Agent Update
Agents and HMRC working together February - March 2017 - Issue 58
Welcome
Tax
HMRC service
Keeping you informed
Introduction
Welcome to Agent Update 58. In this edition you can read about the new National
Minimum Wage and National Living Wage rates that are introduced from 1 April,
and the latest update from The Pensions Regulator. Following their successful Talking
Points meeting my colleagues from Companies House have written an article on what
you can do to avoid Companies House rejecting your accounts.
The Working Together section includes updates on your issues and the Top 5 Agent
Account Manager issues raised in January. In a comprehensive Talking Points article
you can find out what is planned for February and March and how to take part.
If you would like an email reminder when Agent Update is published, use the link
below.
Consultations
Working Together
Tax
Developments and changes to legislation and allowances relating to UK tax.
HMRC service
Changes to HMRC service, upcoming HMRC events and guidance.
Consultations
Details of live consultations and response summaries.
Working Together
Latest updates from the partnership between HMRC and the six main agent
representative bodies.
This month’s top articles
Sign up to receive email reminders of future issues of Agent Update.
Research and Development
If you have any comments about Agent Update please contact the editor Peter Smith.
Read about the YouTube videos HMRC have produced to help you help your clients.
Apprenticeship Levy
Make sure your clients are ready for reporting the Apprenticeship Levy.
Construction Industry Scheme (CIS) Subcontractor Verifications
Read about the changes taking place from April 2017.
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page 1 of 21
Agent Update
Agents and HMRC working together February - March 2017 - Issue 58
Welcome
Tax
HMRC service
Annual Tax on Enveloped Dwellings (ATED):
Register for the new digital service
HMRC has been designing a new digital service for the ATED. Agents and their
clients can now register to use this new service. This will give time to complete the
registration steps in readiness for the April 2017 filing period.
Capital Gains Tax (CGT)
Non-resident Capital Gain Tax (NRCGT) Returns
A non-resident that disposes of a UK residential property is normally required to
deliver to HMRC an NRCGT return in relation to the disposal within 30 days of the
disposal being completed. This includes where there is no tax to pay or the disposal is
for a loss. Penalties can apply where a return is delivered late.
Finance Act 2016 provided, retrospectively to the beginning of NRCGT in April 2015,
two circumstances when an NRCGT return need not be delivered. One of those
is where the disposal is covered by the CGT ‘no gain/no loss provisions’, such as a
disposal to a spouse. HMRC is seeing many cases where it is mistakenly claimed that
this provision applies in any case where the computation results in either no gain or
a loss, such as a result of market values or allowable deductions. This is not the case
and care should be taken to ensure that returns are delivered on time.
Consultations
Working Together
Compliance
Extending the existing offshore penalty regime to include
Inheritance Tax (IHT)
HMRC is reviewing and updating penalty raising and collection systems in order
to extend, update and complement the existing penalty regime for non-compliance
which involves an offshore matter.
This includes:
•extending the existing offshore penalty regime to include IHT
•the introduction of a new penalty under Sch21 FA2015 known as the “Offshore
Asset Moves” penalty.
For IHT these will legally apply to chargeable occasions arising on or after
1 April 2016.
Working to tackle tax avoidance
HMRC endeavours at all times to treat all customers fairly and even-handedly.
Find out about HMRC’s approach to tackling tax avoidance, how to report a tax
avoidance scheme and other relevant information.
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For more information about NRCGT, please visit the GOV.UK pages:
Capital Gains Tax for non-residents: UK residential property
Pay Capital Gains Tax for non-residents
Capital Gains Tax for non-residents: calculate a taxable gain or loss
Non-resident: Report and pay Capital Gains Tax on UK residential property.
page 2 of 21
Agent Update
Agents and HMRC working together February - March 2017 - Issue 58
Welcome
Tax
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Consultations
Working Together
Construction Industry Scheme (CIS) Subcontractor
Verifications
Corporation Tax
What is changing?
Last year Companies House received over 2.7 million sets of accounts, around
88 thousand of which were rejected. The top four reasons Companies House
reject accounts:
From April 2017 HMRC will no longer accept any telephone calls to verify
subcontractors.
This change is one of a series of improvements we have made to CIS to increase
efficiency and accuracy, and to reduce administration. These have also included the
ability to amend returns online, and the addition of an online message/alert service.
If you are having issues with verifications please visit our service availability and
issues page for some useful advice.
If you are an agent and want to verify subcontractors for CIS or receive information
on PAYE from HMRC on behalf of your clients, you’ll need to be authorised.
Read Agent authorisation: apply using HMRC Online Services.
Avoid having your accounts rejected by Companies House
Signature and name - with paper accounts it is essential both the signature and
the name of the person signing the accounts appear at the foot of the balance sheet.
If either is missing, the accounts will be rejected.
With software and web filed accounts only the name of the person who signed
the accounts is required because the company authentication code used to file the
accounts electronically serves as the signature.
Name and number - the company name and number must be precisely the same as
those appearing on the public record.
Balance sheet statements - micro entities and small companies may claim exemption
from audit or opt to omit certain elements of their accounts for filing (i.e. directors’
report or profit & loss account). To take advantage of these options, a company must
include certain exemption statements on the balance sheet.
Accounting reference dates - avoid using an incorrect accounting reference date by
checking the company record with the Companies House Service before submission.
You can sign up for the email reminder service which provides up to four options
for email addresses which can be sent to people within the company and/or the
accountancy practice.
Webfiling and software filing will also enable simple and straightforward changes
of accounting reference dates where required.
For more information, please visit the GOV.UK Companies House website.
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Agent Update
Agents and HMRC working together February - March 2017 - Issue 58
Welcome
Tax
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Incentives and Reliefs Research and Development (R&D) Tax Credits
In 2000 the government introduced a scheme to encourage scientific and
technological innovation within the United Kingdom. R&D is a Corporation Tax
(CT) relief that may reduce a company’s tax bill if the company is liable for CT or
in some circumstances a payable tax credit may be received.
Find out more about R&D tax relief and which expenses qualify in our short
YouTube videos:
What is Research & Development tax relief?
What expenses qualify for Research & Development tax relief?
How to claim Research and Development tax relief for grant funded work
There is more detailed guidance, including case studies, on GOV.UK
Research and development tax relief: Making R&D easier for small companies.
The guide provides:
•straightforward definitions and explanations of the scheme
•details of qualifying costs
•guidance on how to make a claim under the Small Medium Enterprises and
Consultations
Working Together
If a company carries out R&D for itself or other companies, it could qualify for
Advance Assurance. This means that for the first three accounting periods of claiming
for R&D tax relief, HMRC will allow the claim without further enquiries.
National helpline
0300 1233440
National Email box
R&D.Incentives&[email protected]
National Minimum and National Living Wage: Employers
need to get ready for the increase on 1 April
The hourly minimum wage a worker is entitled to depends on their age and whether
they are an apprentice. The National Living Wage for those aged 25 and over will
increase from £7.20 to £7.50 per hour.
The National Minimum Wage will also increase:
•for 21 to 24 year olds - from £6.95 per hour to £7.05
•for 18 to 20 year olds - from £5.55 per hour to £5.60
•for 16 to 17 year olds - from £4.00 per hour to £4.05
•for apprentices - from £3.40 per hour to £3.50*.
•R&D Expenditure Credit schemes
The daily accommodation offset will increase from £6.00 to £6.40.
•advice on where to find help and further information.
Last month the government also announced a new awareness campaign to ensure
workers know how much they are legally entitled to.
The guide also has a section on how to make a claim including the boxes you will
need to complete on the CT600.
*This rate is for apprentices aged 16 to 18 and those aged 19 or over who are in their
first year.
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page 4 of 21
Agent Update
Agents and HMRC working together February - March 2017 - Issue 58
Welcome
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Consultations
Working Together
PAYE
New employee tax code notifications
Apprenticeship levy - are your clients ready?
HMRC is reminding employers about the importance of regularly checking for
new employee tax code notifications. Operating the wrong tax code can affect an
employee’s Universal Credit payments. Employees can use their Personal Tax Account
to check their information.
From 6 April 2017 some UK employers will need to calculate, report and pay the
apprenticeship levy to HMRC through the PAYE process each month, using the
Employer Payment Summary (EPS). The levy due then needs to be paid alongside their
tax and National Insurance contributions.
Every employer (subject to the connected companies and connected charities rules)
will have an annual allowance of £15,000 per year to offset against their levy liability.
In practice, this means that only employers with an annual pay bill of over £3 million,
or groups of connected companies and charities with a combined annual pay bill of
over £3 million will need to report and pay. For all other employers, no further action
is required.
Read Apprenticeship levy and how it works.
Viewing Apprenticeship Levy liabilities
The Agent Services beta service currently provides a number of agents, who have
been authorised by their clients, with access to employer data for PAYE liabilities and
payments, including the amount, date, and tax month(s) a payment has been allocated
to. Every morning we offer a small number of agents with under 200 clients in all tax
regimes, the opportunity to join the Agent Services beta service.
The Agent Services private beta will be enhanced so that it also shows information
on the Apprenticeship Levy. This enhancement will be available to agents during
the summer of 2017. Unfortunately it will not be possible for agents to see this data
earlier, but employer clients will be able to see their Apprenticeship Levy liability
using their Business Tax Account after April.
Taxing Benefits and Expenses through payroll
If your clients are payrolling benefits and expenses, or considering doing so, they will
need to register with our payrolling benefits and expenses online service. They will
have to do this before the start of the tax year for which they want to payroll. They
can do this now and payroll benefits from 2017-18 onward, giving them time to check
their software and inform their employees before 6 April 2017.
From April 2018 HMRC will be collecting information about car and car fuel
benefits through PAYE reporting. The introduction of these new reporting
requirements should allow employers time to update their payroll systems and
understand the new process.
There is more information about end of year procedures and payrolling benefits
in kind in the February edition of Employer Bulletin.
The Scottish rate of income tax
The Scottish rate of income tax was implemented on 6 April 2016 and for the
majority of our customers this has been successful. Scottish taxpayers have been
correctly identified and given an “S” tax code based on the address we hold on our
systems. If your clients have moved home recently please ask them to tell us their new
address - this can be done online or through their Personal Tax Account. If they have
not yet used their account they will need to register.
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Agent Update
Agents and HMRC working together February - March 2017 - Issue 58
Welcome
Tax
HMRC service
We are aware that some employers are not operating the correct tax code. It is
imperative that all employers use the latest payroll software and is aligned with the
latest HMRC PAYE Desktop Viewer (PDV) version 2.43.
We will continue to review and validate Scottish residential addresses where
appropriate which may result in a Scottish tax code being generated. A large number
of P9 coding notices will be issued from 18 February 2017, this work is due to be
completed in early March.
Employers must ensure their payroll software is up to date prior to 18 February 2017
to be able to apply the correct tax code. If you are unsure how to include Scottish
codes on your payroll systems, you may need to contact your software provider.
On 15 December 2016, the Scottish Budget announcement set out the Scottish
Government’s proposed income tax bands and rates for 2017-2018.
Pensions
The Pensions Regulator (TPR): automatic enrolment updates
TPR has published new information in the business adviser section of to its website
in response to feedback from events and webinars. You can now find out all you need
to know about:
Automatic enrolment exemptions
This includes information about staff who don’t have to be automatically enrolled,
such as sole directors of companies. You can also read about the regulation changes
that were made in April 2016 and what they mean for your clients - for example, they
can now choose whether or not to enrol directors working under an employment contract.
