Guidance

Issue 107 of Agent Update

Published 19 April 2023

This month’s content

Technical Updates and Reminders

Developments and changes to legislation and allowances relating to UK tax including:

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

Latest updates from the partnership between HMRC and the main agent representative bodies. Including:

Technical Updates and Reminders

Tax

Update to fix problems with payroll guidance and new process for overpayments of National Insurance contributions

As we have now entered the 2023 to 2024 tax year, we wanted to update agents and employers on an addition to the fix problems with running payroll guidance.

In the December Agent Update, we advised that GOV.UK guidance had been updated. This reflected the reduction in National Insurance contributions by 1.25 percentage points for employees, employers and the self-employed from 6 November 2022 for the rest of 2022 to 2023 tax year. We also advised that guidance to aid employers in fixing problems with payroll had been updated.

We wanted to inform agents of the latest developments for the current tax year so that you can advise your clients (many of whom may be employers or employees). Employers should still correct overpaid National Insurance contributions and submit a revised Full Payment Submission as normal to make the relevant corrections.

From May 2023, HMRC will be publishing a further update to guidance on how to fix problems with running payroll. In addition to Full Payment Submission, this will include details of how to submit applications via PAYE online and we will also be publishing a new process for employees or former employees, who have overpaid and whose employer cannot correct this for them.

Using the process, a customer will be able to ask for their 2022 to 2023 National Insurance contributions to be checked for an overpayment. HMRC will respond by writing to them in due course, explaining the outcome and they will receive a refund if one is due.  However, we do only expect this process to be needed in a small minority of cases.

When these changes are made in May, we will email all agents and employers on our database to alert them. You can sign up to receive email reminders if you do not currently receive Agent Update emails from HMRC.

Permanent Increase in the Annual Investment Allowance amount to £1 million

The Annual Investment Allowance is a capital allowance which provides relief for qualifying expenditure on the provision of plant and machinery up to a set amount of qualifying expenditure.

It was introduced with effect from 1 April 2008 and the amount has undergone numerous changes since its introduction.

It was set at £200,000 with effect from 1 January 2016 before being temporarily increased to £1,000,000 for a two-year period with effect from 1 January 2019. That temporary increase was extended twice and was due to expire on 31 March 2023 when the amount would have reverted to £200,000.

It was announced within the Growth Plan 2022 that the Annual Investment Allowance amount would be set at £1,000,000 with effect from 1 April 2023.

Transitional rules limiting the Annual Investment Allowance amount were introduced alongside the temporary increase and those applying to chargeable periods straddling 1 April 2023 are to be repealed, as they are no longer required.

Update to assessment year for Time to Pay arrangement for disguised remuneration and the loan charge

HMRC have updated the assessment approach used when determining customers eligibility for automatic Time to Pay arrangements, in relation to disguised remuneration settlements and the loan charge.

These arrangements provide automatic 5-year Time to Pay terms for individuals with earnings less than £50,000 and 7 years for those impacted by the Loan Charge who earned less than £30,000.

HMRC will now use the most recent complete tax-year information available to determine eligibility. This will allow a more current picture of the customer’s financial position enabling us to better understand their ability to pay.

Support is still available for customers who earn more than the £50,000 or need longer to pay through our standard Time to Pay offer, available to all customers. These Time to Pay arrangements are flexible and can be amended over time to take account of changes in a taxpayer’s circumstances.

Full details of our standard Time to Pay offer is available on GOV.UK.

Any existing arrangements will be unaffected.

The Second-hand Motor Vehicle Payment Scheme

In January 2023, HMRC published guidance on the second-hand motor vehicle payment scheme. The scheme is being introduced on 1 May 2023 and will allow VAT-registered businesses to claim a VAT-related payment if they buy a second-hand vehicle in Great Britain (England, Scotland and Wales) and move it to Northern Ireland for resale.

From 1 May 2023, businesses will no longer be able to use the VAT margin scheme in such cases when they sell the vehicle. Although VAT will be charged on the full selling price of the vehicle when it is sold, the VAT-related payment puts businesses who buy eligible vehicles from Great Britain, in a similar position to that of the VAT margin scheme.

