HMRC have issued their Agent Update for February 2023. We have summarised the key content for you with links to our detailed guidance on the topics covered.
Find out about the Income Record Viewer
- The Income Record Viewer allows agents to view PAYE, employment, income, pensions and tac code information for their clients.
- Agents can get access here.
Budget payment plan for Self Assessment customers
- Taxpayers whose Self-Assessment returns and payments are up to date can budget for their annual tax liability by paying in advance in instalments.
- Advance payments can be weekly or monthly and they can be changed or cancelled as required. Payments on Account will be reduced as a consequence.
- The direct debit can be set up through the HMRC Online Account and the Pay Weekly or Monthly page contains more details.
Businesses urged to disclose till misuse
- Businesses are being urged to make use of the Voluntary Disclosure facility where an Electronic Sales Suppression system has been used.
- HMRC has a list of businesses they believe have made use of such a system and are encouraging disclosure before 9 April.
- Voluntary disclosure can mitigate penalties, which can be up to £50,000. The usual penalties for non-payment of tax and interest will also be due.
See: Penalties: Electronic Sales Suppression
End-of-year reporting for employers
- See February's Employer Bulletin for details for 2022/23
Submitting your client’s 2023 to 2024 Annual Tax on Enveloped Dwellings (ATED) return
- For companies owning UK residential property valued in excess of £500,000, the Annual Tax on Enveloped Dwellings (ATED) return and a charge will be due on 30 April 2023 for the Financial Year 2023/2024.
- Contact HMRC if there have been any changes, for example, a disposal or relief change.
- The ATED Online Service should be used.
- The property revaluation as at 1 April 2022 should be used for the 2023/24 return and charge.
- The revaluation can be professionally made or self-assessed. If there is uncertainty, a pre-return banding check (PRBC) can be submitted.
See: Annual Tax on Enveloped Dwellings (ATED)
Preparing for the new tax year basis, Income Tax Self Assessment (ITSA)
- The Basis Period reform takes effect from tax year 2023/24 with a transitional year from Current Year Basis to Tax Year Basis.
- Any business will be able to make use of any Overlap Profits carried forward in 2023/24.
- See: Basis Period Reform
Alcohol Duty review: Share your views on the proposed secondary legislation by 9 April 2023
- Stakeholders are being asked to submit their views on the secondary legislation arising from the Alcohol Duty review.
- The legislation will come into effect on 1 August 2023.
- See: Alcoholic Products (Excise Duty) Regulations consultation page
Short-term property letting income: getting tax right
- HMRC is writing to people who may have earned income from short-term lettings, such as Airbnbs.
- HMRC is recommending that people use the Voluntary Disclosure service in case they have tax to pay.
- There may also be allowances available to absorb some of the profits.
See: Adviser's Guide: Property business, profits and losses
Student Loans thresholds, rates and loan start notices
The student loan plan and postgraduate loan thresholds from 6 April 2023 are:
Student plans:
- plan 1: £22,015
- plan 2: £27,295
- plan 4: £27,660
The deductions remain at 9% for earnings over the threshold.
- postgraduate loan: £21,000
The deductions remain at 6% for earnings over the threshold.
Employers receiving a loan start notice (SL1 or PGL1) must check and use the correct loan or plan type and start date as shown on the notice. This will ensure the employee pays the correct amount.
If the employees' earnings are below the relevant threshold, employers should update their payroll record to show there is a loan and file a start notice.
See: Students: Top tax FAQs for students
Venture Capital Schemes: new online service for submitting compliance statements for SEIS and EIS schemes
- Since 31 January 2023, there is a new online service for submitting EIS and SEIS compliance statements.
- Where new shares are issued for EIS or SEIS, there are now online forms.
- HMRC guidance has been updated for the new EIS and SEIS processes
See: SEIS & EIS: Investor relief briefing
Research and Development (R&D) tax reliefs: merger consultation, draft guidance
- A consultation has been launched into a single R&D tax relief scheme based on the RDEC, which will replace the separate RDEC and SME tax credit schemes.
- The consultation is open until 13 March. See: Consultation on R&D Tax Reliefs as a single scheme
- These proposals do not affect the reforms that come into force on 1 April 2023. The draft legislation for which is still open for comments until 28 February 2023. See: R&D Tax Relief reform.
