HMRC have issued the Agent Update for February/March 2019. We have summarised the key content for you with links to our detailed guidance on the topics covered.
As HMRC's Agent update has duplicated or provided different versions of employer guidance in its February's Employer Update we are excluding these from this summary and have provided full details in our Employers' What's On Feb/March 2019.
Preparing businesses for EU exit
HMRC have published their latest letter to UK businesses that trade only with the EU with details of important actions they need to take and changes to be aware if the UK leaves the EU with no deal. The letter asks businesses to take a number of actions to prepare for no deal including:
- Registering for an Economic Operator Registration and Identification (EORI) number on GOV.UK.
- Deciding if they want to hire customs agents to make import and/or export declarations for them, or if they want to make declarations themselves using relevant software.
- Registering for Transitional Simplified Procedures (TSP), which is a new process to make importing easier than it otherwise would be for the initial period after the UK leaves the EU.
All of this information and more can be found on GOV.UK, including a ‘Prepare your business for the UK leaving the EU’ tool and step by step videos.
See Brexit: how will it affect us?
Issuing Self-Assessment penalty notices; timings for this year
HMRC have advised that, due to Brexit and in anticipation of increased demand at their call centres:
- They may not be able to issue £100 penalty notices for the late filing of 2017/18 self-assessment returns during the usual time frame of February as staff will need to be freed up for EU exit related work.
- The latest date that the notices will go out is the end of April, but they will go out sooner if the Withdrawal Agreement is agreed.
- Daily penalties for returns filed more than three months late are expected to be issued as normal.
- See Advisers Tax penalty planner
Training and support for customs intermediaries
In 2018 HMRC announced an £8 million investment to support the customs intermediaries sector to expand ahead of the UK exiting the EU. There is still grant funding available to support training for businesses offering intermediary services, traders looking to complete their own declarations, and to support automation for smaller intermediaries relying on manual data input.
See the ‘Apply for grants if your business completes customs declarations’ webpage on GOV.UK.
Profit Diversion Compliance Facility
HMRC launched the Profit Diversion Compliance Facility on 10 January 2019.
- The facility allows multinational enterprises to submit a detailed report covering any arrangements targeted by the Diverted Profits Tax (DPT).
- The disclosure must come with a proposal to pay all additional tax due plus interest and, where applicable, penalties.
- HMRC will consider the reports and decide whether to accept the proposals or investigate.
- See Diverted Profits Tax
Machine Games Duty and Gaming Machines
Machine Games Duty (MGD) is an excise duty charged on games played on a gaming machine, whether of chance or skill, in the UK, where the prize exceeds the cost to play.
Clients responsible for premises where machine games are offered for play, or if they are the tenant of a pub with gaming machines must:
- Register for MGD
- Cancel their registration when circumstances change.
- Send in quarterly returns (including nil returns) and pay any MGD due within 30 days of the end of the return period,
- Keep records.
More information is available on the Pay Machine Games Duty webpage on GOV.UK.
Scottish Income Tax
The Scotland Act 2016 gave the Scottish Government the power to set Income Tax rates and thresholds for Scottish taxpayers for 2017-18 onwards.
- The draft Scottish Budget, published on 12 December 2018, confirmed that the 5 band structure and tax rates (19%, 20%, 21%, 41% and 46%) will remain the same for 2019-20.
- The thresholds for lower tax rates will rise in line with inflation and the higher rate threshold has been frozen.
- If you have any clients who live in Scotland for most of the year, they need to make sure HMRC have their correct address details on record so that they pay the correct amount of Income Tax. It is important that your clients’ address details are up to date.
- See Scottish Income Tax rates
Welsh rates of Income Tax
From 6 April 2019 all people living in Wales and who pay Income Tax will pay Welsh rates of Income Tax.
- PAYE individuals resident in Wales will receive a new tax code with a suffix ‘C’, including individuals whose income is below the tax threshold.
