Guidance

Issue 99 of Agent Update

Published 17 August 2022

© Crown copyright 2022

This publication is licensed under the terms of the Open Government Licence v3.0 except where otherwise stated. To view this licence, visit nationalarchives.gov.uk/doc/open-government-licence/version/3 or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: psi@nationalarchives.gov.uk.

Where we have identified any third party copyright information you will need to obtain permission from the copyright holders concerned.

This publication is available at https://www.gov.uk/government/publications/agent-update-issue-99/issue-99-of-agent-update

This month’s content

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 on UK implementation of global tax reform

In October 2021, 137 countries in the ‘Organisation for Economic Co-operation and Development (OECD) Inclusive Framework’ reached agreement on a two-pillar solution to reform the international tax framework in response to the tax challenges arising from the globalisation and digitalisation of the economy:

  • pillar 1 reforms international tax rules to ensure a greater share of multinational profit is taxed in the countries in which customers are located, regardless of whether firms have a physical presence there
  • pillar 2 introduces a global minimum corporate tax rate, putting a floor on competition over corporate income tax and helping countries to protect their tax bases. It will ensure large multinationals pay tax of at least 15% on profits in each country in which they operate

Pillar 1

On 11 July 2022, the OECD published a progress report on Amount A of Pillar 1.

The progress report provides the latest draft of the model rules and sets out a revised timeline for Amount A.

Businesses are invited to provide feedback on the draft model rules by 19 August 2022. The inclusive framework will then seek to stabilise the design of the rules by October 2022, with the aim of a signing ceremony for the Multilateral Convention taking place in the first half of 2023 and Pillar 1 entering into force in 2024.

UK implementation will need to comply with the international agreement that is ultimately reached. We will start detailed preparations for the administration of Pillar 1 once the model rules are finalised.

Pillar 2

The government has listened to concerns raised from businesses during consultation on Pillar 2 and in particular on the need for sufficient lead-time before implementation.

In June it confirmed that the measure will have effect for large multinational enterprises with fiscal years beginning on or after 31 December 2023, rather than having effect from Spring 2023. It is also ensuring that businesses are kept updated on progress, including by publishing a summary of responses to the consultation and draft legislation for Pillar 2 on 20 July 2022.

In line with the tax policy making process, HMRC will continue to consult stakeholders on technical aspects of the draft legislation in August and September.

Comments are welcomed on the draft legislation until 14 September 2022. We will also continue to work with international partners to find solutions to areas of uncertainty raised in the consultation as well as progress other aspects of the implementation framework at the OECD.

The government intends to include the final legislation on the multinational top up tax in Finance Bill 2022-23.

Tax avoidance — don’t get caught out

HMRC’s ‘Tax avoidance - don’t get caught out’ campaign helps contractors to spot the signs of tax avoidance, understand the financial risks and check their pay arrangements to prevent an unexpected tax bill.

A ‘contractor’ is someone who provides services to clients that do not directly engage them. This may be through an ‘umbrella company’, an agency, a partnership, or their own company, such as a Personal Service Company. This applies to employed and self-employed individuals.

To support your clients, we ask that you keep sharing the campaign messages and signpost them to:

We appreciate your support and want to work with you to prevent your clients from getting caught out by tax avoidance.

Banks not accepting payable orders

If your client is due a Corporation Tax repayment, check in advance that their bank accepts payable orders.

The quickest and easiest way to receive a repayment is by BACS, which makes a payment directly into the chosen bank account. To do this, the BACS details should be included on the CT600 Company tax return.

More information on how to file your accounts and Company tax return is available on GOV.UK.

We are seeing an increase in requests to cancel payable orders because banks are not accepting them, so check and set up BACS where possible.

Correction to Article Published in Agent Update 96 (June) — First Full Payment Submission for new starters: the importance of using the correct employee addresses

This article was originally published with incorrect guidance around what to do when receiving a late P45. The correct guidance is below.

When completing the first Full Payment Submission for new starters, it is important that you obtain and enter your employee’s correct address and post code and use the employee’s P45 information to record their previous pay, tax and student loan (if applicable).

If the employee does not have a P45 you can use the following starter checklist for PAYE.

