HMRC have issued the Agent Update for February/March 2020. 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 in the Employer Bulletin February 2020. Rather than duplicate these we have linked to those updates where appropriate.
Future relationship with the EU
Now that we have left the EU, we have entered a transition period that lasts until 31 December 2020.
- There will be no changes to the terms of trade with the EU or the rest of the world during this time.
- In January 2020 HMRC contacted UK businesses who trade with the EU to explain some of the actions they need to take to prepare for changes to customs' arrangements after the transition period, including:
- Making sure they have a UK Economic Operator Registration and Identification (EORI) number.
- Preparing to make customs declarations by deciding if they want to use a third party such as a customs agent or make declarations themselves.
Deadline extended for grant funding
- To help prepare businesses for completing customs' declarations, the deadline to apply for at least £7.5 million of grant funding for dealing with customs declarations through training, IT and extra staff, has been extended to 31 January 2021. Businesses that want to apply for funding should not contact HMRC but can apply online.
Disguised remuneration: independent review of the loan charge and what it means for your clients
See Employer Bulletin: February 2020 and Disguised Remuneration loan charge.
Capital Gains Tax Payment for Property Disposals
From April 2020, Capital Gains Tax (CGT) due on the disposals of a UK residential property must be reported and paid to HMRC within 30 days of completion of the disposal.
- Non-UK residents who currently report property disposals within 30 days can no longer defer payment.
- HMRC are developing a new digital service which will be available from April 2020 to make it easier for taxpayers to report and pay their CGT property disposal liability.
- For taxpayers who have no other Self Assessment (SA) criteria, they will no longer need to register for SA to notify and pay for a ‘one-off’ property disposal to report the gain.
- If your client is already in SA to report other liabilities you will need to ensure that the gain is included on their SA tax return and the return is being amended to allow you to do this.
- Late filing and late payment penalties and interest will apply.
HMRC is seeking tax agents representing UK and non-UK resident individuals or trusts who are likely to need to report CGT on UK property for a client after 6 April 2020 and their clients to help trial the new online 'Report and pay CGT on UK property' service. Email
See CGT: payment of tax and Reporting capital gains: how to?
Research and Development Claims
HMRC say 98% of the backlog for R&D claims had been processed according to plan by 1 November 2019. Due to the huge increase in claim volumes in December 2019, while the transition of R&D processing work to HMRC Business Tax and Customs was ongoing, there may be some further delays in dealing with claims.
For technical queries regarding R&D email
See our R&D zone for details on the different R&D reliefs and how to claim them.
Company car changes: the diesel supplement and ultra-low emission cars
See Employer Bulletin: February 2020.
Sending your client’s 2020-21 Annual Tax on Enveloped Dwellings (ATED) return
The ATED period is 1 April 2020 to 31 March 2021 and returns for that period must be filed by 30 April 2020 where your client owns a property on 1 April 2020.
- If you have not yet registered with HMRC to use the online service, you need to do so before the 1 April 2020 to ensure you have the right access before the filing deadline of 30 April 2020.
- You cannot submit a 2020/21 return before 1 April 2020.
- If your client has disposed of property, send an amended return or contact HMRC to notify them of this change.
See Annual Tax on Enveloped Dwellings (ATED)
Reminder: Changes to the Short-Term Business Visitors (STBVs) special arrangement under Regulation 141
See Employer Bulletin: February 2020
Help HMRC improve the Corporate Interest Restriction (CIR) Return
- HMRC are improving the CIR return to bring together all the current spreadsheets and forms into an easily accessible format that fits GOV.UK standards.
- They are looking to develop an Application Programme Interface (API) to support integration with software products and are looking for volunteers to help design a service that fully meets the needs of businesses and agents.
- If you or your client would like to be involved get in touch by emailing ash.newnes@digital. hmrc.gov.uk
See Corporate interest restriction
Student and Postgraduate Loans
See Employer Bulletin: February 2020
Changes to the coding-out of debt via Self Assessment (SA)
HMRC currently code-out outstanding debts relating to SA where customers have not settled their debt and failed to engage with them, from the 6 April following the notification letter.
