UK transition

Reminder of changes to the Merchandise in Baggage exports process from July 2021

• From 1 July 2021, there will be changes to how your clients export commercial goods out of Great Britain (England, Wales and Scotland) in their accompanied baggage or small vehicle (also known as Merchandise in Baggage).
• When a full export declaration is submitted, the goods will be automatically ‘arrived’. This means traders will no longer need to present their goods to a Border Force officer at airports or ports of departure with red channels.
  • Ports without red channels will no longer require completion of a C1601 for the National Clearance Hub (NCH) to arrive the goods.
• This change only applies to Customs Handling of Import and Export Freight (CHIEF) users.
  • The process for traders on the Customs Declaration Service will remain the same for the time being, however, these changes will be made for Customs Declaration Service at a later date.
• You must submit a full export declaration before you leave Great Britain if your goods:
• • Have a value of more than £1,500.
  • Weigh more than 1,000kg.
  • Are restricted goods.
  • Are alcohol, tobacco or fuel (excise goods).
  • Need a licence (controlled goods).
  • Are being put into a customs special procedure.
• If you do not need to make a full declaration, you can make an online declaration in the five days before you leave with your goods.
• You can also add goods to a declaration you’ve already made as long as all the goods combined do not exceed the total value of £1,500, weigh less than 1,000 kilograms and are not controlled goods.
• If you want to know more about the rules for Merchandise in Baggage, you can watch HMRC's new video and read their travellers’ communications pack.
  • For more information, read the full Taking commercial goods out of Great Britain in your baggage guidance.
• Share these with your clients if they would like to find out more about carrying commercial goods in accompanied luggage or a small motor vehicle.

Postponed VAT accounting: cash flow help for VAT registered importers

• Postponed VAT accounting was introduced in January 2021 to allow UK VAT registered importers to account for and recover import VAT on the same VAT return, subject to the normal rules on input tax deduction.

How importers can avoid pitfalls

• Make sure you use postponed VAT accounting when it’s compulsory.
  • You must use postponed VAT accounting if you import non-controlled goods from the EU to GB between 1 January 2021 and 31 December 2021 and use delayed declarations, or use the simplified customs declaration process (if authorised) and make a declaration in your own records.
• Do not miss out on the cashflow advantage. Using postponed VAT accounting provides significant cash flow benefits compared to paying the import VAT when the goods are imported.
• Take care when selecting how to account for import VAT on the customs declaration.
  • It cannot be changed once the declaration has been submitted.
• If someone else is doing the customs declarations for you, make sure they know you want to use postponed VAT accounting.
• If anyone, such as a freight forwarder, customs agent, broker or fast parcel operator acts on your behalf, keep a written record of what is agreed.
• Make sure you have the information you need to get access to Customs Declaration Service to view your statements. You will need:
• • The Government Gateway user ID and password connected to the EORI number for the business or subsidiary making the Customs declarations: if you cannot remember your Government Gateway credentials you can get help at HMRC services: sign in or register.
  • Your Unique Taxpayer Reference (UTR): you can find a lost UTR number.
  • National Insurance number (if you’re an individual or sole trader).
  • The address and postcode that match the details held by HMRC or a business address, which must match Companies House.
  • The date you started your business.
• Check you have entered the details correctly before submitting them. Take a screengrab of any error messages you receive.
• Do not leave it too late. Make sure you get access to Customs Declaration Service to view and download the statements in time to complete your VAT return.
• You’ll only be able to access a statement for six months from the date it is published, so you must download and keep a copy of each statement in your records.
  • The statements that were produced at the start of 2021 will not be available for much longer.
• Check your statements. In the same way that you would check your bank statements, you should compare the entries on your statements to your other import records.
  • Make sure that you recognise all the entries and they appear as you expect.
• Check you are using the correct statements. There were some problems with the production of January 2021 and February 2021 statements.
  • There is guidance on how to complete your VAT return if you have problems with your monthly statements.
• If you take reasonable care to follow the guidance but make an error completing your VAT return, there will be no penalty.
  • If you have made a mistake put it right as soon as you can.

General preparations

• Remember that postponed VAT accounting is just one aspect of importing goods that your clients need to know about.
• Even if they chose to delay sending HMRC full information about their goods by up to 175 days, there are other actions, in addition to accounting for import VAT on their VAT return, they need to take before the deadline.
• They should check the guidelines and find out how to delay declarations.
• HMRC will continue to provide guidance and support to help businesses, including information on GOV.UK, live webinars and through fortnightly emails, including this recent email focusing on postponed VAT accounting.
• If you know of a business that would find these emails helpful, suggest they register to get these updates directly to their inbox.