If you use the starter checklist to add the employee onto your payroll records and you receive the P45 after you have received a Tax Code from HMRC, you do not need to update the previous pay, tax, or tax code on your payroll software, only update student loan details (if applicable).

Using the correct post code and address is important because HMRC uses the post code to verify the employee’s address. If you enter an incorrect address or post code this could result in the employee’s address being changed on our systems leading to correspondence being issued to the wrong address.

An incorrect address held on HMRC’s systems may also affect the Department for Work and Pensions ability to process Universal Credit claims and issue correspondence to claimants.

For further information visit Tell HMRC about new employee.

New approach to VAT compliance for Overseas based Traders using online marketplaces

From September 2022, HMRC will change the way we carry out VAT assessments.

We’ll start sending assessments instead of asking for information from traders, in cases where information we hold indicates that VAT returns are inaccurate. We’re doing this because we believe we have the right information to do so without needing traders to send us this information.

These will be sent to the trader’s registered UK address, which may be their agent’s address.

These assessments will:

  • cover VAT returns for periods up until December 2020
  • be subject to statutory review and appeals rights

The assessment letters will tell traders what to do if they:

  • think that the information we hold is wrong
  • want to provide more information

If a trader struggles to pay an assessment, we’ll work with them to arrange more time to pay. If they do not pay their assessment or arrange a time-to-pay agreement, we’ll issue a Joint and Several liability notice to the hosts of the online platform they trade from.

The marketplace will then decide what it thinks is necessary to protect itself from being pursued by us for the trader’s VAT debts. This may include withdrawing permission for them to sell on its website.

If this happens, the trader will not be able to trade on the marketplace until HMRC withdraw the notice.

It can then take up to 6 weeks for hosts to allow a trader to use their platform again.

We want to encourage traders and their agents to correct returns before they receive an assessment, to avoid any penalties.

VAT rules, for overseas sellers who operate on online marketplaces, changed on 1 January 2021. For more information about this change, go to GOV.UK.

Further guidance is available

How to correct VAT errors and make adjustments

VAT and overseas goods sold to traders in the UK using online marketplaces

Capital Gains Tax on UK Property Account

Capital Gains Tax (CGT) on UK Property Account guidance

The guidance in the Capital Gains Manual for the CGT on UK Property Account has been amended to make it easier for customers to follow.

The previous manual page has been archived.

Interactions between making a Capital Gains Tax (CGT) on UK Property return and Self Assessment (SA) return

When a customer makes an SA return and realises that they should have submitted a CGT on UK Property return during the tax year (30/60 days from the date of completion), they should submit a CGT on UK property return before completing the SA return.

If the customer has already submitted an SA return, they cannot use the digital service to report the gain and must do so by completing a paper CGT on UK Property return. To request a paper CGT on UK Property return the customer will need to contact HMRC.

Further information on both the above topics, is available in the CG-APP18 Capital Gains Tax (CGT) on UK Property Account guidance.

Making Tax Digital

Agent Services Account (ASA) — granular permissions to be tested soon

HMRC are developing granular permissions in the ASA, that will allow agents to control who in their agency can accesses client records, with the option to opt in or out of using it. It is specifically aimed at supporting small to medium sized agents with up to 1,000 clients (not 1,000 employees, as incorrectly stated in Agent Update 98).

This new tool will be released to a small number of agents for testing first.

If you’re not part of the testing, you can still get ready for when it’s available to all agents. To prepare, you’ll need to have an administrator role in your ASA. Only administrators will have access to this new feature from the ‘Manage Account’ section on the ASA home page once you’ve logged in.

Administrators will then be able to create access groups and add selected clients and team members to them. Clients can be searched and filtered by their name, their tax reference, and their tax service to make it easier for you to manage their tax affairs.

Changes to the Agent Services Account (ASA) content — removing Making Tax Digital

The Agent Service Account allows all agents to access HMRC services to transact on behalf of their clients.

From April 2022, all VAT registered customers were mandated to sign up to Making Tax Digital (MTD) and use MTD-compatible software to keep their VAT records and file their VAT returns, with some exceptions. That’s why you’ll no longer see references to the MTD VAT service from the content in the ASA, as all our customers should now be using this service for VAT (unless exempt).