Find guidance on GOV.UK on how to:

• claim a VAT-related payment if you buy second-hand motor vehicles in Great Britain and move them to Northern Ireland for resale
• check which records to keep for second-hand vehicles you move to Northern Ireland for resale
• check which motor vehicles are eligible for the second-hand motor vehicle payment scheme
• work out the value of a vehicle for the second-hand motor vehicle payment scheme

Research and Development tax relief reform: changes from 1 April 2023

On 1 April 2023 a range of Research and Development tax relief reforms came into effect.

Guidance on Research and Development tax relief changes can be found on GOV.UK. This includes information on the new Claim Notification and Additional Information requirements and their associated forms.

Homeworking deduction for expenses and benefits

The rules on tax relief for people working from home have been in place for many years and have not changed.

The COVID-19 pandemic resulted in millions of people becoming eligible for this tax relief as people were under a government mandate to work from home where possible. During this time, HMRC made it easier for people to claim the relief online.

With pandemic restrictions now lifted, we expect the number of people eligible for this tax relief to return to something close to pre-pandemic levels.

We’ve updated our guidance on GOV.UK to make the eligibility criteria clearer. This should help employers and their employees understand what can be claimed. Eligible customers can use the online service to claim for the number of weeks they qualify for during 2023 to 2024.

State Pension Arrears

In August 2020, the Department for Work and Pensions (DWP) began to make State Pension arrears payments to individuals who had been underpaid. This work will continue until December 2024.

HMRC will be assessing affected Self Assessment clients, to establish if additional tax is due. HMRC will only collect income tax for the current tax year and the previous 4 tax years.

A dedicated team will assess these cases from 11 April 2023 and issue letters to customers who have an additional tax liability. A copy of the letter will also be issued to authorised agents.

Customers who passed away before the date DWP paid the arrears will not be charged tax.

Plastic Packaging Tax Monthly Update — Spring Budget and Finance Bill 2023

As announced at Spring Budget, the Plastic Packaging Tax rate increased from £200 per tonne to £210.82 per tonne in line with the Consumer Price Index from 1 April 2023.

This change will maintain the real term value of the price incentive to use recycled plastic and supports the government’s environmental goals.

The new rate applies to all plastic packaging manufactured or imported into the UK on or after 1 April 2023. Any packaging that has been manufactured or imported prior to 1 April 2023 will be charged at the previous rate of £200 per tonne.

Find more information about the rate change from 1 April 2023 for Plastic Packaging Tax.

The government is also bringing forward technical changes to Plastic Packaging Tax penalties via the Finance Bill. The changes will ensure that the tax operates as intended and that taxpayers are treated fairly and consistently. The changes will simplify the late payment penalty regime for Plastic Packaging Tax and applies to all late payments in relation to accounting periods from 1 April 2023 onwards.

Statements on invoices

HMRC remain committed to the importance of making clear where Plastic Packaging Tax has been charged to encourage greater use of recycled plastic. Where possible, we encourage businesses liable to Plastic Packaging Tax, to provide information about the tax paid on invoices to business customers.

However, we will no longer be introducing this as a legal requirement.

Find more information about records and accounts you must keep for Plastic Packaging Tax, and also examples of other ways to make the tax visible to business customers.

We also encourage you to work with your business customers to try and increase, wherever possible, the amount of recycled plastic they use in their plastic packaging.

Registration and returns

If you manufacture or import 10 or more tonnes of plastic packaging within a 12 month period you must register for Plastic Packaging Tax on GOV.UK, even if your packaging contains 30% or more recycled plastic.

Plastic Packaging Tax also applies to plastic packaging that is imported already filled with goods — but you only need to account for the weight of the plastic packaging towards the 10-tonne threshold.

If you’re liable to register or have already registered, from 1 April 2023 you must submit your Plastic Packaging Tax return and pay any tax due by 28 April 2023.

Guidance enhancements

Guidance for Plastic Packaging Tax is available at our Plastic Packaging Tax collection page. We continue to enhance the Plastic Packaging Tax guidance pages to help address your frequently asked questions.

HMRC has produced the following resources to support businesses:

• Guidance: visit the Plastic Packaging Tax collection page for the latest guidance, including
  • Updates to the importers’ guidance on the Temporary Admission procedure for reusable packaging not intended for sale
  • Examples of packaging in and out of scope of Plastic Packaging Tax

• Step by step guides: read to learn about what is in scope, who is liable and needs to register

• Plastic Packaging Tax: steps to take

• Check which packaging is subject to Plastic Packaging Tax - GOV.UK (www.gov.uk)

This communication is generic and sent to all stakeholders signed up to the Plastic Packaging Tax mailing list.