- Self-employed individuals who file an online tax return will be asked to note their country of residence when filing their 2019-20 tax returns.
- It is important that your clients inform HMRC when they change address.
- See Welsh Income Tax
Updating Trust Registration Service (TRS)
HMRC is implementing the TRS in a number of phases and currently, it is not possible for lead trustees and their agents to update their registered information or to declare that there have not been any changes.
- Following user feedback, HMRC are switching to a new system (a ‘micro service’) to be rolled out at the start of the summer of 2019, which will be more intuitive, easier to navigate and have several advantages over the current ‘iForm’ service.
- In the meantime, if you need to inform HMRC that the lead trustee or trust correspondence address has changed, write to: Trusts HM Revenue and Customs BX9 1EL.
- See UK trusts
Extending Security Deposit Legislation
The government announced at Autumn Budget 2017 that it would introduce legislation in Finance Bill 2018 to extend the scope of the existing security deposits legislation to include Corporation Tax and Construction Industry Scheme deductions. This will take effect from 6 April 2019.
See Finance Act 2019: Tax update and rolling planner 2019/20
Claims for Research and Development reliefs or Creatives Tax Reliefs which form a part of an amended return
From 1 April 2019 all claims for Research and Development reliefs or Creatives Tax Reliefs which form a part of an amended return must include a completed CT600 and a Corporation Tax computation.
- Potential claims without both the completed CT600 and computations will be returned.
- If the potential claim is returned near the closing date for making that claim HMRC will still accept a similar claim if it is returned in the required form within the next 30 days.
- The period during which this ‘30 day’ facility will be available will run from 1 April 2019 to 30 June 2019.
- The changes do not affect amendments which are made electronically.
- See Creative Industries Tax Reliefs and R & D & Patent Box zone
Sending your client’s 2019-20 Annual Tax on Enveloped Dwellings (ATED) return
Be prepared to send your client’s 2019-20 Annual Tax on Enveloped Dwellings (ATED) return online by registering with HMRC to use the online service before 1 April 2019.
- You will not be able to submit a return for the 2019-20 chargeable period until after 31 March 2019 but can populate and save your return from mid-March prior to submission to HMRC.
- See Annual tax on enveloped dwellings (ATED)
Taxing non-UK resident’s gains on UK land
From April 2019, more disposals of interests in UK land by non-residents are brought into charge to UK tax.
The key changes are that from 6 April 2019:
- disposals of interests in both residential and commercial property will be within the UK’s tax base.
- persons previously able to elect out of charge (such as diversely held companies, and widely marketed funds) will now be liable on all disposals of UK land.
- there will be a new charge for non-residents’ gains on disposals of indirect interests in UK property (such as selling the shares in a company that derives 75% or more of its gross asset value from UK land).
- All companies (including close companies) will now pay Corporation Tax on their gains.
- The rules also abolish the charge to tax on Annual Tax on Enveloped dwellings (ATED) related gains.
- Guidance has been published in draft as Appendix 14 to the Capital Gains Manual, with a deadline for feedback of 28 February 2019.
- See Non-resident CGT: UK property
HMRC unannounced visits: A Reminder
HMRC Officers have reported that when conducting authorised unannounced inspection visits to businesses, some agents have advised their clients to refuse the inspection on the grounds that HMRC Officers do not make unannounced visits.
- This is incorrect and has resulted in unnecessary and lengthy discussions taking place between HMRC Officers, who are trying to explain that they are permitted to make such visits, and business owners.
- To reduce misunderstandings and unnecessary confusion, further information about HMRC unannounced visits is available on the Compliance checks: unannounced visits for inspections webpage on GOV.UK.
- See Lords question HMRC powers
Disguised Remuneration Loan Charge Reporting Requirements
If clients have used a Disguised Remuneration scheme and they do not take action to settle their scheme use with HMRC by 5 April 2019, they must account for the loan charge and tax due.
