HMRC have published their Agent Update for November 2024. We have summarised the key content with links to our detailed guidance on the topics covered, including changes to CIS on traffic management works, updates to the payrolling of benefits, and common errors in claiming double tax relief.
Tell HMRC your Agent Codes
HMRC are asking registered agents to tell them which Agent Codes they are using for Self Assessment, VAT and Corporation Tax. This is to improve the integrity of the information held by HMRC.
- You can find a link to the form to complete with your Agent Codes in HMRC's reminder email that was sent to agents on 20 November 2024.
- HMRC stresses that there is no risk of an Agent Code being cancelled in the absence of a response.
See Confirm HMRC agent codes by 6 December
Construction operations: traffic management
In response to the consultation Construction Industry Scheme (CIS) reform, proposing compliance and simplification changes to the CIS, respondents Raised concerns regarding the scope of the CIS in relation to traffic management works.
- New guidance has now been published. This supersedes previous rulings or clearances provided by HMRC and clarifies the treatment of traffic management works for the CIS.
- From 1 March 2025, the provision of traffic management services will only be within CIS if supplied to a contractor carrying out construction operations, except where it relates to supply only. It is regarded as either preparatory or integral to road works or construction operations and therefore subject to the CIS.
- If you are unaware of this, contact HMRC by email
This email address is being protected from spambots. You need JavaScript enabled to view it. .
See CIS: Contractors and Subcontractors
The Official Rate of Interest from 6 April 2025
The Official Rate of Interest (ORI) is used to calculate the Income Tax charge on the benefit of employment-related loans and the taxable benefit of some employment-related living accommodation.
- It was announced at the 2024 Autumn Budget that the previous public commitment, made in January 2000 to not increase the rate during the tax year, will no longer be applicable.
- As of 6 April 2025, the ORI may increase, decrease, or be maintained throughout the year.
- The rate will continue to be reviewed quarterly. Any changes in the rate will occur following a quarterly review, where appropriate.
- If there are any in-year changes to the rate, these will take effect on 6 July, 6 October and 6 January.
Using the payrolling benefits in kind service for agents
Agents can register employment benefits which will be taxed through their client’s payroll from 6 April 2025 onward, but registration must be done in advance of 6 April 2025.
- The employer client can only begin payrolling at the start of the tax year.
- Benefits that can be payrolled include car and car fuel, mileage allowance and passenger payments, vans, van fuels, private medical treatment or insurance.
- To payroll Benefits In Kind online, you need to opt in to use the Employer Liabilities and Payments service.
- If you have not already done so, you can opt-in by signing in to your HMRC online services for agents account and selecting ‘PAYE for employers’.
- You must still submit P11Ds for tax years 2024-25 and 2025-26 for any benefits and expenses that have not been payrolled.
Confirming plans to mandate the reporting of Benefits In Kind through payroll software from April 2026
At the 2024 Autumn Budget, the government announced some updates to the proposed mandatory reporting of Benefits In Kind (BIK) through payroll software from April 2026. The main adjustments are:
- Mandatory reporting of BIKs in real-time will be introduced in a phased approach from April 2026.
- Employers will be required to payroll most benefits from April 2026, but will not be required to payroll loans and accommodation at that time.
- Employers will be able to report employment-related loans and accommodation through payroll software on a voluntary basis from April 2026.
- A modified P11D and P11D(b) will be available to report just loans and accommodation if employers do not wish to payroll these.
- No decision has been made on when HMRC will mandate the reporting of loans and accommodation through payroll software.
- An end-of-year process will be introduced to amend the taxable values of any BIKs that cannot be determined during the tax year. HMRC expect the taxable values of most BIKs to be reported as accurately as possible during the tax year.
- The requirement to submit P46 (Car) forms will be removed as functionality will be provided to report the data required through payroll software in real-time.
Reporting Rules for Digital Platforms: first reports due 31 January 2025
Since 1 January 2024, digital platform operators in the UK have had to collect and verify information about sellers using their platforms.
- Platform operators are in the scope of the new rules if they provide software that allows sellers to be connected to users for relevant services or the sale of goods.
- Platform operators must report information of sellers who use their digital platform to HMRC. The first reports are due by 31 January 2025 and a copy of the information reported to HMRC must also be provided to the sellers by the same deadline.
Agents for platform operators
- As an agent, if you have any clients that are platform operators and you need to report for them, you must use your own individual or organisation's Government Gateway login credentials. You must not sign in with your agent services credentials, or the credentials of the digital platform you are reporting for.
- Once registered, you can add the details of your clients, and you will be given a unique platform operator ID for each one. This platform operator ID is required to make an XML submission for that platform.
- Visit GOV.UK to find more information about the reporting rules for digital platforms.
Agents for sellers on platforms
- If any of your clients sell goods or services online, they will receive information from platform operators about sales they have made for the previous calendar year.
- For your clients that sell goods, the information will only be shared if they sell 30 or more goods or earn approximately £1700 or more in a calendar year.