Guidance on Plastic Packaging Tax is now available in Welsh at the collection page on GOV.UK.

Mandatory Disclosure Rules came into force on 28 March 2023

The UK Government has implemented the OECD Mandatory Disclosure Rules for Common Reporting Standard Avoidance Arrangements and Opaque Offshore Structures on 28 March 2023.

The secondary legislation was laid on 17 January 2022. Mandatory Disclosure Rules replaces the existing European Union wide legislation, DAC6.

Mandatory Disclosure Rules require Intermediaries or taxpayers to disclose information on certain arrangements.

These are:

• Common Reporting Standard avoidance arrangements where these circumvent reporting under the Common Reporting Standard. The Common Reporting Standard is an OECD framework. It provides for the exchange of financial account information, which helps tackle global tax evasion.
• Opaque Offshore structures. Reporting may be required where beneficial ownership of an offshore vehicle has been obscured.

The primary reporting responsibility falls to intermediaries. These are persons who design and market a reportable arrangement and those who assist with its design. Reports must be made within 30 days. Penalties may apply for failure to report.

Common Reporting Standard avoidance arrangements and Opaque Offshore structures will not be used by the vast majority of taxpayers, so it will not affect most people. However, if you need to consider whether you must report, you can refer to the following links. These provide more information about whether you have to report and how to do so.

• check if you need to tell us about an arrangement
• register for the Mandatory Disclosure Rules service
• report an arrangement through Mandatory Disclosure Rules
• use the schema and supporting documents to report

Economic Crime Levy for anti-money laundering regulated businesses

The Economic Crime Levy was introduced in Part 3 of Finance Act 2022, as part of the Government’s plan to develop a sustainable resourcing model for economic crime reform.

In the February edition of the Agent Update we told you that we would be publishing guidance on the Economic Crime Levy.

This guidance has now been published and can be found on GOV.UK.

It contains information on the following:

• checking if you need to register for the Economic Crime Levy
• registering for the Economic Crime Levy
• submitting a return for the Economic Crime Levy
• paying the Economic Crime Levy

Off-payroll working rules (IR35) — engaging contractors

It has been 2 years since the off-payroll working rules (IR35) changed in the private and voluntary sectors.

We have recently updated our Off-payroll working (IR35) guidance on GOV.UK to make it clearer and easier to use for customers who need it.

Some client organisations may need to operate the off-payroll working rules for the first time — either because they have not previously engaged contractors, or because they operate in the private and voluntary sectors and have recently met the size conditions.

You can help client organisations check the GOV.UK guidance and the Employment Status Manual to decide whether the rules apply to them every year. This is particularly true if they have:

• become a newly formed business
• been bought by another organisation
• changed size over the last few years
• started to engage contractors

The rules have not changed for contractors working through their own limited company, often known as a Personal Service Company, or other intermediary, who provide services to a small client organisation in the private and voluntary sectors. Contractors in these circumstances are still responsible for considering and applying the off-payroll, commonly known as IR35, rules.

Contractors may want to check that their client is a small organisation in the private or voluntary sectors. More information can be found on GOV.UK guidance for contractors.

Keeping records

Clients who engage contractors need to keep detailed records of their engagements, including:

• the names and addresses of both the contractor and their intermediary
• employment status determinations they make, including the reasons for the determinations
• fees paid

Information can be found in the off-payroll guidance for clients.

Further support

We are continuing to look for ways that we can improve the support we offer to customers to help them to comply with these rules. We welcome any feedback on what additional support may be useful for you, your clients, or the sector they work in.

You can email: offpayrollworking.legislation@hmrc.gov.uk

Tax and National Insurance contributions on termination payments

HMRC is raising awareness of the rules around Income Tax and National Insurance contributions treatment of termination payments, to help customers get their tax right. Several changes were made to these rules over the past 5 years including:

• the introduction of post-employment notice pay
• the removal of foreign service relief on termination payments to UK resident individuals
• clarification that the exemption for injury does not apply to injury to feelings
• alignment of the rules for Income Tax and National Insurance contributions

From 2018, post-employment notice pay was introduced to ensure non-contractual payments in lieu of notice are subject to tax and National Insurance contributions, the same as contractual and customary payments.

