HMRC have issued their Agent Update for September 2023. We have summarised the key content for you with links to our detailed guidance on the topics covered.
Helping customers spot and get out of tax avoidance
- Agents are encouraged to review and share HMRC's published guidance on tax avoidance with their clients in order to protect them from such schemes:
- See: Tax avoidance schemes
Updated 2022 to 2023 Self Assessment exclusions and special cases documents for individuals
- The Self Assessment Exclusions and Special Cases documents, which set out whether Self Assessment customers should file a paper tax return rather than an online one, have been updated.
- Agents may find them useful when dealing with clients with complex tax affairs.
Just 15 days left to register for Self Assessment
- The deadline for registering for self-assesment is 5 October 2023.
- See Do I have to file a tax return? & Notify HMRC of chargeability
How to reduce Self Assessment repayment delays
- 90% of self-assessment repayments are processed automatically without delay.
- The remainder leave the automated system and take longer to process. The following HMRC advice is intended to reduce delays:
- Do not send in voluntary returns: register your client for self-assessment and await the notice to file a return before submitting the return.
- Uncleared credit: do not submit a repayment claim within 14 days of making a payment.
- Ensure your client’s address is up to date: clients with correspondence returned to the HMRC return letter service will encounter further checks.
- Bank sort code and account number: check these are accurate before submitting a repayment claim.
- Deceased clients: ensure any capacitor is notified to HMRC before submitting a return on which a repayment is requested.
- Previously bankrupt clients: ensure the repayment request details are submitted using the post-bankruptcy Unique Taxpayer Reference (UTR).
- Payable orders: encourage clients to receive their repayment electronically.
Income Tax Self Assessment Returns — new information required on disposals of Excluded Indexed Securities
- The Self Assessment tax return for 2022-23 includes a box for declaring gains on Excluded Indexed Securities (EIS). The amount to be included is the total gains before any losses or reliefs.
- Most software has been updated for this new requirement.
- It may be that some taxpayers are unable to obtain this information from their financial provider but they are expected to take all reasonable steps to do so.
- Where complete information cannot be obtained, the return should be completed on the most appropriate basis and contain information about uncertain areas in the white space.
- If the information becomes available whilst the return is still within the amendment window, an amended return should be submitted.
- See: Provisional and estimated figures in returns
Online tool for companies to calculate balancing charges for disposal of super-deduction or 50% special rate plant and machinery
- HMRC have launched a tool to help calculate balancing charges where a company has claimed either the super-deduction or the 50% special rate first-year allowance.
- The allowances were available for expenditure incurred between 1 April 20221 and 31 March 2023.
- See: Super-deduction & First Year Allowances
Updates to patent box guidance (CIRD200000 onwards)
- As part of the Finance Act 2016, the Patent Box rules were amended.
- In certain circumstances, the old rules were to be followed during the transitional period.
- The transitional period ended on 30 June 2021 and returns could be amended within a two-year window up until 30 June 2023.
- As this period has now passed, all references to the old rules have been removed from Patent Box guidance.
- See: Patent Box
Alcohol Duty: apply the new duty rates and check the two new reliefs before submitting a return this month
From 1 August 2023:
- There is a simplified Alcohol Duty system with standardised bands based on alcohol by volume (ABV).
- The introduction of Small Producer's Relief, which extends the Small Brewers relief to all producers of alcohol under 8.5% ABV.
- A new Draught Relief, with a reduced rate for draught products under 8.5% ABV, where sold in volumes greater than 20l and intended for a qualifying dispense system.
- Transitional rules for wine products, allowing an assumed strength of 12.5% ABV for all products between 11.5% and 14.5%. This will be in place for 18 months until 1 February 2025.
- See: Small Brewer's Relief
Coming Soon: tax agent toolkit for the assurance of remittances to be reported on tax returns
- A new toolkit is being launched by HMRC in October 2023 to assist agents in ensuring their non-domiciled clients have reported all taxable remittances on their returns.
- The toolkit has been shared with representative bodies and feedback is being considered.
- Notification of the publication is being given to encourage taxpayers to consider whether they need specific tax advice for tax year 2022-23.
- Areas causing issues include:
- Agents not having all the relevant information.
- Incomplete record keeping, including not being able to identify the source of funds in bank accounts or used to buy assets.