- From March 2020, HMRC will change the individuals’ tax code immediately within the current tax year and the taxpayer will see an immediate reduction in their net pay.
- If all the debt cannot be collected in the current year some may be collected in the following year.
- If you have clients with outstanding SA debts you should advise them of the change. If they do not want the debt to be collected through their pay they will need to pay it in full or contact HMRC to discuss payment options.
See Collecting tax debts via PAYE
New National Minimum Wage rates announced
See Employer Bulletin: February 2020 and National living wage rates /National minimum wages rates
Marriage Allowance
- Marriage Allowance lets one partner transfer 10% of their Personal Allowance, so currently £1,250, to their husband, wife or civil partner if they earn more than them.
- They can benefit from Marriage Allowance if:
- they are married or in a civil partnership and
- they do not pay income tax
- their partner pays income tax at the basic rate.
- They can backdate a claim by up to four years, currently to include any eligible tax year since 5 April 2015.
- The law has recently changed allowing heterosexual couples to enter into civil partnerships, and eligible civil partners can claim the allowance.
See Marriage Allowance (Transferable married couples allowance)
Reporting expenses and benefits and PAYE Reporting final PAYE submissions
See Employer Bulletin: February 2020
Preparing for changes to the Employment Allowance
See Employer Bulletin: February 2020
National Insurance rates and thresholds for tax year 2020-21
- The government has confirmed NIC thresholds will rise to £9,500 per year for 2020/21.
- All other thresholds to rise with inflation, except the upper NIC thresholds which will stay at £50,000.
See National Insurance: rates and Employer Bulletin: February 2020
Class 1A liabilities payable on Termination Awards, Sporting Testimonials and Sporting Testimonial Payments come into effect from 6 April
See Employer Bulletin: February 2020 and Termination, redundancy and leaving payments (from 6 April 2018).
Corporation Tax
Non-resident company landlords and Corporation Tax Corporation Tax Unique Tax Reference Number (CT UTR)
Non-resident company landlords (NRCLs) are currently chargeable to Income Tax on the profits of their UK property businesses. From 6 April 2020 they become chargeable to Corporation Tax.
- HMRC have generated Corporation Tax Unique Tax Reference Numbers (CT UTR) based on those companies who filed a 2017-18 Non-resident Company Income Tax Return and are writing to these customers to let them know their CT UTR and set out the list of actions to take.
- Companies who did not file a tax return for 2017-18 will receive a letter from HRMC when they deal with their 2018-19 SA700.
Action required when the CT UTR is provided:
- Tell HMRC if the NRCL already has a CT UTR, no longer lets out UK property or completes a different Tax Return that is NOT a SA700.
- Tell HMRC in writing if the NRCL prepares accounts to a date other than 5 April. HMRC will set up the CT record with a default accounting period ending on 5 April 2021 and need to know if this is incorrect.
- Register with HMRC Online Services as the CT Return can only be filed online.
- Update any agent authority in place to include Corporation Tax matters.
See Non-resident landlord scheme
Review of off-payroll working rules from April 2020
The government has commissioned a review of the upcoming reform to the off-payroll working rules.
See Call for evidence: Extension of the off-payroll working rules to the private sector and Employer Bulletin: February 2020.
Parental Bereavement Leave and Pay
See Employer Bulletin: February 2020
Booklet 480 available online
HMRC has published a new online version of the expenses and benefits for directors and employees – a tax guide: booklet 480.
Tax Disputes
Is your client in dispute with HMRC over an appealable tax decision? HMRC offer an Alternative Dispute Resolution (ADR) service where HMRC hopes to resolve your tax dispute within 120 days.
Consultations
You can check the status of tax policy consultations on gov.uk or see Finance Act 2019: tax update & rolling planner 2019-20
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.
- 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? Find out when you can expect to get a reply from HMRC to a query or request you have made.
- You can check the latest updates to HMRC manuals or subscribe to an 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.
- 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 content
Other recent publications
- Spotlights
- Employer Bulletins
- Trust and Estates newsletters
- National Insurance Services to Pensions Industry: countdown bulletins
- Pension schemes newsletter
- Revenue and Customs briefs
External link:
Agent update 76: February – March 2020