Making Tax Digital for Income Tax — expanding the customer pilot

From April 2024, all businesses with combined annual income from self-employment or property above £10,000 will have to submit their tax return in a different way, as part of Making Tax Digital for Income Tax Self Assessment.

We want to make sure this is well tested before its introduction, and that agents and customers have opportunities to feedback on how it will work in practice. That’s why we’re running a pilot, inviting agents to recommend clients who can help us test and learn.

Thank you if you have already started the process of signing up your clients, and if you have not, there’s still time.

What the benefits of taking part in the pilot are

The pilot is a test environment, so those taking part have the benefit of testing Making Tax Digital for Income Tax Self Assessment before April 2024, including their own internal processes for managing this change. Customers in the pilot so far have already completed their first quarterly submission successfully.

How to take part in the pilot

To sign up, customers should speak to their software provider or you as their agent to advise on next steps. You can also send an email to HMRC directly if you are interested in signing up your clients to the pilot and would like further advice: mailboxmakingtaxdigital@hmrc.gov.uk.

Who can take part in the pilot

Currently to be eligible, customers will need to have an accounting period that aligns exactly to the tax year (6 April to 5 April) to join the 2022 to 2023 pilot, and have Making Tax Digital compatible software before signing up.

We suggest you review your clients to decide who is likely to be eligible based on the current criteria.

The pilot currently needs customers who file for:

  • self-employment (including multiple self-employments)
  • UK property
  • Gift Aid
  • Pay As You Earn income, including employment income and occupational pensions (excluding those with a coded out liability)
  • UK interest
  • UK dividends

Later this tax year, the pilot will be expanded to include the following customer types:

  • pension contributions
  • CIS
  • Student Loans
  • additional Self Assessment (SA 101)
  • foreign income from property
  • voluntary class 2 NICs
  • capital gains
  • marriage allowance

We’ll keep you updated regularly on the pilot as it progresses and expands.

Consultation response on draft notices under the Income Tax (Digital Requirements) Regulations 2021

We recently consulted with agents on draft notices made under regulations 3, 8, 12 and 16 of the Income Tax (Digital Requirements) Regulations 2021 (SI2021, No. 1076). This was to ensure agents found the information in these four sections of the regulations clearer and more helpful. The consultation closed on 28 July ― thank you if you submitted comments.

We’ll now review and consider all feedback and aim to share a response to the consultation in late September.

Making Tax Digital for VAT — make sure your clients are signed up and have the right software

All VAT-registered businesses should now be signed up to Making Tax Digital (MTD) and using MTD-compatible software to keep their VAT records and file their VAT returns.

Even if they already keep digital records, they must check they are using compatible software to file their VAT returns. There’s a full list of software compatible with Making Tax Digital for VAT, including free and low-cost options, to choose the Making Tax Digital software that’s right for your clients.

If a client has not signed up to Making Tax Digital, they need to do so before they file their next VAT return, otherwise they could receive a penalty.

You can use our step-by-step guide to sign your clients up to Making Tax Digital if you have not already.

HMRC Agent Services

The Trust Registration Service

Deadlines for registering a trust with HMRC

The deadline for registering most trusts on the Trust Registration Service (TRS) is 1 September 2022.

More information on the trusts that need to register and the trusts that are excluded can be found at Trusts and Estates: detailed information. Further detailed technical information can also be found in the Trust Registration Service Manual.

Reporting a discrepancy in Trust Registration Service data

From 1 September 2022, a Relevant Person is required to report a discrepancy in Trust Registration Service data to HMRC. A Relevant Person is an organisation working in a professional capacity that carries out due diligence checks under anti-money laundering regulations.

Discrepancy Reporting guidance has been published in TRSM70000. GOV.UK guidance will be available by 1 September 2022.

Trust Data Requests

From 1 September 2022, Trust Data Requests can be submitted to HMRC. HMRC may share information on the Trust Registration Service (TRS) in limited circumstances with some third parties following a Trust Data Request.

Trust Data Request guidance has been published in TRSM60010. GOV.UK guidance will be available by 1 September 2022.

