HMRC have issued the Agent Update for June/July 2019. We have summarised the key content for you with links to our detailed guidance on the topics covered.
Help your clients prepare their workforce for EU Exit
More than two thirds of EU citizens in the UK are currently here for work and may be your clients or your clients’ employees.
- If they want to continue living and working in the UK after it leaves the EU, they and their family members can apply now to the EU Settlement Scheme (EUSS) here. Irish citizens do not need to apply.
- Successful applications will be granted either settled or pre-settled status. Which status applicants get depends on how long they have been living in the UK when they apply.
- You and your clients, as employers, are not obliged to pass on this information to staff nor do you need to check whether staff have applied.
Student Loans Student/Postgraduate Loan notices
From 6 April, there are two loan types in operation.
- Employers will receive a Student Loan (SL1) and/or Postgraduate Loan (PGL1) start notice, asking them to start taking deductions.
- The notice must be checked for the loan or plan type and deductions taken correctly and recorded on the Full Payment Submission (FPS).
- The Business Tax Account has been updated to show a combined total for both Student Loan and Postgraduate Loan Deductions.
Tax-Free Childcare - School holidays made cheaper
HMRC reminder that Tax-Free Childcare can be used to pay towards the cost of (qualifying):
- after school clubs.
- play schemes.
- holiday clubs.
- summer camps.
Help your clients understand the High Income Child Benefit Charge (HICBC)
- Individuals who receive Child Benefit may have to pay the HICBC if their income exceeds £50,000.
- As your clients and their employees receive their P60 at the end of the tax year they should:
- check their annual income, either on their P60 or Personal Tax Account, including any taxable benefits especially if their pay was just below £50,000
- notify HMRC and register for Self-Assessment by 5 October if they are affected by the tax charge
- complete a Self-Assessment tax return by 31 January and pay what they owe.
- People should fill in the Child Benefit claim form to ensure they get National Insurance credits, and help their children to automatically receive a National Insurance number before their 16th birthday.
- People have the option to opt out of receiving Child Benefit payments so they will not have to pay the charge but will still accrue credits towards their pension.
Offshore Time Limit Extension
- The assessing time limit for offshore matters and transfers has been extended to 12 years.
- This applies to Income Tax, Capital Gains Tax and Inheritance Tax.
- This affects taxpayers whose behaviour was not deliberate. The existing 20-year time limit still applies for deliberate behaviour.
Disguised Remuneration Loan Charge
Anyone who provided all the required settlement information to HMRC by 5 April 2019, and is still in the process of settling, should take the necessary actions outlined by HMRC by the dates set out in their HMRC correspondence in which case the November 2017 settlement terms will remain available and the loan charge requirements will not apply.
Loan Charge Reporting Requirements
- If a settlement is not reached by the date set out in HMRC’s letter of offer, any outstanding disguised remuneration loans must be reported as income arising on 5 April 2019 and the loan charge paid.
- Employers still in the settlement process, but who decide not to settle, must report and pay the loan charge using an Earlier Year Update through the Basic PAYE Tools as soon as possible after they know they will not reach settlement with HMRC.
Clients not in the settlement process
Clients with outstanding disguised remuneration loans, who are not settling, must report the loans and pay the loan charge.
- Employers should have reported outstanding loans and paid the loan charge by 22 April 2019. If they have not done so they can contact HMRC on 03000 599 110 to discuss what to do.
- HMRC are reviewing the records of employers from whom they expect returns to be made and contacting those not in the settlement process who have not reported outstanding loans.
- HMRC will consider issuing Regulation 80 determinations and s8 NIC decisions where needed.
Letters to Employers
- HMRC is aware that some individuals have written, what appear to be, template letters to companies claiming that they were employed by that company in the past, and seeking confirmation that the employer will account for the loan charge on their behalf.
- If a company is, or was, the end user of an individual’s services, and the contractual terms provide no evidence that they employed the individual, it is unlikely they need to report or pay the loan charge on that individual’s behalf.
