Guidance

Issue 126 of Agent Update

Published 19 December 2024

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This publication is available at https://www.gov.uk/government/publications/agent-update-issue-126/issue-126-of-agent-update

Technical updates and reminders 

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

Tax 

Borders and Trade

Making Tax Digital 

HMRC Agent Services 

Agent online forum and engagement 

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

Tax 

Check if you can delay customs payments and declarations 

We have published new guidance about registering for Corporation Tax for:

  • non UK incorporated companies

  • unincorporated associations 

Registration process for non-UK incorporated companies 

Corporation Tax for non-UK incorporated companies directs users to the registration pages available. Each registration page will tell users how to register and all the information they need to send to HMRC. 

Registration process for an unincorporated association 

Register as an unincorporated association includes an interactive tool. This helps users gather all the information needed to send to HMRC.

2025 to 2026 student and postgraduate loans thresholds and rates

The Department for Education announced the new student loan plan type and postgraduate loan thresholds and rates from 6 April 2025. These are 

  • plan 1 — £26,065
  • plan 2 — £28,470
  • plan 4 — £32,745
  • postgraduate loan — £21,000

Deductions for plan types are as follows:

  • plan 1, plan 2 and plan 4 remain at 9% for any earnings above the respective thresholds 
  • postgraduate loan remains at 6% for any earnings above the respective threshold 

Guidance on student loan and postgraduate loan repayment guidance for employers will be updated on 6 April 2025.

Simple Assessment — reminder to pay 

HMRC is urging taxpayers who have received a Simple Assessment letter to pay by the deadline of either 31 January 2025 or 3 months from their letter’s date of issue, whichever is later. 

This year we sent Simple Assessment letters to over half a million taxpayers who owe Income Tax that cannot be collected automatically for example, through Pay As Your Earn (PAYE) and who are not in Self Assessment.

There are various ways to pay, including:

  • the HMRC app
  • online
  • by bank transfer
  • by cheque

Your clients can make as many payments as they need to pay the charge in full by their due date.

More information on paying a Simple Assessment tax bill is on GOV.UK. 

Your client can also watch our videos: 

How increases to the State Pension can affect the tax you pay 

How you pay any tax due on your State Pension if it’s more than your Personal Allowance. 

You can share this information with any Simple Assessment clients you have.

Basis Period reform — reporting profits on a tax year basis

All sole traders and partners must report their business profits on a tax year basis for the tax year 2024 to 2025 onwards. Businesses remain free to choose their accounting date, and they can prepare accounts to any date in the year, but any business that has a non-tax year accounting period in 2024 to 2025 or future years will need to apportion profits from 2 accounting periods to the tax year. 

Many customers may find it easier to prepare accounts to 31 March or 5 April from 2024 onwards. This may make completing the tax return simpler as there will be no need to use 2 sets of accounts to complete each tax return. Accounting periods ending on 31 March will be treated as equivalent to those ending on 5 April for all businesses, including property businesses.

What’s new 

HMRC has now launched a tool to work out the overlap relief figure to help you calculate your overlap relief based on:

  • your records
  • information previously provided by HMRC
  • your own estimates

To help us reply to as many requests as possible in time to file the tax returns by 31 January 2025, submit requests for overlap relief early and preferably by 31 December 2024. Help us by only using the online form if you do not have a figure for overlap relief. The form is not intended to be used to check or confirm a figure that you already hold and there is no requirement to use the service before filing a return.

If you use the service but have not heard back by 31 January 2025, you should file the tax return on time with a provisional figure for overlap relief and amend it when you have further information. 

Transition year 2023 to 2024

All sole traders or partners must declare profits from the end of their basis period in 2022 to 2023 up to 31 March or 5 April 2024. In most cases businesses already accounting to 31 March or 5 April are practically unaffected. Other businesses may choose to shorten or lengthen their accounting period to 31 March or 5 April 2024 to make completing future tax returns easier. They may instead continue to have a non-tax year accounting period and apportion profits accordingly.

Individuals may need to declare more than 12 months of profits in 2023 to 2024. Any excess above 12 months is transition profit, with relief available for any unused overlap profits.

Transition profit (less overlap relief) is spread by default over the 5 tax years between 2023 to 2024 and 2027 to 2028 but can be accelerated by election. If the business ceases, any untaxed transition profit is accelerated in the year of cessation. Agents and customers can access online interactive guidance to work out the transition profit and determine the entries required on the self-employment or Partnership pages of the 2023 to 2024 individual tax return.

Further guidance and support for Basis Period Reform is available on GOV.UK.

