Agent Update: July 2023 - www.rossmartin.co.uk

HMRC have issued their Agent Update for July 2023. We have summarised the key content for you with links to our detailed guidance on the topics covered.

Taxpayers given until 5 April 2025 for voluntary National Insurance Contributions

The deadline for eligible taxpayers to fill gaps in their National Insurance records for the tax years 2006 onwards has been extended until 5 April 2025.

Men born after 5 April 1951 and women born after 5 April 1953 have until 5 April 2025 to check their records and decide whether to pay voluntary contributions to make up gaps.

See Pension: Check National Insurance records by 5 April 2025

Payment Protection Insurance (PPI) (R40) claims

HMRC provide the following hints for completing PPI R40 claims, to enable claims to be processed quickly and efficiently.

Ensure you are using the latest form held on GOV.UK.
Do not amend the layout of the R40.
If you are printing off or scanning a document, all boxes including edges and surrounding areas must be clearly legible prior to submission to HMRC.
If your client has named you as a nominee to receive the repayment on their behalf, ensure your business name (in boxes 1.5 and 11.2) is no more than 28 characters in length, including spaces. Names in both fields should be identical and accurately printed.
Ensure all required fields, including monetary fields, are accurately completed. Do not give rounded figures.
Ensure personal details provided are the most up-to-date and full names given.
Check PAYE income details accurately reflect the monies received. Taxpayers can find this information on their P60s, Personal Tax Account or the HMRC app.

See Savings income: How interest is taxed

Completing tax returns early

HMRC are encouraging agents and individuals to submit their tax returns well before the January 2024 deadline, as:

The payment deadline of 31 January remains the same. Tax does not have to be paid early.
Taxpayers will find out what they owe (if anything) in advance, this can aid planning, speed up refunds, or allow for a Budget Payment Plan to be set up.
It might be possible for payments on account to be reduced.
The risk of late filing penalties is reduced.
The tax return provides proof of income which may be needed if applying for a mortgage, loan, or seeking to access certain benefits and schemes such as Tax-Free Childcare

See Calendar of tax deadlines and new tax measures and Time to Pay agreement

Research and Development (R&D) tax relief reform: change of enforcement date for new claim notification and additional information requirements

The new R&D claim notification and additional information requirements will not be enforced until 8 August 2023.

The requirements had originally been due to come into effect on 1 August 2023.

For accounting periods starting on or after 1 April 2023:

Some taxpayers are required to provide a claim notification ahead of a claim for R&D tax relief. Notification must be provided via an online form and submitted no later than six months after the end of the period of account that the claim falls into.
Taxpayers will be able to claim qualifying expenditure on data licences and cloud computing costs.

From 8 August 2023, all companies will be required to submit an additional information online form before their company’s Corporation Tax return containing the claim.

See R&D Tax Relief: Overview

Economic Crime Levy: HMRC Online Service now open for registrations and returns

The June 2023 Agent Update advised that the Economic Crime (Anti-Money Laundering) Levy (ECL) service had opened for ECL registrations. Anti-money laundering regulated businesses can now also submit returns using the ECL Service.

Tax agents cannot register or submit ECL returns for their clients. Affected entities must register and submit returns themselves.
Taxpayers who have already registered for ECL and have not yet submitted their return can now access the service to do so.
Taxpayers who have not yet registered for ECL can still do so by accessing the service and requesting an access code. Once registered, customers will be able to submit their return.
Taxpayers can access the ECL online service via GOV.UK and to complete the registration process will need:
- Information about their UK revenue for the last financial year.
- The date when the organisation started anti-money laundering regulated activities.
- The contact details of a responsible person in their organisation, including name, role, email address, telephone number and the business sector the organisation operates in.
An ECL registration number will be issued after registering.
Affected taxpayers will only need to register for the ECL once but will need to submit an online return and pay the ECL every year that their UK revenue exceeds the threshold.
- To pay ECL to HMRC, taxpayers will first need to register before declaring and paying their liability.
- The HMRC online service will be updated in the coming months so that taxpayers can make their ECL payment.

See Economic Crime Levy

Overlap relief: preparing for the new tax year basis

This summer, HMRC is planning to launch an online form for submitting requests for details about overlap relief.

Taxpayers with an accounting date other than 31 March or 5 April who are affected by the move to the new tax year basis may need to find out the details of their overlap relief ahead of submitting 2023-24 returns.
Overlap relief information can only be provided if these figures are recorded in HMRC systems. This is taken from information submitted as part of previous tax returns.
If you want to submit a request for information ahead of the launch of the online form, HMRC asks that you provide as much of the following information as possible:
- Taxpayer name.
- National Insurance Number or Unique Taxpayer Reference (UTR).
- Either name or description of business, or both.
- Whether the business is a sole trader or part of a partnership.
- If the business is part of a partnership, the partnership’s UTR.
- Date of commencement of the self-employed business, or date of commencement as a partner in a partnership (if not known, then the tax year of commencement).
- The most recent period end date up to which the business used to report its profit or loss.

See Basis Period Reform

Self-Serve Time to Pay for VAT taxpayers

HMRC is providing a new service to help make it easier for VAT taxpayers to pay what they owe.

Where taxpayers are unable to pay their VAT in full, HMRC may be able to set up a Time To Pay (TTP) arrangement.
From 30 May, taxpayers who meet certain eligibility criteria have been able to set up a Time to Pay for VAT online, without needing to call HMRC. They must:
- Be a VAT customer.
- Have VAT debt which is less than 28 days old from the payment due date.
- Have VAT debt which is less than £20,000 in value.
- Not have any other debts or TTP payment plans.
- Be up to date with all tax returns.
- Be authorised to set up a direct debit mandate.

