HMRC have issued the Agent Update for April/May 2019. We have summarised the key content for you with links to our detailed guidance on the topics covered.
Some of the items included in this update were also included the April 2019 Employer bulletin, rather than duplicate these we have linked to that update accordingly where appropriate.
The update includes details about changes for UK self-employed workers working in the EU, European Economic Area (EEA) or Switzerland in a no deal situation, specifically in respect of social security contributions and what individuals need to do to prepare. See GOV.UK for more details.
Refreshed Offshore Tax Compliance Strategy
HMRC have launched “No Safe Havens 2019” which brings together their approach towards offshore tax compliance and covers a range of behaviours, from simple mistakes to avoidance, and evasion.
More information on HMRC’s strategy for offshore tax compliance can be found on GOV.UK.
HMRC’s corporate criminal offences for failing to prevent tax facilitation - what they are and what to do
- Since 30 September 2017, companies and partnerships can be criminally liable if they fail to prevent their representatives from criminally facilitating tax evasion.
- The government has published details of these offences, and have launched a dedicated self-reporting route for organisations that have failed to prevent the facilitation of tax evasion.
Annual Tax on Enveloped Dwellings (ATED)
- If your client owns a property within ATED on 1 April 2019, a return must be submitted by 30 April 2019 to avoid incurring a late filing penalty.
Tax-Free Childcare - quarterly reconfirmation process
Tax-Free Childcare is a government scheme that helps working parents, including the self-employed and company employees, with their childcare costs, providing up to £2,000 per child, per year to spend on qualifying childcare.
- To continue to get Tax-Free Childcare, parents must check and reconfirm their details with HMRC every three months.
- HMRC will send a reminder but it is the parent’s responsibility to reconfirm on time in their childcare account(s).
Apprenticeship levy funds transfer limit to increase in April 2019
From April 2019, the amount of funds that levy-paying employers can transfer to other employers to support apprenticeships will increase from 10% to 25%, subject to the rules on transfer.
Help your clients protect their State Pension
Making a claim to Child Benefit can help protect entitlement to the State Pension.
- Until the child is 12 years old a Child Benefit award provides NIC Credits to the person who made the claim which can help protect entitlement to the State Pension.
- For couples with one partner not working or paying NIC, making the claim in their name will help protect their State Pension.
- Even where the working partner claims Child Benefit, there is scope to transfer the NIC credits and change who gets Child Benefit to protect the non-working parents State Pension.
- Individuals with income over £50,000 who would suffer the Higher Income Child benefit charge may claim still Child Benefit and choose not to receive the payments, so that they do not have to pay the charge but still receive the associated NIC Credits and protect their State Pension.
Scottish Income Tax
The 2019-20 Draft Budget was passed by the Scottish Parliament on Thursday 21 February 2019.
Welsh rates of Income Tax (WRIT)
WRIT are in operation from 6 April 2019.
- Tax codes for PAYE taxpayers living in Wales now begin with ‘C’ and for those that complete a tax return online they will be asked to confirm their country of residence on their 2019-20 tax returns.
See Welsh income tax
Extension of Non-resident Capital Gains Tax (CGT) on UK property or land:
From 6 April 2019, Finance Act 2019 provisions bring more disposals of interests in UK property or land by non-residents into charge to UK tax by including the disposal of non-residential UK property.
Filing requirements for Non-resident CGT:
Your clients need to complete a Non-resident CGT return when they sell or dispose of any UK property or land after April 2019 (previously applied to residential property only). HMRC must be notified within 30 days of the conveyance date using HMRC’s online form.
The following must complete a NRCGT return:
- a non-resident individual including those who are in a partnership.
- personal representative of a non-resident who has died.
- a non-resident non-corporate landlord or trustee.
- a UK resident meeting split year conditions and the disposal is made in the overseas part of the tax year.
Summary of key changes from 6 April 2019
- Disposals of interests in all UK property or land will be chargeable to UK taxes.
- A new charge for non-residents’ gains on indirect disposals of 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 non-resident companies that sell or dispose of UK property or land after 5 April 2019 are chargeable to CT on the gain, but must still notify HMRC even if there is no tax to pay.
- If the non-resident company has not previously submitted a UK CT return, or there has been a period of ‘dormancy’ since they last did so, they will need to tell HMRC about the disposals.
Reminder of changes to instalment payments for very large companies
The Corporation Tax (Instalment Payments) (Amendment) Regulations 2017 introduced changes to the quarterly instalment payments regime.
- For accounting periods beginning on or after 1 April 2019, companies with taxable profits exceeding £20m will be required to make payments four months earlier.
- For a 12 month accounting period, payments will be due in months 3, 6, 9 and 12 of the current accounting period.
Claim a refund for Construction Industry Scheme (CIS) deductions
- If your client is a limited company subcontractor and they have paid too much tax or National Insurance, they can claim a repayment for CIS deductions.
- Claims for repayment can be made online, but must be submitted by post if the employer wants HMRC to pay an agent or other nominated representative.
- HMRC will only start processing CIS overpayment requests for the tax year 2018-19 from the 24 April 2019. As it can take up to 40 working days to process an application HMRC ask advisers to wait until 19 June 2019 before chasing clients’ overpayment application.
P11D and P11D(b) for the tax year 2018 to 2019
The deadline for reporting expenses and benefits in kind to HMRC for tax year ending 5 April 2019 is 6 July 2019.
Details on when you will need to submit a P11D(b) form can be found on the Employer Bulletin: April 2019.
P11D and cars
- It is important that your clients report all the information regarding cars, and do so correctly.
- Common mistakes include submitting the wrong CO2 emissions, not including accessories, incorrectly recording capital contributions and private use payments, and incorrectly reporting 5 April as the end date.
Diesel Supplement Company Car Tax Changes to meet Euro standard 6d
From 2019-20 onwards, employers should use the New starter checklist. It includes a new section for PGL.
Changes to the Earlier Year Update (EYU)
From April 2019 HMRC are running a trial aimed at simplifying the process for reporting corrections by extending the use of the Real Time Information (RTI) Full Payment Submission (FPS).
See Employer Bulletin: April 2019 for more details.
Disguised Remuneration Loan Charge
The disguised remuneration loan charge came into effect on 5 April 2019.
- If your clients used a disguised remuneration scheme and they did not settle by 5 April 2019, or they are not in the settlement process, there will be a loan charge to pay.
- For those who are in the settlement process, HMRC encourage you to finalise their settlements promptly.
- Where all necessary settlement information was provided to HMRC by 5 April 2019, and any actions are satisfied by the dates given by HMRC, the current settlement terms remain available and the loan charge reporting and accounting requirements will not apply.
Loan Charge Reporting Requirements:
- Where settlement is not reached, any outstanding loans must be reported as employment income arising on 5 April 2019.
- Where employers are using an Earlier Year Update through Basic PAYE Tools to report the loan charge, they will need to use the tax, NICs and Student Loan deductions tables to calculate the tax due.
Self Assessment (SA) Payments on Account (POAs)
There is an ongoing problem whereby POAs for 2018-19, in some instances, have not been created from the 2017-18 tax return.
The due date for the first POA for 2018-19 was 31 January 2019. As this date has now passed HMRC should not create a POA unless:
- individuals in SA have made a payment to cover the POA or
- they, or their agent, insists on POAs being created.
If HMRC create the requested POAs interest will accrue until the payment is made.
VAT: Building and construction services reverse charge
The building and construction services reverse charge for VAT measure comes into effect on 1 October 2019:
- It will apply to standard and reduced-rated supplies of building and construction services to VAT registered business making onward supplies of those building and construction services.
- The scope of supplies affected is closely aligned to the supplies required to be reported under the Construction Industry Scheme, but does not include supplies of staff or workers.
- The legislation introduces the concept of “end users” and “intermediary suppliers” which covers businesses or groups of associated businesses that do not make supplies of building and construction services to third parties and so are excluded from the scope of the reverse charge. Examples include landlords, tenants and property developers.
How to monitor an Online VAT Registration application
The best way to monitor the progress of a VAT Registration application is through your Agent Services Account. You will see a notification acknowledging receipt and the status of the VAT Registration Application. You will find the VAT Registration number here too when the application is processed.
Off-payroll working rules (IR35)
There has been a change to the guidance for people working through their own intermediaries in the public sector. The change is to the second paragraph for ‘Salary’ under the heading ‘Pay Yourself Through Your Company’. The new paragraph reads: “You should report non-taxable payments your company pays you on the Full Payment Submission (FPS) that your payroll software produces”.
Off-payroll working rules from April 2020:
Digital research and development (R&D) credits form for small and medium sized enterprises (SME) claimants
A digital report form is now available to support R&D claims by SMEs. The form has been designed so that it can be used by unrepresented claimant companies, as well as agents. A digital form for R&D expenditure credit claimants will be released later in spring 2019.
Making payments to HMRC easier
Your clients can now pay their Self Assessment, Employers PAYE and Corporation tax quickly by using the green ‘Pay now’ button on GOV.UK.
From 31 March 2019 this facility is extended to other taxes including:
- Construction Industry Scheme (CIS) late filing penalties
- PAYE late payment or filing penalties
- Class 1A National Insurance
- PAYE settlement agreements
- Miscellaneous Penalties
- Stamp Duty Land Tax
- Simple Assessment
Unpaid work trials and the National Minimum Wage
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.
- 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 they 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: A new type of phishing scam regarding ‘Tax Returns’, which is being circulated in high volumes, has been added.
- 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.
Other recent publications
- Spotlights: HMRC have recently published Spotlights 47-50 on tax avoidance.
- Employer Bulletins
- National Insurance Services to Pensions Industry: countdown bulletins
- Pension schemes newsletter
- Revenue and Customs briefs