See Place of supply: Goods

Help your clients identify customs authorisations

• HMRC have created an online tool to help businesses check which customs authorisations they might be eligible for.
• Applying for authorisations could make the process of declaring goods quicker, simpler or even less costly.
  • For example, a business importing goods temporarily for manufacturing or repair purposes may not need to pay duty on these.
• Do share this or use it yourself if you are thinking of applying for an authorisation.

Tax

Paying Class 1A National Insurance contributions on payrolled benefits in kind: Generic Notification Systems (GNS) message

• Employers that they need to pay Class 1A National Insurance Contributions and complete a P11D(b) by 6 July 2021 if they have taxed benefits in kind through the payroll.
• In early June 2021, HMRC will issue a Generic Notification System (GNS) message via the Real-Time Information payroll system to contact employers where they hold data that suggests they are taxing benefits through payroll.

See P11D: Reporting benefits and expenses

National Insurance holiday for the employers of veterans: update

• Employers are now eligible for a zero rate of Secondary Class 1 National Insurance Contributions on the earnings of veterans.

See Employer NICs relief for veterans

Reporting Pay as you earn (PAYE) in real time

• HMRC have published an article in the June 2021 Employer Bulletin advising employers of the continuation of the risk-based approach to charging penalties.
• It also provides information on reporting your payroll information accurately and on time.

See Employer Bulletin: June 2021

Extended loss carryback: claims information for companies

• The extended loss carryback measure announced at Budget 2021 enables companies to make claims to carry back losses for a further two years than current rules allow.
• Claims for the extended relief could not be made until the Finance Bill received Royal Assent. This occurred on 10 June 2021.
• Any claims received before Royal Assent will not be processed and claimant companies will be asked to re-submit their claims in July 2021.

Claims Process after Royal Assent

• Claims that exceed the de minimis of £200,000 must be made in a company tax return.
  • Box 45 (claim or relief affecting an earlier period) on the CT600 should be completed and details of the carry back claims included in the computations that accompany the CT600 and accounts.
• There is no need to submit amended returns for the earlier periods to which the extended relief applies as the claims will be treated as amendments to those returns.
  • Amended returns for these periods will be rejected for online submission as, in most cases, they will be out of time for amendment.
• Claims below the de minimis limit of £200,000 may be made outside of the company tax return.
  • HMRC will shortly provide an update on the preferred method for claim submission, which will look to get these claims processed as quickly and efficiently as possible.

See Losses: Trading and other losses

VAT Reverse charge on construction and building services

• VAT-registered construction businesses should note that this reverse charge, which was explained in a Revenue and Customs Brief issued in June 2020 came in on 1 March 2021.
• See CIS: Construction Industry reverse charge

Off-Payroll Working rules

• The Off-Payroll Working rules changed on 6 April 2021.
• If your clients are medium and large-sized organisations who engage contractors through their own limited company or other intermediary, they should now be operating the rules.
• HMRC have new flow chart for client organisations to help you understand if the rules apply to you.
• A live Q and A session with technical advisors on 23 June 2021 for clients, agents and contractors, where you can get your questions on the rules answered. Registration links are available via HMRC’s LinkedIn.
• A webchat on off-payroll if you want to talk to HMRC directly.
• For those who have decided to reconsider how they offer contractors roles, HMRC have published new guidance on working through an umbrella company which you can share with any contractors who may find it useful.
• HMRC are working to identify any sectors that may benefit from further support and will be delivering additional workshops for the construction sector, which will be advertised through stakeholders. If the sector you work in could benefit from additional support on the changes to the rules then get in touch by emailing This email address is being protected from spambots. You need JavaScript enabled to view it..
• You can continue to use all other guidance, as well as HMRC's free, digital Check Employment Status for Tax (CEST) tool to help with employment status decisions. The CEST Landing Page has recently been updated to reflect the changes to the Off-Payroll Working rules that took effect on 6 April 2021, improve customer journeys and signpost customers to specific guidance to help them use CEST effectively. The tool itself and the decision it gives has not changed.
• HMRC's programme of live webinars on the general rules, status decisions, when the rules apply, fee-payers and international issues has now ended, but you can continue to access recordings of all six webinars on HMRC's help and support page.