See Time To Pay agreement

Digital signatures

HMRC has issued guidance for taxpayers ‘Keeping your pay and tax record’.

Records can be kept in a variety of formats: on paper, digitally or as part of a software program. There are some records that, by law, must be kept and preserved in their original form. For example, a C79 import VAT certificate.
- The Taxes Management Act 1970 s.12B and the Finance Act 1998 Sch 18, para 22 provide further detailed information on record keeping including those records that must be preserved in their original form.
Regarding electronic signatures, HMRC issued guidance in Agent Update 82, Feb 2021 confirming that they will accept digital or electronic signatures on 64-8s, P87 and Marriage Allowance claims.
- For these forms signatures signed on the screen of a digital device or displayed in a keyboard-typed font will be accepted.
- All other claims and paper tax returns require a handwritten signature rather than an electronic one.
Subject to exceptions, HMRC accepts digital records including scanned copies of documents with handwritten signatures.
- Exceptions include those set out in tax or other legislation and instances where the taxpayer is submitting a paper version of a tax return or claim.

Update on UK implementation of global tax reform

HMRC have contacted groups with a UK presence who may be in the scope of Pillar 2 and have provided key information about the new international tax framework and where they can find further guidance.

HMRC have also set up a new Pillar 2 Compliance Team. The team will work with advisers, to help understand any problems groups may have, and what action we can take to overcome them.
- You can contact the Pillar 2 Compliance Team at This email address is being protected from spambots. You need JavaScript enabled to view it..
- If you represent a group that is in the scope of Pillar 2 and have not received a letter, or you would like to subscribe to HMRC's Pillar 2 updates, please contact your Customer Compliance Manager, if you have one, or email the mailbox.
HMRC have published draft technical guidance on multinational top-up tax and Domestic top-up tax, following their introduction in the Finance Bill 2022-23.
- This guidance provides additional information on which groups will be in scope, and how the taxes will be administered and charged. 
- Stakeholder comments are encouraged and can be provided by emailing This email address is being protected from spambots. You need JavaScript enabled to view it. and including 'HMRC guidance manual' in the subject line. The consultation closes on 12 September 2023.

See BEPS & Diverted Profits Tax (for SME owners)

Tobacco Track & Trace Sanctions

HMRC have introduced new regulations which provide for stronger penalties and other sanctions for businesses or individuals who deal with illicit tobacco and contravene the requirements of the Tobacco Products (Traceability and Security Features) Regulations 2019.

From 20 July 2023, failure to comply with the requirements of the Tobacco Track and Trace (TT&T) regulations in the UK may result in the issue of financial penalties, seizure of certain tobacco products found at non-compliant premises and the exclusion of retailers from the TT&T registration system.

Alcohol Duty: new rates and reliefs, changes from 1 August 2023

At Spring Budget 2023 the Chancellor confirmed changes to the structure of the alcohol duty system, creating standardised tax bands for all alcoholic products based on their alcohol by volume (ABV).

The changes to the Alcohol Duty structure, the new duty rates, and reliefs take effect from 1 August 2023. These will include:
- A Small Producer Relief: this reforms and extends the relief currently enjoyed by small breweries, to producers of all alcoholic products under 8.5% ABV.
- A reduced rate for draught products, also known as Draught Relief: this reduces the duty owed on draught alcoholic products which are under 8.5% ABV, packaged in containers of at least 20 litres and designed to connect to a qualifying dispense system.
- Transitional arrangements for producers and importers of some wine products: these will help with moving to the new method of calculating the duty on products and will be in place for 18 months, from 1 August 2023 until 1 February 2025. This will allow businesses to use an ‘assumed strength’ of 12.5% when calculating the duty owed on wines between 11.5% and 14.5% ABV.

UK Internal Market Scheme (UKIMS)

From 30‌‌‌ ‌‌September 2023, a new UK Internal Market Scheme will launch to replace the existing UK Trader Scheme.

Earlier this year, the government and the EU agreed on the Windsor Framework. The agreement establishes a new scheme, the UK Internal Market Scheme (UKIMS), for the movement of ‘not at risk’ goods into Northern Ireland.
The scheme is now open for registration and will replace the UK Trader Scheme (UKTS) from 30‌‌‌ ‌‌September 2023.
The UK Internal Market Scheme will continue to enable registered traders to move goods in line with existing ‘not at risk’ arrangements. From October‌‌‌ ‌‌2024 it will also ensure that ‘not at risk’ movements are also freed of unnecessary paperwork, checks and duties. Only existing commercial information will be needed.

Developing Countries Trading Scheme (DCTS)

The Developing Countries Trading Scheme (DCTS) came into force on 19 June 2023, replacing the UK Generalised Scheme of Preferences (UK GSP).

There is a grace period allowing the use of UK GSP documents to claim preference in some instances on or before 31 December 2023.
Read more information about DCTS.

HMRC manuals

HMRC have 90,000 pages of content in their manuals collection on GOV.UK.

Users of the manuals can leave feedback to help to manage, maintain and improve them.
- In 2022-23 HMRC received 1,825 items of feedback and made 563 improvements to the manuals based on those feedback items.
Feedback can be given in a number of ways:
- By clicking either ‘Yes’ or ‘No’ to the question ‘Is this page useful?’ on each manual page.
- By 'Report[ing] a problem with this page’
- By using the ‘contact’ link at the very bottom of any page.

Customs: calls for evidence

Following the customs measures package announced at Spring Budget 2023, HMRC has launched two calls for evidence:

Tax agent toolkits

HMRC have many Tax agent toolkits available for you to download and use that address the most common errors seen in 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: