Guidance

Issue 110 of Agent Update

Updated 25 July 2023

This month’s content

Technical Updates and Reminders

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

Tax

EU Exit

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

Taxpayers given to 5 April 2025 for voluntary National Insurance contributions

The deadline for eligible customers to fill gaps in their National Insurance records for the tax years 2006 onwards has been extended until 5 April 2025.

This means men born after 5 April 1951, or women born after 5 April 1953, have more time to check their records, decide whether to pay voluntary contributions to make up for gaps in their National Insurance record and can afford to do so if they choose.

The assistance of the agent community in making their clients aware of the extended deadline would be appreciated.

Payment protection insurance (PPI) (R40) claims

Helpful hints for completing Payment protection insurance (PPI) (R40) claims to enable claims to be processed quickly and efficiently.

1. Ensure you are using the latest form held on GOV.UK.

2. Do not amend the layout of the R40.

3. If you are printing off or scanning a document, all boxes including edges and surrounding areas must be clearly legible prior to submission to HMRC.

4. If your client has named you as nominee to receive the repayment on their behalf, ensure your business name (in boxes 1.5 and 11.2) is no more than 28 characters in length, including spaces. Names in both fields should be identical and accurately printed.

5. Ensure all required fields, including monetary fields, are accurately completed. Do not give rounded figures.

6. Ensure personal details provided are the most up-to-date and full names given.

7. Check PAYE income details accurately reflect monies received. Taxpayers can find this information on their P60s, Personal Tax Account or the HMRC app.

Influencing your clients to do their tax returns now

You may have seen our tweets and news items on GOV.UK and other activity highlighting the benefits of filing tax returns early.

Getting customers to change their habits can be a challenge, but your influence as a tax expert is key. When you next communicate with your Self Assessment clients, you may want to include practical steps they can make to assist you in completing their tax return early, along with the following messages to encourage them.

Benefits of doing your tax return now

• submitting your tax return now does not mean you pay now — when you submit your tax return, you’ll know how much you need to pay, so you can plan your finances and cash flow better — this might mean you can book a holiday, make an investment or it may mean you have to save for your tax bill
• your tax return provides you with proof of income — you’ll need this if you apply for a mortgage, loan, or if you need to access certain benefits and schemes such as Tax-Free Childcare
• you can claim a refund faster — if you’re due one
• knowing what you owe, might mean you can reduce your payments on account if your tax bill is lower than forecast
• you’ll avoid any chance of getting a penalty for submitting your tax return late, so do it now and get it out of the way
• beat the rush — HMRC’s busiest time is January so if something goes wrong and you need to contact them, you might find it hard to get through
• peace of mind — so you can get on with the important things in your life

For more information on filing early, please see our article in issue 109.

Alcohol Duty new rates and reliefs — get ready for the changes by 1 August 2023

At Spring Budget 2023 the Chancellor confirmed changes to the structure of the alcohol duty system, creating standardised tax bands for all alcoholic products based on their alcohol by volume (ABV).

The changes to the Alcohol Duty structure, the new duty rates and reliefs will take effect next month, from 1 August 2023. This will include:

• a Small Producer Relief — which reforms and extends the relief currently enjoyed by small breweries, to producers of all alcoholic products under 8.5% ABV
• a reduced rate for draught products, also known as Draught Relief, which reduces the duty owed on draught alcoholic products which are under 8.5% ABV, packaged in containers of at least 20 litres, and designed to connect to a qualifying dispense system
• transitional arrangements for producers and importers of some wine products, this will help with moving to the new method of calculating the duty on their products and will be in place for 18 months, from 1 August 2023 until 1 February 2025 — this will allow businesses to use an ‘assumed strength’ of 12.5% when calculating the duty owed on wines between 11.5% and 14.5% ABV

To learn more and prepare, read the guidance on Alcohol Duty changes on GOV.UK.

You can sign up to our live webinars on 8 and 10 August 2023 to ask us your questions, or watch recordings from previous webinars on GOV.UK.

Do not forget, if you support a small producer they can also use the Small Producers Relief calculator on GOV.UK to work out their reduced duty rate.

Research and Development (R&D) tax relief reform — updates

Change of enforcement date for new claim notification and additional information requirements — 8 August 2023

New claim notification and additional information requirements will not be enforced until 8 August 2023.