- Interaction with anti-avoidance legislation; settlements, transfer of assets abroad and capital gains.
- Remittances by other relevant persons or via offshore structures.
- Relevant debts and loan collateral.
- Use of credit cards.
- Remittances of gifts by third parties.
- See: Remittance Basis (overseas income)
Capital Gains Tax on UK property paper return
- As of 30 September 2023, the trial for downloading the paper version of the CGT return for property came to an end.
- The downloadable form will remain available as HMRC digest the results of the trial.
- The downloadable version is not to replace the online UK property account for CGT and should only be used by certain taxpayers who cannot use the online service.
- See: At a glance: Reporting CGT when & how?
Research and Development tax relief: remember your additional information and claim notification forms
- As of 8 August 2023, all Research & Development claims submitted, needed to be accompanied by an Additional Information Form.
- In addition, some claimants, as of 1 April 2023, also need to notify HMRC in advance that they will be making a claim.
- For the period 8 August to 3 September 2023, HMRC found that almost half of all claims submitted in that time did not have the required Additional Information Form and so were invalid.
- See: Research & Development Tax Reliefs
Determining UK establishment
- There has been an increase in the use of high-volume addresses as principal places of business for VAT purposes.
- Many are being used by overseas businesses and may be being used by some to avoid being classified as a Non-Established Taxable Person (NETP) in relation to online marketplaces.
- Since January 2021, when a NETP makes a sale on an online marketplace, it is the responsibility of the marketplace to account for the VAT on the sale.
- By claiming to have a UK place of business, some traders are avoiding having the VAT accounted for on their behalf.
- HMRC are now writing to businesses using these addresses and asking them to prove that they have a genuine UK establishment. Only those who have such an establishment need reply, providing the required evidence.
- Anyone who does not reply will be deemed to be a NETP by HMRC.
- Businesses wishing to communicate with HMRC via an agent will need to ensure that there is a valid 64-8 in place.
- See: Online Marketplaces: Selling goods in the UK
Economic Crime Levy for anti-money laundering regulated businesses, HMRC online service now open for registrations
- The Economic Crime Levy (ECL) online service is now open for businesses whose collection authority is HMRC.
- The ECL requires initial registration and then annual submission of the return and payment (if over the required threshold), which is required by 30 September following the tax year. The 30 September deadline for 2022-23 is approaching.
- All of this must be completed by the business and an agent cannot be used.
- If the return and payment is not submitted on time, penalties may be due.
- See: Economic Crime Levy
Overlap Relief: preparing for the new tax year basis
- HMRC launched an online form allowing taxpayers to request their overlap relief details.
- The Overlap Relief figure is required for the transitional year 2023-24 before the Tax Year Basis changes in 2024-25.
- The form requires the following information:
- Customer name.
- Unique Taxpayer Reference (UTR) or National Insurance number.
- 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.
- Year or years the accounting period changed (if applicable).
- See: Basis Period Reform
Plastic Packaging Tax: mass balance approach consultation
- The consultation closes on 10 October 2023.
- On 18 July 2023, a 12-week consultation was launched with a view to allowing a mass balance approach to calculating the recycled plastic percentage in plastic packaging. The consultation closes on 10 October 2023.
- See: Plastic Packaging Tax
The Administrative Burden Advisory Board (ABAB) Tell ABAB report 2023
- The ABAB have published their 2023 report.
- It details the 7,500 responses to their Tell ABAB Survey, which looks at the needs and experiences of small businesses.
- If you wish to comment or help the ABAB, email:
- See: ABAB 'disappointed' by quarterly digital reporting
Self Assessment student loan deductions and payrolled Benefits In Kind
- HMRC has identified that a small number of student loan borrowers have been overcharged student loan repayments on their Self Assessment tax return.
- This is because the Self Assessment system has included payrolled benefits in kind, when it should not have done, resulting in a higher charge.
- This only impacts customers who are:
- repaying a student loan and
- receiving payrolled benefits in kind that are not subject to Class 1 National Insurance contributions (NICs) through their employer and
- are in Self Assessment.
- HMRC apologise for the error and the amount that has been overcharged has been sent to the student loan company and offset against the student loan, reducing the balance and any interest that may be due.
- HMRC are writing to those affected offering the offset or a refund if they so wish. They are also working to fix the system issue.