How to report that beneficial owners of a trust may be at disproportionate risk of harm if their data is shared

HMRC will not share information on specific individuals if the release of that information would put beneficial owners at a risk of harm.

If you consider that any beneficial owner of the trust would be exposed to a disproportionate risk of fraud, kidnapping, blackmail, extortion, violence or intimidation as a result of their trust information (full name, month and year of birth, nationality, country of residence and their beneficial interest in the trust) being disclosed, let HMRC know.

Trustees should send an e-mail, putting ‘Beneficial owners at risk of harm’ in the subject line to:

trs.riskofharm@hmrc.gov.uk

Only information reporting a Risk of Harm is accepted to this mailbox which is sent at owner’s risk and HMRC will not be liable for any interception of that information.

Technical guidance can be found at TRSM60040.

GOV.UK guidance will be available at the beginning of August.

HMRC will only assess the information you provide to determine whether the exemption applies if a Trust Data Request about your trust is received. Sending an email does not guarantee that HMRC will agree that the exemption applies.

All Too Familiar: an anti-money laundering film for staff training

HMRC recently shared a link with businesses registered with HMRC for anti-money laundering supervision, to a training film ‘All Too Familiar’. This is a high-quality training film created by ICAEW in collaboration with HMRC.

The film and related learning materials are only available to the Institute of Chartered Accountants in England and Wales (ICAEW) members and businesses registered with HMRC.

The film explores the degree of trust placed in personal and professional relationships and whether enough scepticism is being used in the fight against economic crime. Used for training, the film can help your staff understand:

  • their due diligence obligations
  • how to identify red flags
  • when to report suspicious activity.

If you’re registered with HMRC for anti-money laundering supervision and you did not receive the training material, you should check the email address registered with us on your online account. To get access to the film and training material, email ecspromote@hmrc.gov.uk with your registration number.

If you’d like to share the materials with international colleagues, contact the ICAEW to discuss purchasing a licence.

You can find guidance on GOV.UK about anti money laundering.

Help your import customers move to Customs Declaration Service

The Customs Declaration Service is becoming the UK’s single customs platform and will replace the old Customs of Handling Import and Export Freight (CHIEF) system.

HMRC would like your help in making sure your import customers move to the Customs Declaration Service now. If they do not, they will be unable to import goods into the UK from 1 October 2022.

Contact your import customers

We would like you to make contact with your customers now, because they need to take the following urgent action:

  • subscribe to the Customs Declaration Service
  • choose a payment method
  • manage their standing authority
  • give you customs clearance instructions

To do so, they can follow the steps in our trader checklist. It takes several weeks to move across, so your customers should subscribe today.

You should make sure your customers give you access to their Customs Declaration Service account and give you any additional information you need in order to make declarations on their behalf.

Customs agents register

We have a customs agents register on GOV.UK. Email customsagentstrainingproviders@hmrc.gov.uk if you would like to be added. This will help businesses looking for someone to make their declarations, find you.

‌‌‌### Find help and support information online

‌‌‌You can learn more about the Customs Declaration Service on GOV.UK or watch our new series of short ‘how to’ videos on HMRC’s YouTube channel.

‌‌‌And our Trader Dress Rehearsal service can help you practise using the Customs Declaration Service in a secure test environment using real information without risk.

Annual Investment Allowance and loans to participators — update

On the service issues page we advised that we were unable to accept returns featuring Annual Investment Allowance claims over £200,000. This also applied to loans to participators claims under Section 455, with the new rate of tax of 33.75%.

The Corporation Tax Service will be updated to allow us to accept these returns from 16 September 2022.

Change in the CT600 supplementary page CT600L from 1 April 2022 — further update

In Agent Update 95 we told you about known issues with the CT600L that affects two types of claims:

  • companies claiming SME Research and Development Enhanced Expenditure but not SME Payable Tax Credit or Research and Development Expenditure Credit

  • companies claiming Research and Development Expenditure Credit and reporting Income Tax deducted from profits

Both of these issues will be sorted from 16 September 2022.

Where there are any issues we will continue to update the service issues page.