Prior to 2018, these payments would have been taxable, as falling within the scope of section 401 Income Tax (Earnings and Pensions) Act 2003. The amount within the termination payment calculated as post-employment notice pay, is now chargeable to Income Tax and National Insurance contributions as general earnings, and no longer benefits from the £30,000 threshold available in section 403 Income Tax (Earnings and Pensions) Act 2003.

In addition, changes to the rules on post-employment notice pay were introduced from 6 April 2021. These changes provide for an alternative method for the calculation of post-employment notice pay, where an employee’s pay period is defined in months, but their contractual notice period or post-employment notice period is not a whole number of months.

Non-resident individuals are now charged to UK tax as earnings on the post-employment notice pay to the extent that they would have worked during their notice period in the UK. Before this, the post-employment notice pay of non-UK resident employees from UK employments, was not subject to UK tax as earnings.

From 6 April 2018, the foreign service exemption is no longer available for payments and other benefits that fall within section 413 Income Tax (Earnings and Pensions) Act 2003, if specific criteria are met. Further details can be found in removal of foreign service relief for UK residents policy paper. The exemption still applies if the individual is not a UK resident during the year of termination, or the individual is a seafarer and has sufficient seafaring service.

From 6 April 2020, a change in legislation introduced a Class 1A National Insurance contributions charge on qualifying termination payments above the £30,000 exemption for tax, further details can be found in the treatment of termination payments policy paper.

Making sure the correct amount of tax is paid

To determine the correct tax treatment, you will need to identify what the payment is for.

A termination payment may consist of different types of payments such as:

• compensation for loss of office
• payment in lieu of notice
• damages
• redundancy
• holiday pay
• retirement
• illness or injury of an employee or
• payment for a restrictive covenant

These payments may be taxable as earnings under other provisions of Income Tax (Earnings and Pensions) Act 2003. The Employment Income Manual details how the legislation should be considered in a particular order.

If the termination payment is not taxable under the other provisions, it may be taxable as a termination payment under section 401 Income Tax (Earnings and Pensions) Act 2003. For guidance on this, you can see the Employment Income Manual. However, some payments such as those for an injury or illness or a payment of legal fees in respect of the termination may be excepted from tax.

For help in considering if there is a charge to tax and National Insurance, you can see tax on termination payments: What you pay tax and National Insurance on.

If you have not paid the correct amount of tax and National Insurance, corrections can be made via a Full Payment Submission. Use the ‘Data item box’ (Class 1A year- to-d Date) for amendments to the Class 1A National Insurance contributions.

Student and Postgraduate Loans

Student and postgraduate loan generic notification service messages

For agents who process payroll on behalf of a client

HMRC sends student and postgraduate loan generic notification service messages to payroll agents as a reminder to:

• start taking student or postgraduate loan deductions or both
• stop taking student or postgraduate loan deductions or both
• use the correct plan type HMRC has provided
• not to take student or postgraduate loan deductions or both for an employee who is subject to the off payroll working rules, or only has an occupational pension rather than a salary

It is important that you check the HMRC online services for generic notification service messages, as this impacts your employee’s student and postgraduate loan repayments.

If action has not been taken from the online service messages, then HMRC may contact you either by telephone or post.

More information on generic notification service messages is available on GOV.UK.

Student and postgraduate loan thresholds and rates from 6 April 2023

The 2023 to 2024 thresholds and rates for student and postgraduate loans were published in the February 2023 issue of Agent Update.

Full information on plan and loan types (including thresholds) is available on GOV.UK.

Update on UK implementation of global tax reform

Previous editions of Agent Update (105, 102 and 99) explained that work is ongoing to implement changes to the international corporate tax framework at UK level.

The government introduced legislation in the Finance Bill 2022 to 2023 on 23 March 2023, to implement the globally agreed G20-OECD Pillar 2 framework in the UK.

The legislation introduces a:

• multinational top-up tax which will require large UK headquartered multinational groups to pay a top-up tax where their foreign operations have an effective tax rate of less than 15%
• supplementary domestic top-up tax which will require large groups, including those operating exclusively in the UK, to pay a top-up tax where their UK operations have an effective tax rate of less than 15%

These changes will apply to large groups with over 750 million euros global revenues and will take effect in relation to accounting periods beginning on or after 31 December 2023.