Consultations
Working Together
What happens if your clients are late complying with their duties?
TPR recognises that most employers will want to do the right thing for their staff
and will work with your clients if they need help to comply. However, if your clients
ignore their duties they will face enforcement action, which may involve being fines
or even prosecuted.
Find out how to keep your clients on track if they fail to meet their AE duties.
Re-enrolment
Get the lowdown on re-enrolment, including who needs to be put back into a scheme,
and by when, opting out and re-declaration. There is also a link to more advanced
guidance if you have a detailed re-enrolment question.
Revenue and Customs Briefs
Revenue and customs briefs are bulletins giving information on developments and
changes of interest. They are used to announce changes in policy or to set out the
legal background to an issue and have a 6 month life span.
Spring 2017 Budget
The 2017 Budget will be announced on 8 March and the Finance Bill published
on 20 March. Please note that there will be some restrictions on HMRC’s external
communications during this time.
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Agent Update
Agents and HMRC working together February - March 2017 - Issue 58
Welcome
Tax
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Tax-Free Childcare
Consultations
Working Together
And for wider employers?
Tax-Free Childcare launches for parents from early 2017 as a new Government
scheme to help working families with their childcare costs.
Employers should note that parents (or a household) cannot claim both childcare
vouchers and Tax-Free Childcare.
The scheme will allow eligible parents to open online childcare accounts to make
payments direct to their registered childcare providers. For every £8 parents pay in
to these accounts, the government will add £2, and the total amount in the account
can only be spent on childcare. Parents can receive up to £2,000 in government
support per child, per year, or £4,000 for disabled children.
A guide has been produced for parents, which sets out how the current Employer
Supported Childcare scheme will remain open to new entrants until April 2018.
After April 2018, parents already registered for Employer-Supported Childcare
will be able to continue using it as long as employers continue to offer it.
Is your client a childcare provider?
VAT
Over 100,000 registered childcare providers across the UK have received invitations
to sign up to Tax-Free Childcare. Letters were posted throughout September and
October 2016, containing a unique sign up code.
Childcare providers need to sign up for Tax-Free Childcare to be able to receive
payments from parents, via the scheme. Your client should act now to sign up, using
the unique code contained in their invitation.
Your clients will need their unique sign up code, and once in the secure site they
will need to:
•confirm their unique taxpayer reference (UTR) number; or National Insurance
number, if they are a nanny and don’t have a UTR
•provide bank details for the account they wish to receive Tax-Free Childcare
payments into.
Find our more and sign up.
Read Tax-Free Childcare: 10 things parents should know.
VAT Notice 733: Flat Rate Scheme for small businesses
This notice cancels and replaces Notice 733 (May 2016).
VAT Notice 702: imports
This Notice 702 (December 2016) cancels and replaces Notice 702 (October 2014).
Details of any changes to the previous version can be found in paragraph 1.2 of
this notice.
VAT Notice 701/58: charity advertising and goods connected
with collecting donations
This notice cancels and replaces VAT Notice 701/58 (March 2002).
See all the VAT Notices listed numerically.
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page 7 of 21
Agent Update
Agents and HMRC working together February - March 2017 - Issue 58
Welcome
Tax
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Consultations
Working Together
Contact
Employers need to register for email alerts
HMRC working with Tax Agents Blog
As the Department moves rapidly down the digital road it is becoming more apparent
that the days of paper mailings are numbered. It is important agents encourage
employers to register to receive email alerts so they are aware of the latest coding
changes and important information that is published on the government web pages.
The blog provides another channel to communicate about:
•the latest Talking Points meetings and how to take part
•joint HMRC and agent consultations
•improvements to HMRC services by working together
•news and updates that are agent specific
•HMRC’s Agent Strategy and the rollout of new digital services available for agents.
Where’s My Reply?
Find out when you can expect to get a reply from HMRC to a query or request you’ve
made. There is also a dedicated service for tax agents to:
•register you as an agent to use HMRC Online Services
Twitter
•process an application for authority to act on behalf of a client
Tweets cover information about HMRC and tax including; news, publications,
information, consultations, speeches and publicity campaigns. Follow us on
Twitter@HMRCgovuk.
•amend your agent details.
HMRC service
Agent Account Managers (AAMs) in HMRC
HMRC has a UK-wide team of AAMs to help tax agents and advisers deal with the
department more effectively. Find out how to use the AAM service.
Complain to HM Revenue and Customs
To make a complaint against HMRC on behalf of your client you must be
appointed as their Tax Advisor.
Start using Where’s My Reply? for tax agents
Manuals
Recent Manual updates
You can check the latest updates to HMRC manuals or subscribe to automatic
notification of changes.
Online
Future online services downtime
Information is available on any downtime that may affect the availability of HMRC’s
online services. Please note this is subject to change and confirmation by HMRC’s
IT provider.
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page 8 of 21
Agent Update
Agents and HMRC working together February - March 2017 - Issue 58
Welcome
Tax
HMRC service
Online security - stay safe online
HMRC continuously monitors systems and customer records to guard against
fraudulent activity, providing regular updates on scams we are aware of. If you
have any concerns regarding the authenticity of any emails received from HMRC
see the online security pages for agents.
Consultations
If you think there may be tax to pay on income received during the Administration
Period you should write to:
HM Revenue & Customs
Administration of Estates Cardiff
BX9 1EL
Online training material and useful resources for tax agents
and advisers
or
HMRC videos on YouTube, online learning modules, and live and pre-recorded
webinars are available for tax agents and advisers providing you with free help,
learning and support on topical subjects.
