Agent update: August 2021

HMRC have issued their Agent Update for August 2021. We have summarised the key content for you with links to our detailed guidance on the topics covered.

Coronavirus Job Retention Scheme (CJRS)

  • The deadline for CJRS claims for August 2021 is 14 September 2021. 
  • For August and September 2021, employers can claim 60% of employees’ usual wages for hours not worked, up to a cap of £1,875.
  • Employers must top-up employee wages to at least 80% of their usual wage for the hours they do not work, up to a cap of £2,500 a month.
  • The scheme closes on 30 September 2021.  

See COVID-19: Coronavirus Job Retention Scheme (CJRS) from 1 November 2020

EU Settlement Scheme: late applications

  • The deadline for the EU Settlement Scheme has passed.
  • Late applications may be accepted where there are reasonable grounds.

Coronavirus and social security coordination with the EU

  • Where the work location of employees who normally work in the UK, the EU, or both, has changed temporarily because of COVID-19 related travel restrictions, HMRC can consider individual circumstances to decide whether National Insurance Contributions (NICs) are due in the UK.
  • If proof of having to pay UK NICs is needed, it is possible to apply for a PDA1 certificate.
  • EU arrangements allowing HMRC to disregard changes to individuals’ work locations due to COVID-19 related travel restrictions will end no later than 31 December 2021.

Customs Declaration Service to become the single customs platform

  • The Customs Handling of Import and Export Freight (CHIEF) system will close on 31 March 2023 and be replaced with the Customs Declaration Service (CDS)
    • From 31 March 2023, all goods will need to be declared through the CDS.
  • CHIEF will be withdrawn in two stages:  
    • 30 September 2022: the ability to make import declarations will end.
    • 31 March 2023: the ability to make export declarations and the National Export System (NES) will end.
  • More detail about the exact arrangements for withdrawing CHIEF will follow. 

Basis Period Reform Consultation

  • A new consultation ‘Basis period reform’ was released in July 2021 alongside a policy paper and draft legislation. 
  • It is proposed that to simplify the tax system ahead of Making Tax Digital (MTD), trading profits of the self-employed will be allocated to tax years regardless of the business’ accounting period end date.
  • The transition would take place from 2022-23 with the changes coming into effect from 2023-24.
  • The consultation closes on 31 August 2021.

See Consultation: Income Tax Basis Period reform

Spotlight 58: Tax avoidance using unfunded pension arrangements

  • HMRC have published 'Spotlight 58: Disguised remuneration: tax avoidance using unfunded pension arrangements'.
  • This concerns a tax scheme aimed at company owners which HMRC views as tax avoidance. 

See Spotlight 58: Unfunded pension arrangements

Off-Payroll (IR35) contracted out services: make sure your clients are applying the rules correctly

  • HMRC are aware of arrangements being put in place following the 6 April 2021 Off-Payroll Working changes which mean some client organisations would no longer be responsible for considering the Off-Payroll Working rules.
    • These may be labelled as ‘contracted out services’ or ‘statement of works’.
  • HMRC recommend that clients and advisers approach claims that the Off-Payroll Working rules do not need to be considered with caution.

See Off-Payroll Working: PSCs & Private Sector Engagers

VAT reverse charge on construction and building services

  • The VAT reverse charge on construction and building services came in on 1 March 2021. 

See CIS: Construction Industry reverse charge

The Trust Registration Service

  • The Trust Registration Service will open for all non-taxable trust registrations from the beginning of September 2021. 
    • All UK express trusts, including non-taxable trusts are now required to register with HMRC, unless they are specifically excluded.
    • Non-taxable trusts have approximately 12 months to register from the date the Trust Registration Service is made available to all non-taxable trusts.
  • The previously announced intention to change the ‘claim a trust’ process will not proceed. 
    • It had been intended to remove the requirement for the trust to be claimed by the client to authorise an agent to make changes to the trust details
    • This change is not possible as the ‘claim a trust’ process is a security requirement. 

See Trust Registration Service

Does Inheritance Tax need to be paid on death?

  • A new tool ‘Check if you might need to pay Inheritance Tax’ has been published to allow those dealing with deceased estates to work out the approximate value of the estate to help decide whether any Inheritance Tax (IHT) is likely to be due or not.

See HMRC tool: Check if you might need to pay Inheritance Tax

Impact of Making Tax Digital (MTD) for VAT: independent report published 

  • HMRC commissioned research to gather evidence on the extent to which MTD for VAT is achieving its objectives.
  • The report is now available to read: Impact of Making Tax Digital for VAT

Making Tax Digital for Income Tax Self Assessment (MTD ITSA): Agents can sign-up customers in advance of April 2023

  • The MTD ITSA sign up process will require data to be input for each taxpayer, which could be time-consuming. 
    • A bulk sign-up facility for MTD ITSA will not be possible.
  • Agents will be able to sign up mandated MTD ITSA customers from 6 April 2022.
    • This will not activate MTD obligations but will allow agents to spread the load of sign-up work across a 12-month period.
    • This will only come into effect from 6 April 2022. Any sign-ups made before that date would be for the active pilot.
  • Existing client authorisations can be copied across to an agent's Agent Services Account (ASA). 
    • This would have been done when the ASA was created but can be repeated at any time: this will copy any new authorisations.
    • Copying across the details will improve the authorisation journey for MTD ITSA.

See MTD: Toolkit for accountants

GOV.UK guidance

  • Work is being undertaken to revise content on pages relating to services for agents. This is to clarify that: 
    • There are two accounts for agents (the ASA and HMRC online services for agents account), each allowing agents to manage a different set of taxes on behalf of clients and each with its own process for a client to authorise an agent. 
    • De-authorising an agent in agent services from managing an ITSA account does not automatically also de-authorise them from managing Self Assessment in their legacy account.

Change to Agent designatory details

  • HMRC will shortly be implementing a manual process whereby agents can write to HMRC to have their name, address and email address updated for their ASA.

Agent Talking Points 

  • Agents are invited to send their requests or ideas for Agent Talking Points webinars to HMRC: This email address is being protected from spambots. You need JavaScript enabled to view it.

Tax Agent Toolkits

  • HMRC have 19 agent toolkits available to download and use here.

Manual updates 

Other recent publications

Agent Dedicated Line

  • A trial of the repurposed Agent Dedicated Line (ADL) began on 14 June 2021. Professional Bodies are meeting HMRC in September 2021 to review the performance of the trial.

External link

Agent Update 87

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