Originally due to come into effect on 1 August 2023, ‘The relief for research and development (content of claim notifications, additional information requirements and miscellaneous amendments) regulations 2023’ will now be laid a week later than expected due to delays in Finance Bill timetabling.

Reminder: requirements for claiming R&D tax relief as of 1 April 2023

For accounting periods starting on or after 1 April 2023:

• some customers are required to provide claim notification ahead of a claim for R&D tax relief — claim notification must be provided via an online form and submitted no later than six months after the end of the period of account that the claim falls into
• customers will be able to claim qualifying expenditure on data licences and cloud computing costs

Read more on how to access the claim notification form, including what is required and when to submit.

From 8 August 2023, all companies will be required to submit an additional information online form before your company’s Corporation Tax return containing the claim.

Find out how to access the additional information form, including what is required and when to submit.

Economic Crime (Anti-Money Laundering) Levy — HMRC Online Service now open for registrations and returns

We told you last month that the Economic Crime (Anti-Money Laundering) Levy (ECL) service had opened for ECL registrations. We are pleased to tell you that, in addition to registering for ECL, anti-money laundering regulated businesses can now also submit returns using the ECL Service.

Tax agents cannot register or submit ECL returns for their clients, so affected entities must register and submit returns themselves.

Customers who have already registered for ECL and have not yet submitted their return, can now access the service to do so.

Customers who have not yet registered for ECL can still do so by accessing the service and requesting an access code. Once registered, customers will be able to submit their return.

Customers can access the ECL online service via GOV.UK.

To complete the registration process customers will need:

• information about their UK revenue for the last financial year

• the date when the organisation started anti-money laundering regulated activities

• the contact details of a responsible person in their organisation, including all of the following:
  • name
  • role
  • email address
  • telephone number
• the business sector the organisation operates in

Once customers have completed their ECL registration they will receive an ECL registration number.

Background information on ECL, including understanding who the relevant collection authority is, can be found at GOV.UK.

The information in this message is only for those whose collection authority is HMRC.

Affected customers will only need to register for the ECL once but will need to submit an online return and pay the ECL every year that their UK revenue exceeds the threshold.

Customers must submit a return and make their ECL payment by 30 September each year.

The payment for the financial year from 1 April 2022 to 31 March 2023 is due on 30 September 2023.

To pay ECL to HMRC, customers will first need to register before declaring and paying their liability.

The HMRC online service will be updated in the coming months so that customers can make their ECL payment. HMRC will issue a further message when this update has been made.

Overlap Relief — preparing for the new tax year basis

This summer, HMRC is planning to launch an online form for submitting requests for details about overlap relief. This will provide an easier way to submit requests and make sure that these are dealt with separately from general post.

HMRC will also be publishing additional accompanying guidance on overlap relief and the changes to the rules for the new tax year basis.

Taxpayers with an accounting date other than 31 March or 5 April who are affected by the move to the new tax year basis may need to find out the details of their overlap relief. They’ll need to do this ahead of submitting returns for the 2023 to 2024 transitional year.

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.

When looking at a request for overlap relief information, HMRC needs some details about a business to be able to find the correct figures to report back to the taxpayer. If they want to submit a request for information ahead of the launch of the online form, HMRC asks that they provide as much of the following information as possible:

• customer name
• National Insurance number or Unique Taxpayer Reference (UTR)
• either name or description of business, or both
• whether this business is a sole trader or part of a partnership

• if the business is part of a partnership, the partnership’s UTR

• date of commencement of the self-employed business, or date of commencement as a partner in a partnership (if not known, then the tax year of commencement)
• the most recent period end date up to which the business used to report its profit or loss

Ahead of more guidance being published on GOV.UK, information on overlap relief and basis period reform is provided in the Business Income Manual. Information is also available in a GOV.UK news article on basis period reform.

Tobacco Track & Trace Sanctions

HMRC has introduced new regulations which provide for stronger penalties and other sanctions for businesses or individuals who deal with illicit tobacco and contravene the requirements of the Tobacco Products (Traceability and Security Features) Regulations 2019.

Potential contraventions will be investigated by Trading Standards and evidence will be passed to HMRC to impose sanctions where appropriate. The sanctions are part of a government manifesto commitment to introduce new anti-evasion measures.

