Agent Update: June 2022

HMRC have issued their Agent Update for June 2022. We have summarised the key content for you with links to our detailed guidance on the topics covered. 

Technical updates and reminders

Plastic Packaging Tax (PPT)

• PPT commenced on 1 April 2022 and may be payable by those who manufacture or import plastic packaging into the UK.
• Businesses who are required to register must submit their PPT return from 1 July 2022 and pay any tax due by 29 July 2022.

See Plastic Packaging Tax (subscriber guide)

Non-UK resident companies receiving UK property income

• From 6 April 2020, non-resident companies receiving UK rental income are subject to Corporation Tax and need to file tax returns and tagged financial statements.
• HMRC guidance covering this, as well as Non-UK resident companies who develop property or land in the UK (without a UK Permanent Establishment).

See Non-resident Landlord Scheme 

See HMRC guidance on how to format the accounts which should accompany an online Corporation Tax Return here.

Increases in National Insurance Thresholds

• National Insurance thresholds are increasing for the 2022-23 tax year. 
• Note that these threshold changes for employees are taking effect from 6 July 2022.
• Payroll software should be checked and updated to ensure that this change is correctly reflected.

See National Insurance: Rates

Changes to Corporation Tax letters

From June 2022, HMRC’s Corporation Tax letters are changing.

• They will cease to contain a payslip. Taxpayers will be asked to make Corporation Tax payments using electronic methods.
• HMRC guidance covering payment can be found here.

Domestic reverse charge: Sales reporting

• From 1 July 2022, businesses that apply the domestic reverse to UK sales of mobile phones and computer chips no longer need to include such sales on their reverse charge sales list.

See Reverse charge: Cross-border services and Reverse charge: Domestic

Residency and the remittance basis charge

• From June 2022, HMRC will write to taxpayers who have been UK tax resident for seven of the last nine years and 12 of the last 14 years, explaining that they will need to pay the Remittance Basis Charge or be taxed on the arising basis going forward.

See our useful guides on this topic:

• Non-domicile status, deemed domicile & tax
• Remittance basis (overseas income)
• SRT: Statutory Residence Test
• SRT: Statutory Residence Test Toolkit

Construction Industry Scheme (CIS) and property investment companies

• HMRC flag that they are seeing a number of property investment companies undertaking substantial redevelopments which can make them a property developer or a ‘deemed contractor’ for the purposes of the Construction Industry Scheme.
• Where a business is acting as a sub-contractor CIS will need to be considered and complied with.
• Failing to do so could result in additional liabilities which cannot be reclaimed from the subcontractor.

See CIS: Contractors and Subcontractors

Amendments to Corporate Interest Restriction: working group

• The Corporate Interest Restriction legislation can restrict the available tax deduction for interest paid where it exceeds £2 million within a company or group.
• A working group has been set up to discuss technical issues with the legislation.

See Corporate Interest Restriction

Making Tax Digital (MTD)

MTD for VAT signup

• HMRC remind everyone that all VAT-registered businesses should now be using MTD-compatible software and submitting returns to HMRC.

See Making Tax Digital: VAT (subscriber guide)

Changes to VAT penalties

• From 1 January 2023 late payment and filing penalties will be introduced for all businesses.
• HMRC guidance will be published in December 2022.

See Penalties: Late Filing MTD

MTD for Income Tax 

• MTD for Income Tax will affect the self-employed and property businesses with an annual income above £10,000.
• HMRC is expanding its MTD for Income Tax pilot from July 2022.

See MTD: Income Tax Pilot Tool

Trust Registration Service (TRS)

• HMRC is reminding taxpayers that the deadline for registering most trusts on the TRS is 1 September 2022. This includes the registration of non-taxable trusts which were in existence on 6 October 2020 but have since been closed.
• Non-taxable trusts created after 6 October 2020 must be registered within 90 days of creation or 1 September 2022 if later.

See Trust Registration Service

P11D and P11D(b)

• P11D forms are due by 6 July. Any Class 1 A National Insurance is due by 22 July.

See P11D: Reporting benefits and expenses

External Links

Agent Update: issue 97