HMRC is continuing to engage with key stakeholders such as representative and trade bodies. More details of this will be shared in coming months.

Preparing for the new tax year basis — Income Tax Self-Assessment

The rules HMRC uses to work out sole traders’ and partners’ profits for Income Tax in a Self Assessment return are changing for many businesses for 2023-2024 onwards. This may affect the return that they must submit by 31 January 2025. It will also affect subsequent returns.

This change is not affected by the delay to the introduction of Making Tax Digital for ITSA announced on 19 December 2022.

Only taxpayers with an accounting date other than 31 March or 5 April are affected by this reform.

Under the new rules, from April 2024, businesses will be taxed on profits for the tax year and not, as now, the profits for the accounting year ending in a tax year.

For 2024 to 2025 and future years where accounting years are different from the tax year end, the taxable profits will be worked out by apportioning the profits for the 2 accounting periods that straddle the tax year.

The year 2023 to 2024 is a ‘transition year’ in which self-employed businesses will move to the new way of calculating taxable profits for the tax year.

Businesses will need to declare the total profits from the end of the last accounting date in 2022 to 2023 up to 5 April 2024. This means that profits generated over a longer period will be taxable in the transition year.

In 2023 to 2024, businesses can use any overlap relief resulting from overlap profit when the business first started. By default, any remaining additional profit will be spread over 5 years.

As an example, if a business’s accounting date is 31 December 2023, they must declare profits from 1 January 2023 to 5 April 2024 (15 months rather than 12) in their tax return for the tax year 2023 to 2024, which is due by 31 January 2025.

The transition year 2023 to 2024 will present an opportunity for all businesses currently trading, regardless of accounting date, to use any overlap relief due.

From 2023 to 2024 onwards, some businesses might have to use provisional figures on their returns. HMRC will relax its guidance to give businesses the normal amendment time limits to submit their final figures if they have submitted provisional figures as part of their tax return.

Where a business’s accounting date is changed in 2022 to 2023, the current change of accounting date rules will apply. Where a business decides to change its accounting date from 2023 to 2024 onwards, these rules will not apply, and a change can be made regardless of past changes.

For businesses changing accounting date in the 2021 to 2022 tax year, HMRC will be able to provide details of overlap relief figures or historic profit figures on request, if these figures are recorded in HMRC systems. Taxpayers should ring the HMRC Self Assessment Helpline and agents should ring the Agent Dedicated Line if they need this information to complete a 2021 to 2022 tax return.

HMRC is currently developing an online form for submitting overlap relief requests, to provide an easier way to submit requests and to ensure that these are dealt with separately from general post. Alongside this online form, HMRC is training more officers to deal with overlap relief queries and is developing an internal tool to collect and quickly play back overlap relief information. This training and tool will help officers provide ongoing support for requests made through the new online form.

HMRC is planning to launch the online form and additional support this summer.

Overlap relief information can only be provided if these figures are recorded in HMRC systems, taken from information submitted by taxpayers as part of previous tax returns. If this information has not been submitted in tax returns, HMRC will not be able to provide it. The overlap relief information is the information provided on submitted tax returns in the past. In some cases (for example following an enquiry) the actual amounts of overlap relief may be different.

When looking at a request for overlap relief information, HMRC needs some information about a business to be able to find the correct figures to report back to the taxpayer. When submitting requests, HMRC ask that you provide as much of the following information as possible:

• taxpayer name​
• National insurance number or tax UTR ​
• name or description of business​
• whether this business is self-employment or part of a partnership
• if the business is part of a partnership, the partnership’s UTR
• date of commencement of the self-employment business, or date of commencement as a partner in partnership (if not known, then the tax year of commencement)
• the most recent period of account or basis period the business used

Ahead of further guidance being published soon on GOV.UK, the Basis Period Reform policy paper provides background information. Information is also available in a GOV.UK news article on basis period reform.

Annual Tell ABAB survey gives small businesses a big voice in the tax system

The annual Tell ABAB Survey 2023 is now available to complete. Commissioned by an independent body, the Administrative Burdens Advisory Board (ABAB), the survey provides crucial insight on the big issues faced by small businesses (including those who identify as tax agents) in the tax system.