- Visit GOV.UK to find more information about selling goods or service on a digital platform.
See Digital Platform Reporting
Individuals who reside both in the UK and other countries: how to avoid errors on SA supplementary pages SA109 boxes 21 and 22
Errors are made by taxpayers and their agents when making claims for tax relief under a Double Taxation Agreement (DTA) between the UK and another country.
- Relief is claimed by using Boxes 20, 21 and 22 of the Residence, remittance basis etc Self Assessment (SA109) form. When filling in the SA109, you should read:
- The SA109 notes.
- Helpsheet HS304 (boxes 20 and 22).
- Helpsheet HS302 (box 21).
- Further guidance on how Double Taxation treaties work.
When completing the ‘Residence in other countries’ section on page RR 2 of the SA109 supplementary pages, remember:
- When claiming relief from UK tax on UK income: where the country the individual lives in has a DTA with the UK, they must obtain a ‘Certificate of Overseas Residence’ from the overseas tax authorities. This should be attached to the return.
- Box 20 should be completed when an individual wants to make a ‘Partial Relief Claim’. This should contain the amount of income to be claimed against under a DTA.
- Box 21 should be completed when an individual wants to claim tax relief under a DTA between the UK and another country. Attach the HS302 Dual Residents claim form to the return.
- Box 22 should be completed when an individual wants to claim tax relief because of other provisions within the relevant DTA. Attach the HS304 claim form to the return.
Guidelines for Compliance: updates
HMRC have recently published a number of updates to their Guidelines for Compliance suite of publications:
- Help to avoid errors in claims for plant and machinery allowances (GfC 5)
- Help with patent box computations (GfC 9)
- Help with the Apprenticeship Levy and Employment Allowance: connected entities (GfC10)
See Patent Box
Completing tax returns for student and postgraduate loan borrowers
Where a taxpayer has an outstanding student or postgraduate loan, ensure that the Pay As You Earn (PAYE) income for each employment is included on their tax return.
- This ensures that charges relating to student or postgraduate loans are correctly calculated based on total income, and that interest is calculated at the correct rate by the Student Loans Company.
- Student and postgraduate loan deductions taken from each employment must also be included in the tax return.
- These amounts will automatically be deducted from the total student or postgraduate loan charge in Self Assessment, as these deductions have already been sent to the Student Loans Company and applied to the loan balance for the relevant tax year.
Basis period reform
- All sole traders and partners must report their business profits on a tax year basis, beginning with the Self Assessment return for 2024-25, due by 31 January 2026.
- HMRC have launched a package of online interactive guidance to support the completion of 2023-24 tax returns and Working out transition profit.
- HMRC have provided an online service to ask HMRC what the Overlap relief figure is according to their records.
- To help deal with demand, HMRC ask that agents aim to use the service for all clients by 31 December 2024.
- If you have applied for this information and have not heard back, you can check the progress of your request.
- To make sure you meet the filing deadline, file with a ‘provisional figure’ for overlap relief and amend it when confirmation is received from HMRC.
See Basis Period reform and Provisional and estimated figures in tax returns
Self Assessment top tips for tax agents
HMRC have shared some tips for tax agents ahead of the Self Assessment (SA) deadline on 31 January 2025.
Registering and reactivating SA
- People who are new to SA must register with HMRC so they can be set up on the system and receive a notice to file.
- For individuals registered for SA but who did not file a tax return last year: make sure their SA account is reactivated (via their online account or by contacting HMRC) before submitting their tax return.
Quickest way to get clients' tax details
- Use the Income Record Viewer to view your client’s PAYE information, employment records, income record, state and private pension information, and latest tax code.
To help speed up repayment requests:
- Check the client’s details (e.g. name, address, bank details etc) are correct and up to date.
- Leave 14 days after making a payment before requesting a repayment.
- For clients who were previously bankrupt, ensure repayment requests are submitted using their post-bankruptcy UTR.
- Notify HMRC of the capacitor if the client died before submitting their tax return and before requesting a repayment.
- Encourage clients to receive their repayment electronically.
Tax returns that include Marriage Allowance must be submitted in the correct sequence to avoid delays:
- The person transferring the allowance (transferor) should submit their tax return first if the person receiving the allowance (recipient) is also in SA.
- The recipient should leave 72 hours after the transferor has submitted their tax return before submitting theirs.
Stopping SA
- If a client needs to stop SA or withdraw their notice to file you should contact HMRC as soon as possible.
Submitting a tax return as an amendment
- It is good practice to submit your client’s tax return as an original, not as an amendment, to avoid delays.
- HMRC receive a high number of tax returns submitted as an amendment using third-party software, but they have not received the original tax return. These tax returns cannot be processed automatically.
Repayments through PAYE
- Check with your client if they received a repayment through PAYE and it’s included in their tax return before you submit a repayment claim through SA.
- If a repayment has already been made through PAYE, the case is flagged on a worklist which means HMRC will have to check the position manually.