See Off-Payroll Working: PSCs & Private Sector Engagers

Rates of Stamp Duty Land Tax for non-UK residents

• From 1 April 2021, new rates of Stamp Duty Land Tax (SDLT) have applied to purchases of residential property in England and Northern Ireland made by non-UK residents. The new rates are 2% above those payable by UK residents.
• Following stakeholder feedback, two errors in the underlying legislation have been identified. As a result, on 17 May 2021 the government laid three amendments to the Finance Bill 2021-22 correcting those errors:
• • The first two amendments correct an error in how the non-UK control test applies in relation to de minimis interests when determining whether a UK resident company is liable to pay the surcharge.
  • The third amendment provides for UK resident corporate trustee purchasers to be exempt from the close company and non-UK control tests.
• The amendments can be found on pages 73 and 74 with explanatory notes.

What to do if your client is affected.

• Those customers who have not yet submitted an SDLT return may do so based on the amendments having effect from 1 April 2021.
• Those customers who have already submitted their return based on the original legislation may amend that return and obtain a repayment of any tax overpaid.
• Details of how to amend a land transaction return.
• For more information on the rates of Stamp Duty Land Tax for non-UK residents and the SDLT residency tests.

See SDLT: Non-residents' surcharge

Making Tax Digital

Digitising a customer’s P800 or PA302

• From May 2021, personal tax account users who have opted for paperless preference will now receive their P800 or PA302 digitally through their personal tax account.
• This change does not affect agents, who will continue to receive paper copies.

Making Tax Digital for Income Tax Self Assessment

• Making Tax Digital for Income Tax Self Assessment is being piloted right now and the Making Tax Digital Programme continues to make changes, based on user feedback, to further improve HMRC's digital services for agents.

New clients: asking for authorisation and sign up your client to Making Tax Digital for Income Tax Self Assessment (delivery Summer 21)

• Agents will be able to use their agent services account to ask for a client authorisation for Making Tax Digital for Income Tax before signing up the client. This was not possible for Making Tax Digital VAT, but HMRC have acted on your feedback.

• HMRC are removing the need for clients to be registered for Self Assessment online services before they can access the Making Tax Digital Income Tax Self Assessment authorisation request online and accept it.
  • Clients will be able to use their Gateway ID they use for their personal tax account.
• For clients who do not normally engage online with HMRC, HMRC are changing the service to allow them to create a new Gateway ID and complete Identity Verification to enable them to accept the agent authorisation request.
  • The new Gateway ID will allow those clients access to their personal tax account, should they want to.

Making Tax Digital functionality:

• Agent viewer for Making Tax Digital for Income Tax Self Assessment new viewer and access to content being deployed
• This is a new service and is available to agents who have clients who have signed up to Making Tax Digital Income Tax Self Assessment.
• This will enable agents to view their Income Tax Self Assessment clients’ tax calculation, obligations and payments.
• When you start signing up your clients to Making Tax Digital Income Tax Self Assessment you will be able to use the new Making Tax Digital Income Tax services we are building to enable you to manage your client’s tax account online.

Making Tax Digital Income Tax Self Assessment: pilot

• HMRC are running a pilot for Making Tax Digital Income Tax Self Assessment to work with software developers, agents and their clients to test the service and help identify and resolve any issues ahead of compulsory sign up in April 2023.
• There are limitations as to who can use the tool. See our MTD: Income Tax Pilot Tool

HMRC agent services

Plastic Packaging Tax: call for research participants

• HMRC's research is actively taking place for the Plastic Packaging Tax service, with the tax taking effect from April 2022.
• HMRC are looking to meet with tax agents in exchange for an incentive of £60 per session.
• The aim is to gain input on the usability of HMRC's service in areas such as registration and returns.
• From research, HMRC's understanding is that some clients may use tax agents to support them in advance of the tax going live, or once it has.
• HMRC would be grateful for engagement with tax agent professionals. The research team can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..

Trust Registration Service (TRS)

Taxable trusts

• If you registered a taxable trust before 4 May 2021, the next time you access it you will need to:
• • Tell HMRC if the trust is an express trust or not.
  • Declare that the trust pays tax or has previously done so.
• Once you have given HMRC the above information, you will need to sign out of the service before you can update any additional information about the trust.
• This information will be part of the usual registration process for all trusts registered after 4 May 2021.

TRS technical manual published

• HMRC have now published the Trust Registration Service manual.
• See Trust Registration Service manual

Non-taxable trusts  

• HMRC are continuing to allow non-taxable trusts to register their trust details on an invited basis.  If you have a non-taxable trust and are willing to participate in this development phase, contact This email address is being protected from spambots. You need JavaScript enabled to view it..  
• All requests will be logged, and HMRC will be in contact regarding an invitation.  