ABAB is passionate about listening to and understanding the needs of the small business community. Board members come from a range of businesses and professions, and their goal is to support HMRC to make the tax system quicker and simpler for small businesses.

ABAB challenges HMRC on its performance, providing robust scrutiny against key initiatives, such as Making Tax Digital and Improving Customer Experience. Their annual report, which is sent directly to Treasury ministers, reviews HMRC’s progress against ABAB’s priorities.

If you are one of the 5.7 million small businesses (including sole traders, self-employed, micro-business, organisations or agents with fewer than 51 employees) in the UK, then the survey is your opportunity to provide ABAB with insight on the tax system which they can then use to support you. Tax agents play a crucial role in the success of the survey. In 2022, 32% of respondents identified as tax agents.

The survey takes approximately 10 minutes to complete, and it will be open until 2 May 2023. Results from the survey will be published in the ‘Tell ABAB’ report, which will be published on GOV.UK in summer 2023.

If you have any questions about the 2023 survey, you can email advisoryboard.adminburden@hmrc.gov.uk.

Making Tax Digital

Agent Services Account — Access Groups trial

We recently launched a new feature in the Agent Services Account — Access Groups.

This allows you to manage how your staff access client information.

One of the features is a Client List for Agents taking part in HMRC’s Access Groups trial.

View your Client List

If you’re already taking part in the trial and using Access Groups, you can view your Client List simply by navigating to the ‘manage account’ page of your Agent Services Account.

The Client List allows Agents to view all authorised clients on Agent Services Account services (except Income Record Viewer clients) and associated information in one convenient location. Further enhancements are planned.

If you’re taking part in the trial, users with administrative access can:

• search, sort and filter your Client List
• quickly view which client authorisations are in place and for which tax services
• amend references to easily identify clients
• view which access groups, if any, the client belongs to within the Agent Services Account

Interested in joining the trial

If you’re interested in joining the trial or would like to find out more, you can contact us at mtdgpvolunteers@hmrc.gov.uk.

Making Tax Digital for VAT — make sure your clients who file annually are ready

All VAT registered businesses must now use compatible software to keep VAT records digitally and file their VAT returns to HMRC, unless they are exempt.

Businesses that file their VAT returns annually will no longer be able to use their VAT online account and instead must use compatible software to file their future VAT returns.

If you work with VAT-registered businesses who file their VAT returns annually, check they’re on track to do this.

From 15 May 2023, if your clients do not file their VAT returns through compatible software, they may have to pay a penalty.

How to apply for an exemption from using software

If your client is already exempt from filing VAT returns online or if they or their business are subject to an insolvency procedure, they’re automatically exempt.

You can check if they can apply for an exemption on GOV‌‌‌.UK.

You can find more information on compatible software and how submit VAT Returns on GOV.UK.

HMRC Agent Services

Government’s Border Target Operating Model

On 5 April 2023, the Government’s Border Target Operating Model was published in draft form, setting out a new model for importing goods into the UK from countries inside and outside the EU.

The draft has been devised following extensive engagement with the border industry and businesses across the UK. A 6 week engagement period will now take place, with the final Target Operating Model to be published later this year.

The UK and devolved governments, in collaboration with traders and the border industry, have developed this new model which brings together policy and process improvement, technology and better use of data for importing goods into Great Britain. This will introduce the best possible arrangements for those importing from the EU and improve the experience of those importing from non-EU countries.

The Target Operating Model proposes a new approach to security controls (applying to all imports, and certain outbound movements) and biosecurity controls (applying to imports of animals, animal products, plants and plant products).

We will introduce full customs controls for EU and non-qualifying Northern Ireland goods moving from Ireland to Great Britain from 31 October 2023. This means that arrangements will change for goods arriving at Great Britain ports from Irish ports. We will ensure that Northern Ireland businesses will continue to have unfettered access when moving goods within the UK.

You can view the published Target Operating Model on GOV.UK.

Changes to Corporation Tax — Small Profits Rate, Marginal Relief and the CT600

From 1 April 2023 the main rate of Corporation Tax increased to 25% for companies with profits over £250,000, and a small profits rate of 19% has been introduced for companies with profits of £50,000 or less. Marginal Relief will apply for profits greater than £50,000 (the lower limit) up to £250,000 (the upper limit), providing a gradual increase in the effective Corporation Tax rate between the small profits rate and the main rate.