We will accept paper returns where there is an urgent need to file returns with these claims. For information on how to do to this, see the service issues page.

GOV.UK ID Check ― a new way for some customers to prove their identity

From this month, some customers will be offered an alternative way to prove their identity to access HMRC’s online services.

Customers using an iPhone may be offered the choice to use GOV.UK ID check when setting up their HMRC login through Government Gateway. GOV.UK ID Check allows customers to use the camera on their phone to confirm a match with their driving licence.

Over the next few months, we’ll make this option available to more customers on other devices, and they’ll be able to use other ID documents including a UK passport.

Government Digital Service (GDS) has developed the app and HMRC is the first department to adopt it. GDS and HMRC will be working together closely on the rollout.

Customers who have HMRC sign in details and are already using our online services are unaffected.

You should never ask for or use your client’s HMRC sign in details to access their tax account.

PAYE for agents online service

All agents who are enrolled can now opt in to see liability and payment data.

The PAYE for agents online service means agents can view their client’s liability and payment data held by HMRC, and we’ve been expanding the scope of eligible agents over time. Now, all agents who are enrolled for Employers PAYE online for agents (both administrators and assistants) can opt in.

In line with the latest accessibility legislation, we’ll be making some changes to the online screens and expect these to be completed by mid-September.

Share your views on the HMRC repayment agents consultation

We recently launched a consultation called Raising standards in tax advice: Protecting customers claiming tax repayments, which will run until 14 September.

We are seeking views on how we can better protect taxpayers from repayment agents who make routine tax claims on people’s behalf, but can take up to half, or even more, of the payment.

Share your views on whether HMRC should:

  • restrict the use of assignments
  • introduce measures designed to ensure taxpayers see material information about a repayment agent’s service before entering into a contractual agreement
  • require repayment agents to formally register with HMRC

We are keen to hear views from all tax agents, particularly those specialising in helping taxpayers claim repayments.

Our video explains how you can share your views by emailing repaymentsconsultation@hmrc.gov.uk.

Individuals can also complete the survey on GOV.UK.

Agent Talking Points

All agents will be aware of our popular Agent Talking Points webinars, for which most agents receive regular Monday morning updates.

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.

Be aware that our toolkits are currently being updated.

This month there are new updates in Capital Allowance Toolkits.

Here is the breakdown of toolkits by category:

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

Agent Online Forum

The Agent Online Forum continues to provide a service for agents to post and view queries, provide evidence, suggest solutions, and access updates on potential systemic issues impacting the operation of the tax system.

The number and range of posts on potential widespread issues is increasing and the Agent Online Forum Team continue to seek to provide timely responses.

Agents should submit single issue posts and queries which will be acknowledged, and a response requested from the relevant colleagues.

Once a response is published, the post will remain open for five days and then locked. Any posts with feedback, opinion, and comments, will be acknowledged and locked.

Additional queries submitted on the topic must also be succinct and limited to a single question in each post.

Posts must be concise, evidence based, avoid unnecessary comment, and only refer to a single issue, with a question pertaining to that issue.

Those posts which are significant can be responded to, others will be made available as insight to HMRC Subject Matter Experts responsible for development of the service.

Customer Insight will review the content of some posts to help with the future development of the service.

To ensure the effective operation of the Agent Online Forum service benefits the maximum number of agents it is important to manage posts that consume dis-proportionate resources.

Postings that regularly exceeds the 250 word limit and includes multiple questions with unnecessary detail will result in Agent Online Forum access being suspended.

Agents are reminded that the Agent Online Forum is a service to assist in the identification and resolution of potential system issues impacting the tax system.

Agents should pursue issues which appear to be specific to their firm through the other channels available to them. If these channels have been exhausted they may avail of the Agent Account Manager Service or if it relates to poor service, they can raise this with HMRC using the HMRC process for formal complaints.

Issues Overview Group Update

SA Pre-population issues

Professional Body members of the Issues Overview Group have raised concerns about SA pre-population data with HMRC Board members.

Investigations are continuing on the examples provided by Agents, with HMRC focusing on the flow of data in certain circumstances, as the Application Programming Interface is working well.

Contact information for professional and representative bodies

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

Back to top