Agent control of client online tax accounts — a reminder 

HMRC recognises the valuable role agents play in supporting their clients to engage with the tax system. However, we’d like to remind you that there are no circumstances in which it is acceptable for an agent to directly control a client’s online tax account, or register said account to their own email address.

The HMRC standard for agents also explicitly states that agents must never ask any client to share their Government Gateway user ID and password.

Such behaviour is rare, but where identified, HMRC will act swiftly to safeguard customer data, including suspending accounts and deleting Government Gateway credentials. HMRC reserves the right to take further action where repeated breaches occur as detailed in the HMRC standard for agents.

Company Tax Return requirements for quarterly instalment payers of Corporation Tax and those eligible for Marginal Relief

The Small Profits Rate of Corporation Tax and Marginal Relief were introduced with effect from 1 April 2023. At the same time, the related 51% group companies test (that applied to quarterly instalment payers, patent box and others) was replaced by the associated companies rules.

HMRC updated the CT600 Company Tax Return guide in respect of boxes 326, 327, 328, 625, 630 and 631 on 10 September 2024. This update clarified the correct box to be completed, for the application of the related 51% group companies test for quarterly instalment payers. We understand this has caused some confusion as some companies have been asked to resubmit their return.

If a company’s accounting period straddles 1 April 2023 (for example, 1 January 2023 to 31 December 2023), quarterly instalment payers will still apply the related 51% group company test across the whole period. Unfortunately, this figure cannot be entered into box 625 as a cut-off date was required to ensure companies are completing the correct box from 1 April 2023 for the associated companies rules.

Companies should instead use box 326 to report the number of 51% group companies only for accounting periods that straddle 1 April 2023. This ensures that, despite the limitations that exist in the flexibility of the use of the CT600 boxes, returns are as closely aligned as possible to the legislation and will be accepted upon submission.

HMRC will not require companies to submit amendments to Company Tax Returns submitted prior to 10 September 2024 to reflect the amended guidance. 

Returns submitted from 10 September 2024 should follow the current published CT600 guidance. You will only need to submit an amended return if there is a change to something other than the number of associated or group companies on your return.

Extended period for issuing tax calculation (P800) letters 

Due to higher-than-expected volumes, some customers may have to wait until the new year to receive their P800s. This includes some PAYE customers who think they may have additional tax to pay on savings for the year ending 5 April 2024. 

This is slightly longer than in previous years where HMRC have aimed to complete most end-of-year PAYE reconciliations by the end of November. The process will be complete by the end of March 2025 and PAYE customers are asked not to chase until after that point. GOV.UK guidance is being updated to this effect.

Information on how to contact HMRC regarding Income Tax enquiries can be found on GOV.UK.

Borders and Trade

Safety and Security declarations — new requirements from 31 January 2025

From 31 January 2025, all European Union (EU) imports into Great Britain (GB) will require Safety and Security declarations.

We have published a short video on YouTube to support readiness activity:

Safety and Security declarations - new requirements from 31 January

We will continue to publish further information on the safety and security requirements on imports and exports GOV.UK page in the coming weeks.

Making Tax Digital

Get ready for Making Tax Digital for Income Tax with our agent toolkit

To help you and your clients prepare for Making Tax Digital (MTD) for Income Tax, we have published a new MTD toolkit for agents. This includes:

  • an overview of what is changing, who is affected and how to prepare
  • links to MTD for Income Tax guidance
  • frequently asked questions and answers
  • communication resources such as an agent checklist, videos and printable posters

An accessible version of the agent toolkit is available for anyone who needs to use assistive technology.

The first phase of MTD for Income Tax will be introduced in 2026. From 6 April 2026, sole traders and landlords with gross income (before expenses and tax are deducted) from self-employment and property over £50,000 will need to keep digital records and send quarterly updates to HMRC, using compatible software. Those with a gross income from these sources over £30,000 will need to do this from 6 April 2027.

Sole traders and landlords with gross income from self-employment and property over £20,000 will need to use MTD for Income Tax in the future. The timeline for this will be set out by the government in due course.

HMRC agent services

Self Assessment deadline is not far off

31 January is not far away and we know many of you are trying to get your clients’ information ready to submit their tax return. 

Filing now has many benefits. It avoids last minute stress, reduces the risk of errors, and gives you enough time to make corrections if needed.

Our free online services make it quicker and easier to do Self Assessment. 

Agents can use 6 online resources:

To help tax agents get their clients’ tax returns right and smooth the process, we’ve produced top tips for Self Assessment on mynewsdesk.com.

The best way to pay voluntary National Insurance contributions

Your clients have until 5 April 2025 to fill gaps in their National Insurance records dating back to 6 April 2006. After this deadline, they’ll only be able to make payments for the previous 6 tax years.