Corporation Tax rates and allowances.

New boxes are being introduced to the CT600, these boxes include box:

• 326 number of associated companies in this period
• 327 number of associated companies in the first financial year
• 328 number of associated companies in the second financial year
• 329 put an ‘X’ in box 329 if the company is chargeable at the small profits rate or is entitled to marginal relief

Box 435 is being renamed to ‘Marginal Relief’.

Link to CT600 2023 [Corporation Tax for Company Tax Return CT600 (2023) Version 3.

A new online service to Calculate Marginal Relief for Corporation Tax is available. This service allows companies and their agents to accurately calculate the amount of Marginal Relief applicable to companies with profits falling between the lower and upper limits.

The lower and upper limits are proportionately reduced for short accounting periods or the number of associated companies of the reference company.

Identity checking app — a way for HMRC customers to prove their identity

In August 2022, we told you that we were starting to offer some HMRC customers an alternative way to prove their identity to access our online services. This is one of the ways we are helping to make it easier for people to get their tax right, first time.

As part of the Government Gateway setup process, people can use the selfie camera on their mobile to confirm a match with either their UK driving licence or ePassport.

To use the free identity app, customers need to :

• have a working camera on their device
• use the Chrome browser if on an Android phone
• if on an iPhone, have an iPhone 7 or above to use an ePassport to prove their identity

If they prefer, customers can still opt to provide 2 forms of evidence instead of using the identity checking app.

Customers who already have HMRC sign in details and are using our online services will not need to prove their identity again.

The free identity app has been designed by Government Digital Service (GDS), which is continuing to improve, based on feedback from real users.

Later this year we aim to start rolling out GOV.UK One Login to individual HMRC customers who want to access our online services. This is a fast, simple and secure way for people to access government services and prove their identity. We will provide further details in future Agent Updates so that you can support your clients.

We are also asking you to remind your customers never to share their HMRC sign in details and to treat them with the same care as the sign in details for their bank.

Anti-Money Laundering Supervision YouTube videos to help businesses

HMRC has launched four new Anti-Money Laundering Supervision video guides to help customers get things right first time when registering with HMRC for money laundering supervision.

They are:

How do I register for anti-money laundering supervision which explains:

• creating a government gateway account
• logging in with your government gateway user ID and password
• applying to register and completing each section
• adding information about your business
• completing a declaration
• paying the fees

When and how do I pay for anti-money laundering supervision which explains:

• how to pay fees when you first apply to register
• when your annual supervision fee is due

How to pay your annual supervision fee or opt out of anti-money laundering supervision which explains:

• signing into your online account to pay your annual supervision fee
• how to deregister if you no longer need to be registered with HMRC under the money laundering regulations

What fees do I need to pay for anti-money laundering supervision which explains:

• what fees you need to pay
• registration fee
• fit and proper test or approval process fee
• annual fee for your premises

You can find all HMRC’s videos for Anti-Money Laundering Supervision on GOV.UK.

Update on Agent Dedicated Line

Between 17 April and 2 June 2023, the Agent Dedicated Line will only answer calls relating to Self Assessment late filling penalties and appeals and PAYE coding enquiries.

For all other enquiries you will need to use our online services or the main helplines, although it may take longer than usual to be answered. The Agent Dedicated Line will not answer any progress chasing calls. This is to make sure that we can give the best possible service to all customers at one of our busiest times.

HMRC’s online services

To help us provide the best service we can, we want to make sure that you always use our digital services where possible.

We’re continually updating and improving our digital services and have listed some useful links below. This includes a new YouTube animation on the Income Record Viewer which you can pass on to your clients to show them how to authorise your Income Record Viewer request.

• Income Record Viewer — check your clients pay and tax details, employment history and current year tax codes

• HMRC’s Service dashboard — you can check our current processing times and services levels for post and online requests

• Where’s my reply tool — find out when you can expect to get a reply from us for queries and requests you’ve made

• Agent Services Account — lets you include tax services onto your account such as Making Tax Digital VAT or the Trust Registration Service

• Self Assessment for agents — view your client’s PAYE coding notice, Self Assessment statements and payments, change clients contact details and much more

Tips for when you must use post

Going online provides instant access to information and is much quicker than calling or writing to us.