From 20 July 2023, failure to comply with the requirements of the Tobacco Track and Trace (TT&T) regulations in the UK may result in the issue of financial penalties, seizure of certain tobacco products found at non-compliant premises and the exclusion of retailers from the TT&T registration system.

Find out more about tobacco track and trace on GOV.UK.

Further information on the TT&T system for tobacco products can be found in tobacco traceability guidance.

Update on UK implementation of global tax reform

Previous editions of Agent Update (Agent Update 107, Agent Update 105, Agent Update 102 and Agent Update 99) explained that work is ongoing to implement changes to the international corporate tax framework at UK level.

We know that agents have an important role to play in helping businesses meet their obligations. Therefore, we wanted to make you aware that we have contacted groups with a UK presence who may be in scope of Pillar 2. We have provided key information about the new international tax framework and where they can find further guidance.

We’ll be providing regular updates on Pillar 2 developments to support business with the upcoming change.

We’ve set up a new Pillar 2 Compliance team. The team will work with the adviser community, to help us understand any problems groups may have, and what action we can take to overcome them.

You can contact the Pillar 2 Compliance team at pillar2mailbox@hmrc.gov.uk.

If you represent a group that is in scope of Pillar 2 and they have not received a letter, or you would like to subscribe to our Pillar 2 updates, please contact your Customer Compliance Manager, if you have one, or email the mailbox.

We also published draft technical guidance on multinational top-up tax and Domestic top-up tax, following their introduction in the Finance Bill 2022/23. This guidance provides additional information on which groups will be in scope, and how the taxes will be administered and charged. We are encouraging stakeholders to share their comments on the draft manual and any additional material that the manual should cover, for example, specific parts of the legislation that where further guidance would be beneficial.

Stakeholders can provide comments by emailing pillar2.consultation@hmrc.gov.uk and including “HMRC guidance manual” in the subject line. The consultation closes on 12 September 2023.

EU Exit

UK Internal Market Scheme (UKIMS)

From 30‌‌‌ ‌‌September 2023, a new UK Internal Market Scheme will launch to replace the existing UK Trader Scheme.

Earlier this year, the government and the EU agreed the Windsor Framework. The agreement establishes a new scheme, the UK Internal Market Scheme (UKIMS), for the movement of ‘not at risk’ goods into Northern Ireland. The scheme is now open for registration and will replace the UK Trader Scheme (UKTS) from 30‌‌‌ ‌‌September 2023. The UK Internal Market Scheme will continue to enable registered traders to move goods in line with existing ‘not at risk’ arrangements. It will also, from October‌‌‌ ‌‌2024, ensure that ‘not at risk’ movements are also freed of unnecessary paperwork, checks and duties. Only existing commercial information will be needed.

The new UK Internal Market Scheme will significantly expand the number of businesses eligible to move goods as ‘not at risk’ of entering the EU through 3 important changes:

1. All businesses established in the United Kingdom will now be eligible and will move away from the previous restrictions that required a physical premises in Northern Ireland.

2. We will increase the turnover threshold below which companies involved in processing can move goods from the current £500,000 limit up to £2 million.

3. Even if businesses are above that threshold, they will be eligible to move goods under the scheme if those goods are for use in the animal feed, healthcare, construction and not-for-profit sectors. They will be able to do this even if they sell on the eventual product to one subsequent entity in the supply chain, in a significant improvement to existing arrangements. Inputs into food production will continue to benefit from inclusion in the ‘not at risk’ definition.

Once traders receive confirmation of their UK Internal Market Scheme authorisation, they can start using it straight away. However, they must not declare goods ‘not at risk’ under the expanded commercial processing criteria until they come into effect on 30‌‌‌‌‌‌ ‌‌September 2023. The guidance explains the UK Internal Market Scheme in full. We have written directly to UKTS authorisation holders and asked them to provide information to become authorised onto the new scheme.