We recommend using the ‘pay by bank account’ option online. This method is fast, secure, and helps prevent errors that could lead to delays. Payments made this way will typically be reflected in your clients National Insurance record within 5 working days.

Your clients should be encouraged to: 

  • check their National Insurance record using the HMRC app or online service 
  • calculate whether making a payment could increase their State Pension 
  • use the ‘pay by bank account’ option for quick and reliable payment processing

Share this information with your clients and remind them of the 5 April 2025 deadline. Acting now will help your clients get what they’re entitled to. 

More information on voluntary National Insurance contributions is available on GOV.UK.

VAT Registration Service and adding repayment bank account details using a Business Tax Account

VAT Registration Service and registering for VAT by post

We remind agents and their clients that applications for VAT registration should be made using the online VAT Registration Service and not by any other electronic means, including email. Using the VAT Registration Service is the quickest, most secure and easiest way to register for VAT.

Agents should continue to use the VAT Registration Service through the agent services account and to avoid unnecessary delays, ensure they have client details ready and input them correctly. We ask agent communities to support HMRC’s move to digital by reminding and encouraging businesses to use our online services.

Paper form VAT 1 should only be used as outlined in our guidance, including for customers who are unable to use our digital service.

For customers that are unable to access and use our digital channels, HMRC will always provide a service to meet their needs.

Learn more about how to:

Adding repayment bank account details through a business tax account 

HMRC are committed to ensuring the safety and security of our customers banking information. We encourage customer use of the business tax account to update their VAT repayment bank account details and ask agent communities to promote these digital options to your clients.

Making the change online ensures the customer receipt of payment, through Bacs, directly into their account, reducing the processing time and adding additional security the repayment.

Paper form VAT484 to change VAT registration details should only be used as outlined in the guidance. Any requests on a form VAT484 that do not meet the criteria will be rejected and customers will be directed to make updates using the VAT online account through their business tax account.

Help test HMRC’s pay calculator for umbrella company workers 

Help test a new HMRC calculator that estimates take-home pay for umbrella company workers. The tool can also help employment businesses understand the pay of umbrella company workers they supply.

This calculator will help workers to:

  • estimate take-home pay using payslip information 
  • check common deductions including Income Tax, National Insurance contributions and pension contributions 
  • identify potential incorrect deductions 
  • understand assignment rates, gross pay and net pay 

Your feedback will help improve the service before its full launch.

Use the umbrella company pay calculator and share it with your clients who use umbrella companies.

Authorising a tax agent — helpful hints and tips for completing form 64-8

We’d like to share with you some hints and tips for completing form 64-8. 

To help us process your quickly and avoid any unnecessary delays you should: 

  • check what a paid agent can do on your behalf and download the latest version of form 64-8
  • not include a covering letter, unless it contains information that is absolutely necessary to process the form — add any essential information to your covering letter, do not write outside the boxes on the form 
  • make sure the form is typed, or the handwriting is easy to read 
  • not provide any additional information in the form fields other than the requested information — for example, in the ‘agent code’ field, only include the correct Self Assessment agent code, consisting of 6 characters in the format 1111XX 
  • not strikethrough any unused boxes or make any marks in the margin of the form 
  • provide the correct agent codes for the relevant tax regimes (for example, PAYE XX1111) 

If you follow these steps, our automated service will be able to process form 64-8 quickly and effectively, enabling a smoother customer journey.

The Administrative Burden Advisory Board (ABAB) annual report 2024

ABAB published their annual report 2024 on GOV.UK on 16 December 2024.

The Annual Report details ABAB’s progress against the priority areas identified in the previous report, which included:

  • Making Tax Digital for business
  • tax simplification
  • customer experience
  • Basis Period Reform
  • the Tell ABAB Survey

The Report also shares ABAB’s priorities for the forthcoming year.

This year’s report is structured around the 3 priority areas the Exchequer Secretary for the Treasury set HMRC to report against:

  • modernising and reforming HMRC 
  • improving day-to-day performance 
  • closing the tax gap

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.

We encourage you to share the report with colleagues. If you would like to comment on the report, or help ABAB with their work, contact us by email: adminburdenadvisoryboard@hmrc.gov.uk.

Open consultation on simplifying the taxation of offshore interest 

The government is seeking views on how the taxation of offshore investment income can be simplified to help reduce administrative burdens for taxpayers and improve the efficiency and focus of HMRC’s compliance work. A consultation document on simplifying the taxation of offshore interest was published on 30 October 2024 and runs until 22 January 2025.

Currently, individuals are taxed on investment income, including interest, arising in a tax year. Where the investment income is from a non-UK investment the individual will often receive details on a calendar year basis. HMRC also receives details on a calendar year basis under international exchange of information agreements. The mismatch between the UK tax year and the calendar year reporting causes issues for both HMRC and taxpayers. Some of these are set out in the consultation.