Paying the right amount of tax through PAYE
Phishing emails and bogus contact: HMRC examples
A new phishing scam using the subject ‘Tax Returns’ has been circulated in high
volumes and added to our phishing register.
PAYE
Changes to Bereavement Contact
Working Together
Call the HMRC Deceased Estates helpline on 0300 123 1027 for advice.
In the latest edition of the Employer Bulletin you can learn about HMRC’s ongoing
work to transform the tax system. In particular, from May 2017 HMRC will improve
the way it uses real time information to make automatic adjustments to PAYE tax
codes as they happen, rather than waiting until the end of the tax year. These changes
will help more personal taxpayers pay the right tax on their income as they earn it
meaning more people will pay the right amount of tax by the end of each tax year.
In April a Talking Points meeting will be scheduled to provide more information on
the changes to PAYE. To find out how to register to receive an invitation please see
the Talking Points article on page 19 of this edition.
The Customer Services Working Together and Shaping our Services project team
recently reviewed the customer journey for our bereaved customers and their
representatives.
Publications
As a result of the review it has now been agreed to centralise all Administration
Period work in Cardiff from 1 March 2017. This will improve the customer journey
by reducing stress at a sensitive time for the customer.
Employer Bulletin issue 64 was published on 13 February 2017. This contains topical
and useful information about PAYE processes and procedures. This publication is
issued six times a year, and for employers to be informed when it is available on the
GOV.UK website, they must register to receive the email alerts.
Employer Bulletin Issue 64
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page 9 of 21
Agent Update
Agents and HMRC working together February - March 2017 - Issue 58
Welcome
Tax
HMRC service
National Insurance Services to Pensions Industry: countdown bulletins
Countdown Bulletin 23
This bulletin gives important information about the ending of contracting-out.
Trusts and Estates newsletters
Consultations
Working Together
This year’s refresh work is already under way so make sure you download the toolkits
each time you need them so as not to miss out on any updates.
The full list of the 20 toolkits can be found on the GOV.UK website and are free
to download.
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Newsletters published by HMRC, giving updates and guidance on Inheritance Tax
and trusts.
Raw Tobacco Approval Scheme
All businesses and individuals who carry out any activity involving raw tobacco will
need to have an approval for the Raw Tobacco Approval Scheme by 1 April 2017, unless
an exemption applies or be at risk of having their raw tobacco seized and a penalty
issued. HMRC began accepting applications to the scheme from 1 January 2017.
Read How to apply for the Raw Tobacco Approval Scheme - GOV.UK
Toolkits
Now that January’s Self Assessment tax returns are finished why not take a look
at the toolkits available to support the accurate completion of other returns.
Here are some of our most popular ones:
•Directors Loan Accounts toolkit useful for anyone completing a Company
Tax Return
•Capital vs Revenue Expenditure toolkit covering things like acquisition,
improvement and alteration of assets and IT costs
•National Insurance Contributions and Statutory Payments toolkit for anyone
operating payroll functions. This one includes help with employers end of year
forms and record keeping
•And the Property Rental toolkit focusing on the Income Tax legislation.
page 10 of 21
Agent Update
Agents and HMRC working together February - March 2017 - Issue 58
Welcome
Tax
HMRC service
Current Consultations
Withdrawal of extra statutory concessions (ESC) 2017
Closes 7 March 2017
HMRC would like to gather evidence from those who have relevant data about the
potential impact of withdrawing the following four ESCs:
•Zero-rating of central processor - Notice 701/7 (VAT)
•Composite rate of VAT for computer systems - Notice 701/7 (VAT)
Consultations
Working Together
Tackling offshore tax evasion: A requirement to notify
HMRC of offshore structures Closes 27 February 2017
This consultation aims to establish the high level design principles for a proposed legal
requirement on businesses that create or promote certain complex offshore financial
arrangements to notify HMRC of their creation, and provide a list of clients using them.
Clients in their turn would be expected to notify HMRC of their involvement via a
notification number on their personal tax account.
•Affiliation fees for sports clubs - Notice 701/45 (VAT)
Summary of responses
•C12 - Retail co-operative societies: accounting periods (Income/Corporation Tax).
Alignment of dates for ‘making good’ on benefits-in-kind
Hybrid and other mismatches - draft guidance Closes 10 March 2017
This draft guidance is provided to assist understanding of the application of the
hybrids mismatch legislation, which took effect from 1 January 2017.
The government response sets out that the date for making good on benefits-in-kind
which are not accounted for in real time through Pay As You Earn (‘payrolled’) should
be 6 July following the end of the tax year. This brings greater clarity to the rules and
helps employers and employees understand their obligations.
Scope of VAT Grouping Closes 27 February 2017
Authorised contractual schemes: reducing tax complexity for investors
A consultation on whether to make changes to UK VAT grouping following the
decisions of the Court of Justice of the European Union (CJEU) in Larentia + Minerva
and Marenave (C-108/14 and C-109/14) and Skandia America Corporation (C-7/13).
This document summarises responses to the consultation on tax rules related to
co-ownership authorised contractual schemes, particularly capital allowances and
information requirements.
The main focus of the consultation will be to review:
•options around eligibility requirements for VAT group registration
•the impact of policy changes following the CJEU decision in Skandia.
We are also interested in views about the interaction between VAT grouping and cost
sharing provisions.
Business Income Tax: Simplified cash basis for unincorporated
property businesses
This document summarises responses to the consultation on the extension of cash
basis to landlords.
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Agent Update
Agents and HMRC working together February - March 2017 - Issue 58
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Consultations
Working Together
Consultation on abolishing class 2 National Insurance and
introducing a contributory benefit-test to class 4 National Insurance
for the self-employed
Making Tax Digital: Voluntary pay as you go
The government consulted on reforming self-employed National Insurance
Contributions to protect access to the new State Pension and working age contributory
benefits - this response document sets out how the government intends to proceed.