As the scope and benefits of the scheme have been expanded, in order for HMRC to complete their enrolment onto the new scheme, traders will need to provide us with some additional information so that we can carry out these checks. We would encourage you to support any businesses that you work with who are UKTS authorised to transfer their authorisation onto the new UK Internal Market Scheme by 31‌‌‌ ‌‌July 2023, to ensure that we can complete their enrolment onto the UK Internal Market Scheme by 30 September 2023. From 30‌‌‌ ‌‌September 2023, the UK Trader Scheme will no longer be used as the authorisation for moving ‘Not at risk’ goods into Northern Ireland, and traders will need to use your new UK Internal Market Scheme authorisation, once it has been granted.

Developing Countries Trading Scheme (DCTS)

The Developing Countries Trading Scheme (DCTS) came into force on 19 June 2023, replacing the UK Generalised Scheme of Preferences (UK GSP).

There is a grace period allowing the use of UK GSP documents to claim preference for:

• goods that qualify for a preferential duty rate under DCTS, providing the UK GSP proof of origin is issued on or before 31 December 2023

• DCTS qualifying goods that are in storage or in transit after 19 June 2023, a claim to DCTS preference can be made on release to free circulation using a UK GSP proof of origin, providing it is issued on or before 31 December 2023

• retrospective claims to DCTS preference can be made using a UK GSP proof of origin, provided it was issued on or before 31 December 2023

The proofs of origin for DCTS are the same as for UK GSP — an origin declaration or a GSP Form A, issued by the exporter in the DCTS beneficiary country.

Read more information about DCTS.

HMRC Agent Services

Let us know what you think of our manuals

We recognise the important role that tax advisers play in helping taxpayers navigate the tax system, comply with their obligations, and receive their entitlements. Therefore, we would like your feedback on our manuals so that we can provide you with the best possible information to support your clients.

We have 90,000 pages of content in our HMRC manuals collection on GOV.UK which as you can imagine, is a challenge to manage, maintain and improve. If you use our manuals, you can help by leaving feedback — there are a variety of ways in which you can do this which we’ve explained below.

In 2022 to 2023 we received 1,825 items of feedback and made 563 improvements to our manuals based on those feedback items, so it really does make a difference.

Let us know if a page was helpful

You can quickly and easily let us know if the content of a page was helpful by clicking either ‘Yes’ or ‘No’ to the question ‘Is this page useful?’. The question is situated below the main content of any manual page, and you can answer anonymously. Doing this helps HMRC to understand what guidance is working as intended and what needs their attention. If you answer ‘No’ you also get the option to provide your email address so you can be sent a generic survey about GOV.UK to tell us what you think.

Report anything from a typo or a broken link, to missing or incorrect information

Below the main content of the page, there is text stating, ‘Report a problem with this page’. Following that link lets you tell us what you were trying to do on the page and what issues you encountered. We monitor this anonymous feedback closely and subject matter experts make changes to the manuals to fix errors and improve clarity.

Provide feedback and get a reply if you want one

You can use the ‘contact’ link at the very bottom of any page, then the link to the ‘GOV.UK form’ to provide more detailed feedback. Detailed technical queries are directed to HMRC subject matter experts for analysis and to provide a response if you’ve asked for one and provided your contact details.

HMRC launches two calls for evidence

Following the customs measures package announced at Spring Budget 2023, HMRC is seeking views from its customers on the following matters:

Simplifying customs declarations — call for evidence

This call for evidence for simplifying customs declarations started on 29 June and will run for 10 weeks until 8 September. It aims to gather feedback from stakeholders within the border industry on two main areas:

• streamlining customs declarations
• the use of technology to support the completion of customs declarations

HMRC would like to hear from traders, customs intermediaries, technology and software providers, and representative bodies.

To get involved, email your response or enquiries to customsdeclarationsandtechnology@hmrc.gov.uk. In your response, please make sure you confirm if you are a business, individual or representative body. In the case of representative bodies, please provide details of the businesses you represent.

Temporary Admission — call for evidence

The government is reviewing the rules around Temporary Admission (TA), a procedure often used by creative industries such as the arts, music, and fashion industry to temporarily import goods for shows or exhibitions. The construction, pleasure craft and horse racing and breeding sectors are also regular TA users.

HMRC are seeking insights from businesses, individuals and intermediaries who use TA, asking for their views on:

• any barriers to using TA and their impact
• what the friction points are in the current process
• how the procedure could be improved

The Temporary Admission call for evidence launched on 29 June and will run until 22 September 2023, and participants can provide feedback by emailing tacustomscallforevidence@hmrc.gov.uk.