Our improved digital services means you don’t have to send us your paperwork. Online forms are less likely to be rejected due to errors or missing information and some of our digital services have help functions built in. Another bonus of going online is it’s better for the environment and reduces the carbon footprint.

If you do need to post us something these tips will help ensure your mail gets to the right place and can be dealt with as quickly as possible:

• use the right postcode and put the full postcode on the envelope, for example BX9 1AS

• use letter headings so they get to the right department — here’s a helpful list of letter headings specifically for agents and links to find the correct postal address

• put any identifiers such as your client’s National Insurance number and Unique Taxpayer Reference (if they have one) on the first page and make sure they’re clear and prominent

• only include supporting documents if they’ve been asked for or are needed, this includes covering letters

• do not use the word ‘complaint’ unless it’s a genuine complaint

• make sure any print and post forms are complete and correct but remember if you can do it online it will be quicker

Support for customers who need extra help

We have principles of support for customers who need extra help.

Find out how to get help and what extra support is available.

Tax Agent Toolkits

HMRC have 20 Tax 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.

Our toolkits are currently being updated.

Here is the breakdown of toolkits by category:

• Capital Gains Tax toolkits
• Toolkits for Companies
• Employer toolkits
• Toolkits for Individuals
• Property Rental toolkit
• Trusts and Estates toolkits
• VAT toolkits

By identifying the most common errors this may prompt a conversation between you and your clients to ensure submissions are correct.

Contact

Complain to 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

You can check the latest updates to HMRC manuals or subscribe to automatic notification of changes. You can also suggest improvements for pages of our manuals by using the feedback options in the page footer.

Online

Online training material and useful resources 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

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 on the website, they must first register to receive the email alerts.

National Insurance Services to Pensions Industry: countdown bulletins.

Countdown Bulletin 53 has been added to this collection.

Pension schemes newsletter.

This newsletter is published by HMRC’s Pension Schemes Services to update stakeholders on the latest news for pension schemes.

Revenue and Customs briefs.

These are briefs announcing changes in policy or setting 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

Issues Overview Group

Marriage Allowance Bespoke Meeting

The Issues Overview Group held a bespoke meeting in late March focused on Marriage Allowance. Subject Matter Experts summarised concerns arising from the Agent Online Forum and those raised directly by Issues Overview Group members.

A key issue addressed was to improve the guidance available in making claims and the preferred order in which returns should be filed for recipient and transferor.

The Subject Matter Experts for Marriage Allowance have taken away the comments raised, together with their own findings, and are investigating the root causes and potential solutions. An update will be provided at the Issues Overview Group meeting in May and in future Agent Updates.

HMRC emails that cannot be linked to a client — SA-11680

Agents have submitted examples of HMRC emails they have received which they are unable to link to their client or clients. These examples are being used as part of the ongoing discussions to better understand the full scope of the issue, and to identify suitable resolutions for each service.

Agent Digital Design and Advisory Group

The purpose of this group of Professional Bodies, Agents and Software Development Associations is to provide early input into the creation and design of services for Agents.

Discussions in the March meeting included utilising technology to automate paper forms submitted to HMRC, and the use of digital assistants on the HMRC telephony platform. HMRC also provided an outline of work planned to transform Agent Authorisation.

There was good discussion on the plans and the professional bodies would like the opportunity to get into the finer detail, emphasising that clarity and early engagement would be welcomed.

More information on the developments will be provide to the group at a later date.

HMRC Annual Stakeholder Conference

HMRC is taking forward the shared opportunities and actions identified during the workshops at the annual Stakeholder Conference in February.

Key initiatives include:

• simplifying forms and guidance
• improving the HMRC Service Dashboard so it provides improved information for Agents
• providing a roadmap of top priorities for the years ahead for intermediaries
• seeking to strengthen forums and co-operation

An update on work arising from the Annual Stakeholder Conference will be provided in Agent Update in July.

Contact Information for professional and representative bodies

AAT

ACCA Jason Piper

AIA David Potts

ATT

CIMA

CIOT Technical

CIPP Lora Murphy

CPAA Alison Hale

IAB

ICAEW Caroline Miskin

ICAS Tax Team

ICB Jacquie Mount

ICPA Tony Margaritelli

IFA John Edwards

VATPG Ruth Corkin

If you are not a member of a professional body, contact the Agent Engagement Mailbox.