This includes payments by cheque, debit or credit card, maestro, visa or similar electronic transactions and electronic cash

• the full value of all credit or other non-cash retail sales received by the relevant person or on the relevant person’s behalf. This includes the full value of credit sales, the cash value of payment in kind for retail sales, the face value of gift, book and record vouchers received and any other payments for retail sales including those sales completed via third party online sales platforms

The following may be excluded when calculating the amount of daily gross takings:

• counterfeit notes
• illegible credit card transactions
• inadvertent acceptance of a cheque guarantee card as a credit card
• inadvertent acceptance of foreign currency (where discovered after their acceptance)
• inadvertent acceptance of out-of-date coupons which are not honoured by promoters
• instalments in respect of credit sales
• receipts recording for supplies which are to be recorded outside of the election
• refunds to a consumer for overcharges or faulty/unsuitable goods
• float discrepancies
• unsigned or dishonoured cheques from cash customers
• use of training tills
• void transactions