The consultation asks for thoughts on the issues the timing mismatch causes and asks how you might mitigate these issues. It also asks opinions on scope. The initial intention would be to concentrate on resolving issues specifically on offshore interest, but it asks if it would be better to deal with all non-UK investment income in the same way.

The consultation sets out one possible solution, to align the taxation of offshore interest with the calendar year. It sets out some of the advantages of making this change along with some of the issues that would have to be considered as part of any change. It then asks for your views on whether this idea has merit.

The number of taxpayers affected by the issues set out in the consultation is likely to increase with the reform to the treatment of non-domiciles (non-dom reform) in the UK tax system and removal of the remittance basis. These changes are likely to increase the number of taxpayers required to report non-UK investment income to HMRC using Self Assessment.

HMRC would like to hear from:

  • taxpayers
  • agents
  • representative bodies
  • professional bodies
  • businesses
  • education institutions
  • other interested parties

If you want to respond or enquire about this consultation, contact us by email: consult.nosafehavens@hmrc.gov.uk.

Feedback to this consultation will inform future work on proposals to simplify the taxation of offshore interest and investment income. 

All responses will be reviewed, and HMRC plans on publishing a response document. Subject to comments received, HMRC may carry out formal consultation on measures that are identified and subsequently begin development of new legislation to implement proposals.

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.

Contact 

Complain to HMRC

You can complain to HMRC. 

To make a complaint to HMRC on behalf of your client, you must be appointed as their tax adviser.

Check when you can expect a reply from HMRC 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 option.

Online 

You can find online training material and useful resources through the HMRC email updates and webinars for tax agents and advisers page.

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.

Agent forum and engagement

Updates on issues raised on the agent forum that are being progressed in the Issues Overview Group.

Issues Overview Group updates and discussions on the items raised on the agent online forum 

SA 52117 SA1 Address Rejections

HMRC is aware that several registration form SA1s are being incorrectly rejected, despite the address provided fully matching data on HMRC systems. The cause of this is being investigated. Agents are advised to allow extra time when submitting form SA1.

SA 46134 Missing 2024 to 2025 PAYE code numbers

Professional bodies and agents continue to report missing PAYE codes for 2024 to 2025. HMRC is working to establish the number of taxpayers impacted. We will be asking agents to provide further examples after 31 January 2025.

SA 11680 Including client references in HMRC emails

HMRC’s IT partners are considering digital solutions for the inclusion of agent and client reference when registering customers for Self Assessment and submitting Self Assessment returns. Subject to final costings and prioritisation conversations, we will implement this by April 2025.

Auto coding

An overview of the auto coding process was provided to Issues Overview Group members, who then had an opportunity to ask questions and provide feedback. HMRC welcomes the support of professional bodies in helping to improve agents’ understanding of the process, reduce enquiries, and enable them to better support their clients.

Income Record Viewer

Several queries were raised in seeking to reconcile information that can be viewed on the Income Record Viewer. To help address some of these, a meeting has been arranged between Issues Overview Group members and Income Record Viewer subject matter experts, to better understand how the information is collated.

Issues Overview Group escalated issues

High priority issues that are escalated by members of the Issues Overview Group are moved to the Issues Overview Group escalated issues board for management. When updates on issues are obtained, threads are updated on the agent forum and will appear at the top of the list.

Where investigation or implementation of a solution looks as though it is going to take a longer period, the issue may be locked, moved to the ‘List of escalated threads’, and closed on the forum itself (although it of course remains under active investigation by HMRC).

A webinar on raising potential systemic issues on the agent forum, and the operation of the Issues Overview Group, is now available to view at HMRC email updates, videos and webinars for tax agents and advisers.

Agent Account Manager Service 

HMRC has a UK-wide team of Agent Account Managers (AAMs) to help resolve client-specific issues. They act as an intermediary between agents and HMRC where the normal communication channels have broken down. They act as a single point pre-complaints channel to help resolve any ongoing client-specific problems when the usual escalation processes within HMRC have failed. The AAMs mediate with the business area to reach a satisfactory conclusion to issues.

Before using this service, agents are advised to first contact the HMRC office they have been dealing with or to contact HMRC to try and resolve the issue. Agents should only use the AAM service if it has not been possible to resolve a client-specific issue through normal HMRC methods. The AAM service does not replace HMRC’s process for formal complaints.

Registering for the agent forum

Agents who want to register for the agent online forum on GOV.UK at HMRC Community Forums must agree to the terms and conditions for using HMRC forums.

Contact information for professional and representative bodies

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