Making Tax Digital for Business: An overview for small businesses, the
self-employed and smaller landlords
Fulfilment house due diligence scheme
For those who wanted an easier way to respond to our consultations, HMRC created
a short online survey which covered all six of our Making Tax Digital consultations.
This summary of responses document sets out respondents’ feedback to the consultation
on the Fulfilment House Due Diligence Scheme and contains the government’s response.
Landfill Tax: improving clarity and certainty for taxpayers
In the consultation, the government invited views on proposed changes to the
definition of a taxable disposal, without altering the scope of the tax.
Making Tax Digital: Bringing business tax into the digital age
This document summarises responses to the consultation on how digital record
keeping and regular updates should operate.
This document summarises responses to the consultation on options for customers
who must keep digital records to make and manage voluntary payments.
Off-payroll working in the public sector: reform of the intermediaries’
legislation
The consultation set out the government’s proposal to move responsibility for
determining whether the off-payroll rules apply to a contract, and deducting and
paying the associated tax liability, to the public sector body or agency engaging the
worker through their personal service company.
Part surrenders and part assignments of life insurance policies
Making Tax Digital: Tax administration
Following this consultation draft legislation has been published, together with this
summary of consultation responses, to allow policyholders to apply to HMRC to have
disproportionate gains recalculated on a just and reasonable basis.
This document summarises responses to the consultation covering changes to aspects
of the tax administration framework.
Penalty for participating in VAT fraud
Making Tax Digital: Transforming the tax system
through the better use of information
This document summarises responses to the consultation about how HMRC
will use information from third parties to give customers a better service that is
more transparent.
Having carefully considered the responses to this consultation, the government has
decided to proceed with the introduction of a penalty for participating in VAT fraud.
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Agent Update
Agents and HMRC working together February - March 2017 - Issue 58
Welcome
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Personal portfolio bonds - reviewing the property categories
Having considered the responses, the government decided to legislate in Finance Bill
2017 to take a power allowing changes to the property which can be selected to be
made by regulations. Draft regulations are being published for further consultation.
Reforms to Corporation Tax loss relief: consultation on delivery
The government ran a consultation on the reforms over the summer and, in
responding to this, will take steps to address unintended consequences and simplify
administration of the new rules.
Re-scoping of the bank levy
This document summarises the responses received to the consultation and government
decisions on the issues raised.
Salary sacrifice for the provision of benefits-in-kind
Consultations
Working Together
Strengthening the Tax Avoidance Disclosure Regimes
for Indirect Taxes and Inheritance Tax
This document provides a summary of responses to our consultation on Strengthening
the Tax Avoidance Disclosure Regimes for Indirect Taxes and Inheritance Tax.
Strengthening Tax Avoidance sanctions and deterrents:
discussion document
This document provides a summary of responses to our consultation on sanctions and
deterrents for enablers and users of tax avoidance which is defeated by HMRC.
Tackling Disguised Remuneration: technical consultation
This document provides a technical overview of the changes announced at
Budget 2016, highlighting amendments and additions, as well as a summary of the
responses to the consultation.
This document sets out a summary of responses received from the consultation on
salary sacrifice for the provision of benefits-in-kind.
Tackling the hidden economy: extension of data-gathering powers
to money service businesses
Simplifying the PAYE Settlement Agreement (PSA) process
This document summarises responses to the consultation over summer 2016 on
extending HMRC’s data gathering powers to Money Service Businesses.
This document summarises responses to our consultation over summer 2016 on
Simplifying the PSA and confirms the government’s proposed next steps in this process.
Soft Drinks Industry Levy
This document summarises responses to the consultation over summer 2016 on
introducing a levy on sugar sweetened beverages and provides a summary of the
government response and the proposed next steps in this process.
Tackling offshore tax evasion: a requirement to correct
This document provides a summary of responses to our consultation.
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Agent Update
Agents and HMRC working together February - March 2017 - Issue 58
Welcome
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Consultations
Working Together
Tax deductibility of corporate interest expense
Universal Credit and Child Tax Credit: exceptions to the 2-child limit
To prevent large businesses from using interest expense to erode the tax base, the
government is introducing rules to limit the tax deductions that large businesses
can claim for their interest expense in the UK, effective from 1 April 2017. The
new interest restriction rules will be consistent with the Organization for Economic
Cooperation and Development’s (OECD) best practice recommendations set out
under Action 4 of the Base Erosion and Profit Shifting (BEPS) Project.
We published the government response to this consultation on 20 January 2017.
We received 82 responses. Around 50 were from organisations.
Tax treatment of freeplays in Remote Gaming Duty
Agent Update 58 contains all new open consultations and a summary of new responses
available when this issue was being published, but please check for any that may have
subsequently been issued.
section ends
At Budget 2016 the government announced that it would amend the tax treatment
of freeplays in remote gaming to bring them into line with those in general betting.
The consultation highlighted that the draft legislation for the proposal would impose
significant burdens on businesses.
The government will proceed with a slightly revised option that will reduce
these burdens and still achieve the original aim of levelling the playing field. The
government will legislate for this in Finance Bill 2017.
Tobacco Illicit Trade Protocol - licensing of equipment
and the supply chain
This document summarises the responses on the mandatory licensing of tobacco
manufacturing machinery.
A separate document will be issued in due course which will summarise the responses
and next steps regarding a potential licensing system for participants in the supply
chain of tobacco products (questions 9-10 and 14-17 of the consultation document).