- Employers have a legal requirement to report any outstanding loans as employment income arising on 5 April 2019.
- For individuals who have outstanding loans, whether they used an employed or self-employed scheme, they must tell HMRC, between 6 April 2019 and 30 September 2019 about the amount of their outstanding loans and include the total amount of outstanding loans on their Self Assessment tax return for 2018-19 and pay any tax due by 31 January 2020.
- See Loan Charge: payment and reporting
Accelerated Payment Notices:
If any of your clients have paid an accelerated payment notice in respect of a scheme that will be affected by the loan charge, they can make an application to have this amount set against the loan charge.
See Disguised Remuneration Zone for more details.
Post-transaction Valuation Checks for Capital Gains (CG34)
- When working out your client’s Capital Gains Tax liability or, for companies, the Corporation Tax liability on chargeable gains, assets may need to be valued.
- HMRC offers a free service to help you complete your client’s Self-Assessment or Corporation Tax return. You can ask HMRC to check valuations after the disposal has been made, but before you submit the end-of-year tax return.
- HMRC are extending the time you should allow for them to check the valuation from 2 to 3 months.
- See CGT: Post transaction valuation check
Corporation Tax Claim for Terminal Loss Relief
HMRC receive a high number of queries following up claims for Terminal Loss Relief. To allow them to deal with a claim, you need to include:
- the date the company stopped trading
- information about the period when the loss is made
- the amount of the loss
- how the loss is to be used.
See Losses: trading and other losses
Removal of HMRC Fax Facility for Compliance cases
For Tax Compliance cases only the option to fax letters/documents to HMRC has been withdrawn with immediate effect. Fax numbers previously used will show as unavailable if dialled and an alternative method such as Royal Mail or, if appropriate, email should be used.
Contact & HMRC service
- HMRC working with Tax Agents Blog. This provides another channel to communicate about consultations, news and updates, and the rollout of new digital services for agents.
- HMRC twitter account Twitter@HMRCgovuk.
- Complain to HMRC: to make a complaint against HMRC on behalf of your client you must be appointed as their tax advisor.
- Email alerts for employers. Agents should encourage employers to register for email alerts to be notified about coding changes and information published on Government Web pages.
- Where’s my reply? This service provides an estimated date that HMRC will respond to queries.
- You can check the latest updates to HMRC manuals or subscribe to automatic notification of change here
- Future online downtime. HMRC provide information about planned downtime which will affect the availability of online services.
- Staying safe online. HMRC continuously monitors systems and customer records to guard against fraudulent activity, providing regular updates on scams we are aware of. If you have any concerns regarding the authenticity of any emails received from HMRC, see the online security pages for agents.
- Phishing emails and bogus contact: HMRC examples: A new type of phishing scam regarding tax refunds and rebates, which is being circulated in high volumes, has been added.
Other content
Other recent publications
- Spotlights HMRC have published a new Spotlight on tax avoidance (Spotlight 46).
- Employer Bulletin, see our expanded version Employer;s What's UP Feb/March 2019
- HMRC: Trusts and Estate newsletters
- National Insurance Services to Pensions Industry: Countdown Bulletins
- Pension scheme newsletters
- Revenue and Customs briefs
Making Tax Digital
Agent Services Account and Anti-Money Laundering Supervision (AMLS)
- In order to create an Agent Services Account you need to provide your Anti-Money Laundering Supervisors’ name, your reference number and expiry date.
- See Agent Service Account & VAT: Top tips
Making Tax Digital (MTD) for VAT service update
- The MTD for VAT service is now open to all customers who are mandated to use it for period starting on or after 1 April 2019.
- The pilot is now open to VAT groups to allow them to start testing the service.
- Agents can sign up their clients now from GOV.UK. You need to sign up each of your client’s individually.
- VAT Notice 700/22 has been updated to confirm that the soft landing period on digital links for those that are deferred has been extended by 6 months to October 2020.
- See Making VAT Digital
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