- See: Student Loans
VAT registration is quicker, easier and more secure through the VAT Registration Service
- From November 2023, agents should apply to register for VAT through our online VAT Registration Service (VRS). Over 95% of customers already use this service.
- Agents should continue to use VRS through the Agent Services Account and to avoid unnecessary delays, ensure they have relevant client details ready and input them correctly.
- Some businesses will still need to apply via the VAT1 Form if exempt from Making Tax Digital or have a specific type of registration.
- See: Registering for VAT and Making Tax Digital for VAT
Customs Declaration Service: announcement of phased approach for exports
- The move to the Customs Declaration Service (CDS) for exports will be staged.
- Some businesses will be able to start using the CDS from Thursday 30 November 2023. HMRC or the software developer will contact businesses if this is an option.
- All other export declarations should be made using the CDS by Saturday 30 March 2024.
Just 10 days to go until the UK Trader Scheme closes
- From 30 September 2023, the UK Trader Scheme (UKTS) will be replaced by the UK Internal Maket Scheme (UKIMS).
- UKIMS must be used to move 'not at risk' goods into Northern Ireland.
- Businesses authorised under the UKTS are encouraged to transfer onto the new UK Internal Market Scheme.
- The benefits were explained in Agent Update 110.
Making Tax Digital
Making Tax Digital for Income Tax Self Assessment: overview and how to keep up to date
- Making Tax Digital for Income Tax Self Assessment will be introduced for self-employed individuals and landlords as follows:
- Those with an income of more than £50,000 need to make the change by April 2026.
- Those with an income of £30,000 to £50,000 need to make the change by April 2027.
- The small business review for those with income of less than this will report back soon.
- Agents can get updates through these updates, HMRC's email service and webinars.
HMRC agent services
Changes to the agent-dedicated line
- Following consultation on the performance and service provided by the Agent Dedicated Line (ADL), the following changes will have effect from 2 October 2023:
- The 10-minute service level will no longer apply, waiting times will depend on the number of callers at any one time.
- Waiting times will provided on each call, allowing the caller to choose whether to call-back or use a digital option.
- PAYE callers may be rerouted to dedicated PAYE advisers.
- In addition, HMRC is looking at introducing a webchat facility, further changes to the ADL to improve efficiency and improvements to the agents' digital services.
Changes to our probate phone line
- From 2 October 2023, HMRC will no longer provide a dedicated probate phone line.
- Customer probate queries should be directed to HM Courts and Tribunals Service (HMCTS).
- Customer inheritance tax queries should be directed to HMRC.
Pay by bank account: enhancement
- We have made improvements to the ‘Pay by Bank Account’ service so HMRC customers will have the option of making an immediate payment or scheduling it for a future date when paying their tax.
- A future-dated payment cannot be set up beyond the due date of the tax owed.
- This service will only be available to customers who are logged in to their HMRC online account through the Government Gateway.
- The feature is live for VAT, Employers' VAT, PAYE Settlement Agreement, PAYE late penalty or filing penalty and Class 1A NICS.
- The service will be available soon for Capital Gains Tax, Self Assessment, Simple Assessment, Corporation Tax, VAT One Stop Shop, Soft Drinks Industry Levy and Plastic Packaging Tax.
Art market participants' online learning guide
HMRC has launched an online learning guide for art market participants on GOV.UK to help businesses find out about:
- Money laundering regulations.
- Risks and how to deal with them.
- Your responsibilities.
- Customer due diligence.
- Identifying and reporting suspicious activity.
- Training staff.
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.
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 you as an agent to use HMRC Online Services.
- Process an application for authority to act on behalf of a client.
Check the latest updates to HMRC manuals or subscribe to the automatic notification of changes.
Countdown Bulletin 56 is the latest bulletin in this collection.
Agent forum and engagement
Changes to the agent-dedicated line
Changes to our probate phone line
Pay by bank account - enhancement
Art market participants' online learning guide
Agent online forum
Issues Overview Group (IOG)
The IOG met on 23 August to discuss common escalations from the agent online forum where further clarification was needed:
- MTDVAT - 36306 - new registration not signed up for Maing Tax Digital
- MTDVAT - 37400 - central assessment not overwritten by submitted return
- CT-35754 - Corporation Tax amendments for long accounting periods