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Agent Update
Agents and HMRC working together February - March 2017 - Issue 58
Welcome
Tax
HMRC service
Working Together Team (WTT)
Working Together (WT) is a partnership between HMRC and the six main agent
representative bodies:
•Association of Accounting Technicians (AAT)
•Association of Chartered Certified Accountants (ACCA)
•Association of Taxation Technicians (ATT)
•Chartered Institute of Taxation (CIOT)
•Institute of Chartered Accountants in England and Wales (ICAEW)
•Institute of Chartered Accountants of Scotland (ICAS).
Together we look for ways to improve HMRC operations for the benefit of tax agents,
their clients and HMRC. Members from a range of other Representative Bodies
including; AIA, IAB, ICB, ICPA, IFA, CIMA, CIPFA, CIPP, CPAA, SPA, STEP and
VATPG, also actively participate and contribute to WT. The WTT maintains an
issues register providing details of all widespread issues. These issues are prioritised
by the Professional Bodies (PBs) on the Issues Overview Group (IOG) and the highest
priority ones are monitored by the Joint Initiative Steering Group. The Specialist
Agent Managers (SAMs) use the register to keep agents in WT Digital meetings up to
date with the latest information and news.
Digital Working Together (DWT) Meetings
Continuing our program of jointly hosted digital meetings, our next meeting will
take place on 22 February. Following the success of the last meeting on 9 November,
we will again be broadcasting from the AAT premises at their Barbican office, in
London. These meetings are dedicated to the discussion of widespread issues, as
well as the early identification by agents of potentially widespread issues. These are
documented on the Agent Digest and issued to all registered WT agents 7 days prior
to the next meeting. These issues continue to be monitored by the IOG, who rate
them in terms of priority.
Consultations
Working Together
Our online Agent Forum pilot, testing a digital channel for raising and discussing
issues in real time, is continuing to grow in membership. Early feedback has been very
positive, and we will continue to provide updates both here and through the DWT
meetings. Should you wish to participate in the trial please register and join the next
DWT meeting, following which you will be able to enrol and participate in the
Agent Forum.
WT Open Issues Register
Following the October meeting with the IOG, the PBs representatives reviewed the
widespread issues. These issues are then discussed at the DWT meetings.
If you want to know more about the issues being discussed at the DWT meetings
or you want to have your say, please contact your PB. The contact details are on
page 21. If you do not belong to one of the PBs listed please send details to the
agent engagement mailbox.
The IOG agreed the following issues as Priority 1:
WT ref
Business area
Issue
WT239 Self Assessment
Delays reported in repayments
WT242 Online
Completing and saving HMRC online forms
WT243 Online
Online notices of coding
WT247 Self Assessment
Different information regarding the need to complete
2015/16 Returns
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Agent Update
Agents and HMRC working together February - March 2017 - Issue 58
Welcome
Tax
HMRC service
WT239: Delays reported in repayments: This was originally to be as a result of the
incorrect signal set on client’s accounts. The business have reported that during 2015
there were periods when HMRC customer service levels were not where they needed
to be and since then HMRC has taken major steps to improve its performance,
including recruiting 3,000 new staff into customer service roles.
HMRC are aware that some employers have previously experienced delays in
receiving repayments. They have been working hard to address this issue by
redirecting resources and streamlining processes.
Please also refer to the article entitled ‘PAYE accounts in credit’ on page 5 of
Agent Update 57.
WT242: Completing and saving HMRC online forms: the PBs discussed the
continuing frustration for agents not being able to complete, file and save partially
completed forms.
HMRC have been working to enhance our product that will start to give agents access
to I-Forms. Initially there will be 7 payroll related forms. These forms can be accessed
through the Government Gateway. (see below for the list of forms and links).
Following feedback from Professional Body representatives and agent volunteers,
HMRC has now developed:
•Save & Retrieve (S&R) functionality
•a bespoke start/guidance page for each agent form, to provide a clear view of
‘What you need to complete this form’.
In providing, agents/agencies with multiple instances of S&R, essentially a page listing
all saved items in respect of that form and an option to start a new form for that
gateway account. Anyone who knows the User ID and password used to create the
form can view, change, submit or delete it.
The product went live in January and HMRC plan to continue to roll out Agent
access to I-forms over the coming months.
Consultations
Working Together
The Project continue to keep the Professional Bodies updated with progress.
CA3821: https://www.tax.service.gov.uk/forms/form/Sending-employees-to-workabroad-agents/new
CA3822: https://www.tax.service.gov.uk/forms/form/european-economic-areaemployees-agents/new
CA3837: https://www.tax.service.gov.uk/forms/form/self-employed-temporarilyworking-european-economic-area-agents/new
CA9107: https://www.tax.service.gov.uk/forms/form/application-for-certificate-ofcontinuing-liability-for-reciprocal-agreement-countries-agents/new
CA8421i: https://www.tax.service.gov.uk/forms/form/working-in-two-or-moreeuropean-economic-area-countries-agents/new
PT_CertOfRes: https://www.tax.service.gov.uk/forms/form/request-for-certificate-ofresidence-in-the-uk-agents/new
S690: https://www.tax.service.gov.uk/forms/form/application-for-a-section-690-orinformal-treaty-direction-agents/new
WT243: Online notices of coding: The IOG has raised the following issues around
coding notices. If you want to see the detail of this issue, please refer to the update
reported in Agent Update 57 pages 16 and 17.
WT243.3 and WT243.4 Open: Tax codes appearing in the upcoming year tab, and
tax codes appearing in the previous year tab. Please report any issue that occurs in this
manner through the HMRC Online Services Helpdesk where they will be investigated.
This aspect of the issue was discussed at the November DWT meeting and agents
were asked if they were still experiencing problems and to provide HMRC with
examples. As no examples were received it is proposed to make this issue dormant
as cases may arise at the end of the tax year. Cases that do arise should be reported
through the Online Services Helpdesk.