Changing a non-taxable trust to a taxable trust

• HMRC will soon be starting to allow non-taxable trusts that have registered as part of the development phase, to update TRS if they become taxable.
• HMRC ask that you and your members do not contact the HMRC Trusts helpline about non-taxable trusts as this part of the service are still in development. 

Changes to the ‘claim a trust’ process

• HMRC have listened to feedback and will soon be making changes to the claim a trust process.
• There will no longer be a requirement for the trust to be claimed by the client to authorise an agent to make changes to the trust details.
• The client will still need to create a Government Gateway Organisation Credential to authorise the agent before an agent can make changes to the trust details.

See Trust Registration Service

Agent Talking Points

• All agents will be aware of HMRC's agent talking points webinars, for which most agents receive regular Monday morning updates.
• Let HMRC know if there are any subjects that you would like HMRC to cover.
• HMRC are, of course, unable to give 100% assurance that these will be developed into a full Talking Points webinar.
• HMRC would welcome any of your suggestions.
• Send your requests or ideas to This email address is being protected from spambots. You need JavaScript enabled to view it.. Note that this is not a correspondence mailbox for customer or general queries, and HMRC will not be able to deal with non-Talking Point related queries.

Tax Administration Framework Review

• In July 2020, the Government published its 10-year strategy for the tax system (Building a trusted, modern tax administration system). This committed to publishing a call for evidence on the Tax Administration Framework, which was published on 23 March 2021.
• The call for evidence considers different aspects of the tax administration framework. Respondents should not feel that they must respond to all the questions in this document.
• Send any questions, queries or response to the call for evidence to This email address is being protected from spambots. You need JavaScript enabled to view it. by 13 July 2021.

See Call for Evidence: Tax Administration Framework

Join like-minded subject matter expert businesses benefiting from the Peer Networks Programme

• Peer Networks is a free peer-to-peer networking programme for subject matter expert leaders that are keen to develop their organisation for future success.
• Join almost 5,000 businesses that have joined the Peer Networks programme to create real solutions to challenges they have faced because of COVID-19.
• The Peer Networks programme is being delivered locally through Growth Hubs across England, who are creating diverse networks of business leaders to discuss common business challenges from finance and HR, to sales and marketing.
• Business leaders will be able to discuss their individual challenges, reflect on valuable feedback from their peers, and identify practical solutions to improve their productivity.
• The programme is available to any subject matter expert business based in England that has:
• • Operated for at least one year.
  • At least five employees.
  • A turnover of at least £100,000.
• Expert facilitators will provide business leaders with the opportunity to create a trusted support network that works for them, helping to build and strengthen the business and improve its performance. Participants will also receive 1:1 support tailored to individual needs. To find out more, go to: https://www.peernetworks.co.uk/

Tax Agent Toolkits

The complete catalogue of HMRC toolkits has been updated to assist with the completion of:

• 2019-20 Company Tax Returns.
• 2019-20 Self Assessment Tax Returns including Capital Gains Tax toolkits.
• 2019-20 National Insurance Contributions and Statutory Payments, employers’ end of year forms and 2020-21 recordkeeping.
• 2019-20 Property Rental Income.
• 2020 VAT toolkits.

Other recent publications

Spotlights

Employer Bulletins

Trust and Estates newsletters

Countdown bulletins for pension scheme administrators

Pension schemes newsletters

Revenue and Customs briefs

Agent forum and engagement

Agent forum update  

• The Agent Forum is a platform where agents raise potential widespread issues and ask questions about HMRC’s systems and processes which may have significant impacts on the agent community. 
• Agents can highlight issues they are experiencing and share this with members on the forum. 
• Posts must conform to Forum Terms and Conditions and should be concise and focus on evidence supporting an issue that exists rather than extended comment or opinion. 
• Issues escalated by the Issues Overview Group:
• • CGT 30-day reporting cases
  • Authentication of software for API
  • SA-API not returning expected data

Agent Dedicated Line (ADL)  

• Meetings between HMRC and Professional Bodies to discuss the ADL were held on 2 March 2021 and 27 April 2021. 
• HMRC committed to a number of further actions to improve digital alternatives and to consider options to strengthen assistance to agents with a further meeting being held 8 June 2021.

UK Property Reporting Service

• The Issues Overview Group have provided HMRC with evidence of potential issues with the UK Property Reporting System. A meeting to review these concerns is scheduled in June 2021.

Small print & links

External link

Agent Update: issue 85