Economic Crime Levy for anti-money laundering regulated businesses
- HMRC will publish guidance on the Economic Crime Levy in February 2023.
- A link will be provided in the next Agent Update.
The second-hand motor vehicle payment scheme
- From 1 May 2023, a new VAT scheme will be introduced in relation to the Second-hand Motor Vehicle Export Refund Scheme.
- Currently, if a second-hand vehicle is moved from Great Britain to Northern Ireland for resale, the business can account for VAT on the difference between the purchase and sales prices (the margin).
- Under the new scheme, a VAT-related payment can be claimed on the moving of the vehicle for resale and VAT will be chargeable on the sales when sold. The VAT margin scheme will no longer be available.
- See the HMRC guidance.
Update on UK implementation of global tax reform
- The OECD's Pillars 1 and 2 will bring about global tax reform.
- The OECD has recently consulted on Pillar 1 which will ensure fairer allocation of MNC profits across the territories it operates in. The UK will need to implement the agreement that is reached.
- Pillar 2 is the implementation of a minimum corporate tax rate. The UK has confirmed they will implement these rules for UK headquartered groups that pay less than an effective 15% tax rate in overseas territories.
- The UK backstop is the Undertaxed Profits rule (UTPR) will have effect no earlier than accounting periods beginning on or after 31 December 2024.
See: UK delays global minimum tax rate
Plastic Packaging Tax (PPT) - check if your clients need to register
- PPT was introduced on 1 April 2022, for persons manufacturing or importing 10 or more tonnes of plastic packaging in a 12-month period.
- HMRC have recently announced that they will no longer be introducing the need to show the PPT charge on an invoice as a legal requirement.
Tax Avoidance Spotlights
- Spotlight 61 covers three cases arising from a failed remuneration trust tax avoidance scheme.
- Spotlight 58 has been updated following a GAAR Advisory Panel opinion on unfunded pension arrangements.
Making Tax Digital
Some of the services that are or are not available through the Agent Services Account were incorrectly listed in the December 2022 Agent Update. See HMRC Services for tax agents for more information.
HMRC Agent Services
How to update your designatory details with HMRC
Agents with:
- An agent services account
- A self-assessment agent code
- A Corporation Tax agent code
should inform the HMRC Agent Maintainer Team of the changes in writing at: Agent Compliance Team, HM Revenue & Customs, BX9 1ZE. You should also write to this team if you cease to be an agent.
Those with PAYE agent codes should call the Online Services Helpdesk on 0300 200 3600 and then also send your PAYE client list to the Central Agent Authorisation Team at: National Insurance Contributions and Employer Office, HM Revenue and Customs, BX9 1AN
Updating your client’s designatory details
- Self Assessment: use Self Assessment for Agents online service.
- PAYE: use the Employer's Helpline on 0300 200 3200.
- Corporation Tax: updates flow automatically from Companies House. Otherwise, changes should be made in writing to: CT Services, HM Revenue & Customs, BX9 1AX, UK
- VAT: use the Agent Services Account or for name changes use form VAT 484.
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Business advisers: help your employer clients stay on top of their workplace pensions duties
- Workplace pensions webinar for advisers on 14 March 2023. Book here.
Support for customers who need extra help
Following the principles of support for customers who need extra support, you can find out how to get extra if here.
Tax agent toolkits
HMRC have many tax agent toolkits available for you to download and use designed to address the most common errors seen from previous years.
Contact
Complain about HMRC: To make a complaint to HMRC on behalf of your client you must be appointed as their tax advisor.
Where’s My Reply? for tax agents: Find out when you can expect to get a reply from HMRC to a query or request you have made. There is also a dedicated service for tax agents to:
- Register as an agent to use HMRC Online Services.
- Process an application for authority to act on behalf of a client.
Manuals
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Online
Online training material and useful resources for tax agents and advisers
HMRC Publications
Agent Online Forum (AOF)
- The agent forum enables agents to raise general queries about HMRC systems or processes impacting day-to-day practice, including matters escalated by the Issues Overview Group.
- Agents can join the agent forum by registering and providing their professional body membership reference.
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