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Agent Update
Agents and HMRC working together February - March 2017 - Issue 58
Welcome
Tax
HMRC service
WT243.5 Dormant: Bank/Building Society interest figures. The pre-population
of bank and building society interest last year was trialled for a limited number of
customers. Initially banks and building societies will only report a change in interest,
so where HMRC currently hold a historical figure for the customer and they no
longer receive interest, the bank/building society will not report a change. This
historical estimate will remain in the customer’s code in the meantime, but we are
continuing to work to resolve this. For the time being, customers can of course tell
HMRC the correct figure through their Personal Tax Account.
WT243.6 Open: Incorrect codes. HMRC have identified the areas that have caused
these issues and they will be fixed within the coming months. Some of the codes
were generated from a HMRC process that happens once a year and HMRC will be
reviewing this process to address these issues. Incorrect codes were also generated due
to the information supplied by employers on Full Payment Submissions (FPS).
WT247: Information regarding the need to complete 2015-16 Returns. The problem
was reported in respect of contradictory details on the HMRC system has affected
customers whose 2015-16 SA Return has not been issued by the SA system. The
problem has been identified and an IT fix to resolve the problem was implemented in
November. IOG will keep this under review to ensure there are no new reports.
If none are received over the next couple of months the issue will be closed.
IOG have agreed the remaining open widespread issues as Priority 2:
WT237: HMRC correspondence including postal delays
WT238: Telephone delays on non-Agent Dedicated Lines (ADL)
WT246: Transfer of Marriage Allowance within SA.
There have been no widespread issues closed since those reported in Agent Update 57.
In respect of closed issues, WT always do all they can to ensure that an issue has been
fully addressed before closing it and part of the role of the IOG is to ensure that issues
are not closed prematurely.
Consultations
Working Together
However we recognise that sometimes we may close an issue and agents may still
experience problems. When that is the case WT are always prepared to re-open a
closed issue provided agents can supply the evidence that the issue is continuing to
cause problems.
Blank Self Assessment (SA) Returns for Agents
Background
In April 2016, HMRC issued approximately 280k paper SA tax returns (excluding
SA200 Short Tax return) to all customers who filed a 2014-15 SA tax return on paper
in the previous year.
An additional 128k have been requested from customers and agents using the SA
Orderline. Of these at least 50% have been ordered by agents. Agents (only) can order
returns using the Online Forms Ordering Service on GOV.UK where they can obtain
blank Self Assessment, Corporation Tax, Stamp Duty Land Tax forms and a form to
claim back tax paid on savings interest.
Action
From 6 April 2017, to manage our budget, blank SA tax returns (and guidance notes)
will no longer be available to order from the Online Forms Ordering Service on
GOV.UK and will be restricted to a maximum order of 10 SA tax returns (and
guidance notes), from the SA Orderline.
All of the tax returns and guidance notes for the 2016-17 tax year and the previous
three tax years, will be available to download from the GOV.UK website from
6 April 2017.
Customers will still be able to obtain a blank SA tax return (and guidance notes)
by downloading from GOV.UK, calling the SA Orderline or the helpline number.
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Agent Update
Agents and HMRC working together February - March 2017 - Issue 58
Welcome
Tax
HMRC service
Class 2 National Insurance Contributions (NICs) impacts on claims to
Employment and Support Allowance and Job Seekers Allowance
For the majority of the self-employed Class 2 NICs are now collected as part of
the Self Assessment tax return process which are filed and paid in January of the
following tax year.
Due to the Department for Work and Pensions (DWP) benefit year starting on
the first Sunday in January each year, this has implications for DWP benefits of
Employment and Support Allowance (ESA) and Job Seekers Allowance (JSA) for
Share fishermen.
The benefits have conditions that rely on the payment of Class 2 NICs in respect of a
specific period. Class 2 customers have until 31 January to pay their Class 2 NICs for
the previous tax year. If they make a claim for the contributory benefits in January,
their contribution record for the previous tax year may be deficient.
To ensure we have the full up to date contribution record in cases where a customer is
making a claim for ESA or JSA and they are self-employed it will be in the customer’s
best interests to file and pay their self assessment tax return as soon as possible.
Consultations
Working Together
Making Tax Digital
Digital tax revolution moves a step closer
HMRC has published its responses to the six consultation documents issued in
August 2016. Further details can be found within the Consultation section of this edition.
Paper Copies of CWF1 will no longer be supplied by HMRC
The government is committed to reducing burdens for taxpayers and building a
transparent and accessible tax system fit for the digital age. Customers are increasingly
transacting with HMRC digitally with 9 million customers currently using their
Personal Tax and Business Tax Accounts. In line with this strategy HMRC have
stopped issuing paper copies of form CWF1.
This form is no longer available to be ordered via the helplines. This form is available
on GOV.UK to complete, print and download or customers can use HMRC’s online
tax registration service. Please look under ‘Register for self-employment’. Help is also
available to customers who have specific needs.
HMRC are working to provide agents with access to online I-forms. We know that
agents would like access to the I-forms to be supported by Save and Retrieve and
Track and Trace functionality and also to be provided a ‘view’ of the full form prior
to completion. We are working to include this functionality along with agent access.
In the meantime you can complete this blank printable CWF1 for your clients, or
send to them for completion.
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Agent Update
Agents and HMRC working together February - March 2017 - Issue 58
Welcome
Tax
HMRC service
Talking Points
Have you joined a Talking Points meeting yet? Talking Points is a programme
of weekly digital meetings, which include presentations and live Q&A sessions
with HMRC subject experts. We cover a range of subjects, focussing on topics of
particular interest to agents. Over 2,000 agents joined us for Talking Points during
January and feedback has been very positive. We covered technical topics including
Trade Losses, Capital Allowances & Vehicles and Basis Periods.