Find information online
- HMRC's new agent handbook on GOV.UK can help you find guidance. This includes information on registering as an agent, client authorisations, transacting with HMRC and much more.
Update on Welsh Freeport special tax sites and 5-year extension to tax reliefs
The first Freeport special tax sites in Wales have recently been confirmed at Celtic Freeport and are designated from 26 November 2024.
- In May 2024, legislation was laid to extend the time available to claim Freeport tax reliefs from 5 to 10 years.
- Eligible businesses within a special tax site can claim the available tax reliefs from the date the site is designated until 30 September 2031 in English Freeports, and 30 September 2034 in Scottish Green Freeports and Welsh Freeports.
See Freeports and Investment Zones: Tax breaks
Publication of Tax Administration Framework Review documents
The government has announced the next stages of modernising and reforming HMRC’s tax administration framework.
- A Summary of responses has been published to the spring 2024 call for evidence on HMRC’s enquiry and assessment powers, penalties and safeguards.
- A Consultation on new ways to tackle non-compliance has been released. This considers HMRC’s approach to correcting taxpayer inaccuracies in a claim or return, and whether there are ways this could be improved.
- Further consultations will follow in spring 2025 on:
- Simplifying and improving HMRC’s use of behavioural penalties.
- Improving access to Alternative Dispute Resolution and Statutory Review.
- Modernising HMRC’s approach to acquiring and using third-party data to make it easier for taxpayers to get their tax right the first time.
Raising standards in the tax advice market
In the 2024 Autumn Budget, the government responded to the recent consultation on raising standards in the tax advice market by making four announcements.
- HMRC’s tax adviser registration services will be modernised and registration of tax advisers who interact with HMRC will be mandated, from April 2026.
- Consultation will be undertaken in early 2025 on enhanced powers and sanctions for HMRC to act against tax advisers who facilitate taxpayer non-compliance. Any legislative changes would be introduced from 2026.
- A new requirement will be introduced for tax advisers to obtain an Advanced Electronic Signature from their clients if they wish to continue to use the nomination process for certain Income Tax repayments from 6 April 2025. This will apply to the P87, P40 and Marriage Allowance transfer claim forms.
- The Government will continue to consider options to strengthen the broader regulatory framework in the tax advice market.
MTD for Income Tax event for agents
To help you and your clients prepare for Making Tax Digital (MTD) for Income Tax, HMRC is hosting an MTD for Income Tax event at their Croydon Regional Centre office from 11.00am to 3.00pm on Thursday 5 December 2024.
- The event has limited spaces, so if you have clients who are eligible and ready to join the MTD testing phase, email mailbox
This email address is being protected from spambots. You need JavaScript enabled to view it. no later than 29 November 2024 to secure your place. - HMRC will be hosting more MTD events across the UK from February 2025. Dates and locations will be shared in future Agent Updates.
Spotlight 65: General Data Protection Regulation provision used to reduce tax liability
HMRC is aware of tax agents that target businesses to claim Corporation Tax refunds through incorrect provisions, linked to potential General Data Protection Regulation (GDPR) fines or civil claims.
- Spotlight 65 warns about claims featuring GDPR provisions used to incorrectly reduce Corporation Tax liability, claim repayments of tax already paid, or both.
See Spotlight 65: General Data Protection Regulation (GDPR) provisions
Spotlight 66: Limited Liability Partnerships arrangements used to disguise employment income
Spotlight 66 warns of a tax avoidance scheme called ‘The Partnership Model’ being marketed to avoid payment of tax and National Insurance contributions (NICs).
- The arrangements are targeted at companies that have employees and are designed to avoid the payment of Corporation Tax and the PAYE deduction of Income Tax and National Insurance contributions from their employees.
See Spotlight 66: LLP arrangements used to disguise employment income
UK subsidy reporting arrangements for Climate Change Agreement scheme participants for calendar year 2023
HMRC is required to collect data from Climate Change Agreement (CCA) scheme participants whose annual tax subsidy benefit is above a defined threshold (£100,000 or £86,994 for Northern Ireland).
- In October, HMRC launched a data collection exercise for the 2023 calendar year. UK businesses are now required to report CCA subsidy information to HMRC through an online form on GOV.UK.
- Businesses that receive an annual tax subsidy award exceeding the reporting thresholds for calendar year 2023 must complete the online form available in the Climate Change Levy subsidies guide by 31 January 2025.
Claiming a repayment of import duty and VAT: new digital form (C285)
- From 4 November 2024, traders can use a new digital form to claim a repayment of import duty and VAT for declarations that previously required a print and post form.
- Claims made using the print and post form will not be accepted after 8 January 2025.
Update on the new requirements for safety and security declarations
Following the announcement that safety and security declarations for EU imports will be introduced on 31 January 2025, HMRC have published detailed safety and security guidance with information on the steps businesses can take to prepare on GOV.UK.
- Businesses ready to start submitting declarations for EU imports earlier than 31 January are welcome to do so.
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 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.
Manuals
Check the latest updates to HMRC manuals or subscribe to the automatic notification of changes.
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