Self-Serve Time to Pay for VAT customers

HM Revenue and Customs (HMRC) is providing a new service to help make it easier for VAT customers to pay what they owe.

Where customers are unable to pay their VAT in full, we may be able to help by setting up a Time to Pay arrangement. This is where a customer pays what they owe in affordable monthly instalments.

From 30 May, customers who meet certain eligibility criteria have been able to set up a Time to Pay for VAT online, without needing to call HMRC.

Eligibility criteria:

• be a VAT customer

• have VAT debt which is less than 28 days old from the payment due date
• have VAT debt which is less than £20k in value
• not have any other debts or TTP payment plans
• be up to date with all tax returns
• be authorised to set up a direct debit mandate

Serving customers through our digital channels reduces calls to our helpline, helping us to support more customers who need our help.

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.

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.

Please be aware that 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 adviser.

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

Agent Dedicated Line

The Agent Dedicated Line (ADL) continues to remain open for agents who need advice relating to Self Assessment. The seasonal closure of the Self Assessment helpline does not apply to the ADL. The Self Assessment helpline is temporarily closed and will reopen on 4 September 2023.

Post handling

This was discussed at the Representative Bodies Steering Group (RBSG) meeting on 7 June where Professional Bodies requested more information on Post Handling, and how they could assist. A more detailed discussion is planned to take place at the next RBSG meeting in August.

VAT registrations

A bespoke meeting on VAT Registrations was held on 24 May with Issue Overview Group (IOG) members. During that meeting we acknowledged the delays and issues with VAT Registrations and confirmed additional resource has been allocated to work on processing registrations. As a result of the extra resource, we have put in place, we are seeing a reduction in cases being delayed. The majority of new cases are being dealt with within the service level agreement of 40 days, and the existing backlogs are reducing. We are continuing to make improvements in the registration process and will include IOG members in this.

Marriage Allowance

We have identified the cause of a few scenarios where Marriage Allowance claims are made, but not fully processed. We are continuing to work on potential solutions to prevent these occurrences, we envisage this may take some time to resolve.

Digital signatures

HMRC has issued guidance for taxpayers ‘Keeping your pay and tax record’. Records can be kept in a variety of formats: on paper, digitally or as part of a software program. However, there are some records that, by law, must be kept and preserved in their original form. For example, a C79 import VAT certificate (Record keeping for VAT notice 700/21).

The Taxes Management Act 1970 s12B and the Finance Act 1998 Sch 18, para 22 provide further detailed information on record keeping including those records that must be preserved in their original form. Regarding electronic signatures, HMRC has issued guidance (Agent Update 82, Feb 2021) confirming that we will accept digital or electronic signatures on 64-8s, P87 and Marriage Allowance claims. For these forms signatures signed on the screen of a digital device or displayed in a keyboard-typed font will be accepted. All other claims and paper tax returns require a handwritten signature rather than an electronic one.

Subject to exceptions, HMRC accepts digital records including scanned copies of documents with handwritten signatures. Exceptions include those set out in tax or other legislation and instances where the taxpayer is submitting a paper version of a tax return or claim.

Contact information for professional and representative bodies

• AAT: wt@aat.org.uk
• ACCA Jason Piper: jason.piper@accaglobal.com
• AIA David Potts: workingtogether@aiaworldwide.com
• ATT: atttechnical@att.org.uk
• CIMA: prof.standards@cimaglobal.com
• CIOT Technical: technical@ciot.org.uk
• CIPP Lora Murphy: Lora.Murphy@cipp.org.uk
• CPAA Alison Hale: ahale@cpaa.co.uk
• IAB: Compliance@iab.org.uk
• ICAEW Caroline Miskin: Caroline.miskin@icaew.com
• ICAS Tax Team: tax@icas.com
• ICB Jacquie Mount: jacquie.mount@bookkeepers.org.uk
• ICPA Tony Margaritelli: admin@icpa.org.uk
• IFA John Edwards: JohnE@ifa.org.uk
• VATPG Ruth Corkin: Ruth.corkin@hhlp.co.uk

If you’re not a member of a professional body, contact the Agent Engagement Mailbox: team.agentengagement@hmrc.gov.uk.