HMRC have issued the Agent Update for December 2020. We have summarised the key content for you with links to our detailed guidance on the topics covered.

Some of the following items have been duplicated in this month's Employer Bulletin and rather than reproduce these we have linked to those updates where appropriate, See: Employer Bulletin December 2020

Self Assessment

Talking points

Agent Talking Points are weekly online webinars for tax agents and advisors, with HMRC experts on hand to answer questions. This update contains links to November's webinars.


There are 19 toolkits that can be found on here and which provide guidance on common errors that HMRC frequently see in filed returns. The toolkits are updated each year to reflect any changes.

The update focusses on eight toolkits that could help minimise errors on SA returns for 2019/2020.

HMRC YouTube

Did you know HMRC has its own YouTube channel? They produce help and support videos on a range of different tax matters, to guide customers through various transactions with HMRC. You can subscribe here

Agent Forum

  • The Agent Forum has a board, SA21, dedicated to the year-end filing for Self Assessment for 2019/2020. It is aimed at small businesses and agents, with the latest information available and a place for agents to ask questions.
  • There are also dedicated sections for COVID-19 and UK Transition.
  • The Agent Forum Service is currently available to registered members of Professional Bodies (PBs). If you are not registered, belong to a PB and wish to join, you can do so by opening this HMRC URL link

Self Assessment (SA) Peak 2021, providing accurate information on your client`s return

HMRC receive over 11 million digital tax returns each year and approximately 90,000 need clerical review. This results in a delay in processing your client’s return.

Below are some of the main reasons why the process can be delayed:

  • Marriage Allowance (MA) relief claimed through return only
    • If your client's partner did not submit a regular claim (online/phone call/letter) this could cause a delay.
    • Check your client's P2 notice for the correct year to find out.
    • If both partners are in SA, it is preferable that the transferring partner submit their return first. This will allow the SA system to update and process the transfer.
  • Submitting a return as an amendment
    • A large number of returns are submitted as amendments and cannot be processed without the filing of the original return.
    • Ensure the correct return type when submitting: live/test, full return/amendment.
  • Did your client receive a Self Assessment closure letter (form SA832) for the year you are trying to submit?
    • If HMRC recently closed your client’s Self Assessment record this means that you might not be able to submit their return online and you will need to ask HMRC to reopen the account for filing.
  • Does the Class 2/4 National Insurance Contributions (NICs) show correctly on the return?
    • Class 2/4 NIC can only be included on your client`s return if they are set up correctly on our National Insurance self-employed database.
    • Submit a form CWF1 to tell HMRC about any new self-employment or partnership income source.
  • Have you checked that your software is up-to-date?
    • Out of date software can cause the return to be rejected due to non-compatibility. Rejected returns then require clerical review, causing lengthy delays.
  • Are you submitting an amendment for an earlier year on the 31 January?
    • Filing amendments for prior years on 31 January can cause delays. To help avoid this, please file amendments as early as possible.

HMRC has also reviewed the information available from the COVID-19 support schemes to locate issues with Tax Returns. There were common errors which made some customers not eligible for Government help. These influenced individuals’ liabilities and eligibility for National Insurance benefits. It also affected eligibility for the Self-Employed Income Support Scheme (SEISS) grants.

  • Employment or Self-Employment?
    • Inputting income into the incorrect sections on the return can lead to miscalculations of tax liabilities and NICs. Income from different sources must be filed in the correct sections.
    • Care should be taken in industries such as Entertainment or Construction, where employed and self-employed contracts are used.  
  • Self-Employment as Other Income
    • Self-employed income must be declared on the Self Employment pages and Class 2 and 4 NICs must be registered for.
    • Declaring this income as 'Other Income' will give rise to incorrect NIC liabilities, may affect available reliefs and will not count for National Insurance Benefits.
  • Declaring income for the wrong tax year
    • If a return is submitted late, ensure that all the information is for the relevant year. HMRC can find the return unsatisfactory if it contains income for the wrong year.
  • Not completing the return fully
    • Do not submit the return until the software shows as 100% complete.
    • SEISS can be refused on this basis.
    • You will get a receipt number upon submission, keep this safe for later reference.

Whilst a tax return may be subject to delays, the payment deadline stays the same. Ensure clients have paid on time along with any Payments on Account due. HMRC acknowledges that this has been a difficult year and reminds agents that their clients could spread the costs through a Self-Serve Time to Pay arrangement.

Self Assessment Paper Returns
Including personal details on Self Assessment paper tax returns

If you need to submit a paper return, remember to include the following details on the SA100, not the covering letter, to avoid delays:

  • National Insurance Number.
  • Unique Tax Reference.
  • Name and address.

You can enter these details before you print whether using GOV.UK or your own software.

Check if you need to tell HMRC about additional income

You can now check on GOV.UK to confirm whether you need to declare, or possibly pay tax on any ‘casual’ income you receive. This can include selling things online, casual jobs, charging for your equipment or renting out property.

31 January deadline for tax credits customers to update Self Assessment income types for the year ending 2019-2020, alongside the submission of their Self Assessment tax return

  • Due to Covid-19, HMRC did not stop payments or end awards at 31 July 2020.
  • Estimated income was still required to be reported by the self-employed.
  • Whether estimated income was reported to HMRC by 31 July 2020 or not, actual income figures need to be reported by 31 January 2021.
  • Updating estimated income can be done via the taxpayer's Personal Tax Account.
  • If no estimate was provided, HMRC should be informed by calling 0345 300 3900.

Capital Gains Tax (CGT), 2019-2020 SA Returns, Claims to Entrepreneurs’ Relief possibly showing as claims to Investors’ Relief

  • The 2019/2020 SA Return is the first to have a box specifically for claiming Investor's Relief (IR). It is Box 49 and Box 50 is Entrepreneur's Relief (ER).
  • Some claims for ER have been made in the IR box.
  • If a return has been filed with either relief being claimed, taxpayers are being asked to check the claim has been entered into the correct box. If not, an amendment can be made with a short accompanying note explaining the change, 

Non-Resident Company landlords, 2019-20 Tax Return

  • From 6 April 2020, non-UK resident companies carrying on UK property businesses will come within the charge to Corporation Tax. Up until that point, any profits of the business will have been chargeable to Income Tax.
  • Where a company uses a 31 March 2020 accounting year as the basis for the 2019/2020 Income Tax return, HMRC will accept the ignoring of the apportionment of 1 April - 5 April 2020 (as previously was the accepted approach). 
  • It will be expected that such an approach is taken for the following year and the Company Tax return due for 6 April 2020 - 31 March 2021 will include the full 12-month results from 1 April 2020.

Self Assessment and Corporation Tax repayments by Bankers Automated Clearing System (Bacs), a quicker way

  • Repayments of Self Assessment or Corporation Tax will be received quickest where the taxpayer enters their bank details on the SA100 or CT600, allowing payment via Bacs.
  • If no bank details are provided, repayments will be by a payable order which will take longer to clear.

Agent Account Managers (AAMs)

AAMs provide a service to help resolve client-specific issues, acting as an intermediary between agents and HMRC where the normal communication channels have broken down. The top three issues dealt with during the last SA peak were:

  • SA Correspondence: Forms SA400/SA1 and repayments made by tax return.
  • PAYE Correspondence: Repayment requests made by tax return.
  • Agent Maintainer: Form 64-8 authorisation.

During the peak period, timescales will be affected, so additional time should be allowed for.

For more information about the AAM service, please visit Agent Account Managers in HMRC.