For all loan charge related queries whether from employers, individuals or agents, HMRC advises you to call them 03000 599 110. On 12 July 2019 HMRC are hosting a webinar about loan charge compliance and the reporting requirements. Details of how to register for this webinar can be found here.
The Pensions Regulator: Auto enrolment re-enrolment
Re-enrolment is a two-stage process. and must be carried out every three years.
- Staff who opted out of their workplace pension, must be put back in.
- Employers must complete and submit the online re-declaration of compliance form to show The Pensions Regulator how they have met this responsibility.
Venture Capital Trusts: Introduction of New Regulation 22/22A Returns
Venture Capital Trusts (VCT) must make a return of all their investments for each accounting period. There is a new mandatory standardised digital template which must be filed electronically to replace the free format paper returns. The new template is available within the Venture Capital Schemes Manual (VCM).
2018-19 SA Exclusions and Specials Documents
The latest version of the Exclusions document, ‘version 1.1’, and Specials document, ‘version 2.0’ were published on GOV.UK on 24 May 2019. The documents can be found here.
There has been a problem where POAs for 2018-19 were not always being created from the 2017-18 tax return.
- If your client does not receive a statement of account letter in June or July 2019, as no 2018-19 POA have been created, you and your client do not need to do anything about this. Any liability for 2018-19 will be payable, in full, in January 2020.
- Any payment intended for the 2018-19 POA will be allocated against any 2018-19 Balancing Payment due on 31 January 2020.
- If your client made a payment intended for the 2018-19 first POA but 2018-19 POA have not been created and you or your client insists on POAs being created this can be done by phoning HMRC.
VAT: Building and Construction Services Reverse Charge
This reverse charge measure comes into effect on 1 October 2019.
- it will apply to standard and reduced-rated supplies of building and construction services made to VAT-registered business who make 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”.
P11D and P11D(b) Filing and Payment Deadlines
- The deadline for telling HMRC about Class 1A National Insurance contributions (NICs) owed and filing P11D forms, for the tax year ending 5 April 2019, is 6 July 2019 at the latest. failure to do so may result in a penalty.
- Class 1A National Insurance owed must reach HRMC by 22 July (19 July if you pay by cheque).
Income reporting requirements for tax credit renewal
- It is important for those with tax credits entitlement, to comply with the instructions on their annual renewal form about income reporting for the 2018-19 tax year ahead of the 31 July 2019 deadline.
- Income reporting includes net profit from self-employment, dividends, investment income, interest, pensions or income from property/rent.
HMRC Updating Partnership Tax Guidance
HMRC is currently updating the online Partnership Tax guidance to consolidate the majority of the existing partnership guidance from the Business Income Manual and the Employment Status Manual into the Partnership Manual and to publish new and updated partnership guidance, to include the relevant guidance for the Finance Act 2018.
Cyber Essentials: Simple and Effective
The Cyber Security Breaches Survey 2019 found that 32% of businesses in the UK had identified at least one cyber security breach in the previous 12 months. GDPR requires businesses to act swiftly in the event of a data breach.
To assist UK businesses, the National Cyber Security Centre have developed Cyber Essentials to help you protect your organisation against the most common cyber-attacks. Cyber Essentials Certification, using the self-assessment option, costs less than 10% of the average cost of a single data breach.
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.
Making Tax Digital for VAT
- Over 325,000 customers have registered for the service and over 180,000 VAT submissions have been received.
- We have now passed the first submission deadline of 7 June 2019 for the first monthly Making Tax Digital for VAT submission since the introduction in April and are approaching the first quarterly filing deadline of 7 August 2019.
- HMRC are now issuing reminder emails to customers to prompt them to meet the submission deadlines.
Other recent publications
- Agent Toolkits The following toolkits have recently been updated for 2019:
- Spotlights: HMRC have recently published Spotlights 50-52 on tax avoidance.
- Employer Bulletins
- Trust and Estates newsletters
- National Insurance Services to Pensions Industry: countdown bulletins
- Pension schemes newsletter
- Revenue and Customs briefs