Our Talking Points meetings for the remainder of February and March will cover the
following subjects:
•Tuesday 21 February 1pm-2pm and 3pm-4pm
2 Step Verification and Business Identity Verification update
Find out what HMRC are doing to secure customers online accounts for both
business and agents.
Register for 1pm meeting
Register for 3pm meeting
•Friday 10 March 11am-midday and 1pm-2pm
Trade Losses: This meeting will look at the different ways that trade losses may
be relieved.
Register for 11am meeting
Register for 1pm meeting
•Friday 17 March midday-1pm and 2.30pm-3.30pm
The Pensions Regulator: supporting your clients through Automatic Enrolment
Hear the latest updates from The Pensions Regulator and put your questions to
The Pensions Regulator’s expert.
Register for Midday meeting
Consultations
Working Together
•Thursday 23 March 11am-midday and 2pm-3pm
Intellectual Property Office (IPO): an introduction to Patents
This meeting is the fourth of our series in which the IPO will give a brief overview
on Intellectual Property and will focus on Patents.
Register for 11am meeting
Register for 2pm meeting
•Tuesday 28 March 11am-midday and 3pm-4pm
Making Tax Digital (MTD): Helping your clients prepare for MTD
This meeting will give an overview of recent MTD announcements.
Register for 11am meeting
Register for 3pm meeting
•Wednesday 29 March midday-1pm and 3pm-4pm
HMRC’s Application Programming Interface (API) Strategy: how we are
supporting Making Tax Digital.
This meeting will provide an overview of HMRC’s API strategy and how this is
supporting Making Tax Digital.
Register for midday meeting
Register for 3pm meeting
You can find out more and view recordings of any meetings you may have missed
on GOV.UK.
If you have already joined Talking Points meetings and found them useful, then please
let your colleagues know and encourage them to join us.
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Register for 2.30pm meeting
page 19 of 21
Agent Update
Agents and HMRC working together February - March 2017 - Issue 58
Welcome
Tax
HMRC service
Top issues raised with the Agent Account Managers (AAMs)
The top five issues dealt with by the AAMs in January 2017 were:
•PAYE repayments - resolving delays in the processing of repayment requests that
have not been verified or released made via return, online, post and Deeds of
Assignment (DOA)
•agent maintainer issues - supporting the processing and resolution of outstanding
64-8’s, changes to agent details and DOA
•SA correspondence - progress chasing letters, forms not processed, SA400s and SA1s
•PAYE correspondence - escalating and resolving delayed responses to correspondence
and the processing of repayment requests made by DOA and missing letter
•SA repayments - Progress chasing repayment requests made via return, online and post.
If you have a client specific issue please contact the Agent Account Managers Issue
Resolution team.
Agent Services (AS)
HMRC are planning to introduce several important agent enablers during 2017, in
support of the public beta of Making Tax Digital for Business (MTDfB).
A process that an agency will need to follow to subscribe to Agent Services, a requirement
to joining MTDfB. This will enable agents access to MTDfB related services including:
•Registration of a new business
Consultations
Working Together
AS subscription is a one off process, which will create a single accurate record for
an agency in HMRC’s new tax platform - the Enterprise Tax Management Platform
(ETMP). As part of the subscription process, agencies will be enrolled for a new agent
services agent enrolment in the government gateway to enable an agency to access
MTD and future ETMP related services. HMRC intends to store all agent client
relationships against the agency record in ETMP so we have an understanding of the
agent’s client representation i.e. which regime the agent acts for the client in. This
subscription process will use HMRC web based screens which will only be accessible
through an agent’s commercial software.
AS will also enable a commercial software based service that will allow agents to be
authorised to represent clients who subscribe for making tax digital for ITSA (if they
do not already have a 64-8 or online agent authorisation in place for Self Assessment).
The software solution will allow for either an agent or their client to initiate
authorisation, with the required client or agent consent being completed through
software. This will be a quicker service, with fewer steps, than the current service.
Both the agent and the client will be able to delete the relationship through software.
Client consent functionality is also being developed in the Business Tax Account
which we hope will be available by June 2017. An Assisted Digital service will also be
available for clients who require it from April.
Agents should contact their software providers to confirm when these and other
future services will be added to their product functionality.
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•Agent Authorisation for MTD/ITSA - creating a new agent/client relationship for
MTDfB-ITSA (if one doesn’t already exist under SA)
•removing agent client relationships forged using the MTD/ITSA
•MTDfB-ITSA services.
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Agent Update
Agents and HMRC working together February - March 2017 - Issue 58
Welcome
Tax
HMRC service
National Insurance Contributions (NICs) Application Programming
Interfaces (API)
The NICs annual summary API has been released as a ‘Private Beta’ service on the API
Developer Hub. The Hub enables software developers to register their applications,
and allows them to build and test their software before releasing it to users (agents).
The service allows agents to access clients’ data (if authorisation is held) using
‘Private Beta’ registered software applications. The summary data includes Class 1
total NIC earnings, Class 2 total contributions due and NICs max contribution
reached information. This will enable the calculation of the Class 4 NIC liability for
the 2015-16 Self Assessment return.
The NICs API e ‘Private Beta’ will be run in a controlled environment, and will only
allowing certain software applications access to the service.
The Private Beta is planned to run until April 2017, after which, it is intended to
widen public access.
Consultations
Working Together
Working Together Contact information for Professional
and Representative Bodies
AAT Jeremy Nottingham
ACCA Jason Piper
AIA Tim Pinkney
ATT Jon Stride
CIMA
CIOT Stephen Relf
CIPP
IAB Kelly Pike
ICAEW Caroline Miskin
ICAS Charlotte Barbour
ICPA Tony Margaritelli
IFA
VATPG Ruth Corkin
If you are not a member of a professional body, please contact the
agent engagement mailbox
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