Guidance

Issue 122 of Agent Update

Published 21 August 2024

Technical updates and reminders

Developments and changes to legislation and allowances relating to UK tax including:

Tax

Borders and Trade

Making tax Digital

HMRC Agent Services

Agent online forum and engagement

Latest updates from the partnership between HMRC and the main agent representative bodies. Including:

Tax

PAYE Settlement Agreement Calculations 2023 to 2024

If you administer a PAYE Settlement Agreement (PSA) on behalf of a client, any tax and National Insurance for the 2023 to 2024 tax year must be paid by 22 October 2024 if paying electronically, or by 19 October 2024 if paying by post. To do this you will need to submit calculations first.

The easiest way is to submit calculations online.This is a service to submit yearly calculations online and will determine the amount of tax and Class 1B National Insurance due for the tax year 2023 to 2024.  

If a payment for PSA is made without submitting calculations, we cannot verify what the payment is for or if it is correct.

To submit calculations, employers or agents will need:

• the employer reference
• the tax year of the PSA calculation — even if it is a nil return
• the type of expenses and benefits — only report those included in the PSA
• the number of employees receiving each expense or benefit, including any employees that earn below the personal tax allowance
• the correct rate of tax for each employee

Once the calculation is processed, HMRC will automatically issue a payslip confirming the amount due which also includes the payment reference number.

An Employers PSA liability and payment will not be available to view on their Business Tax Account. 

Further information is available on GOV.UK, at PAYE settlements, and on our YouTube playlist.

Tell HMRC about who is dealing with the estate when someone dies, P1000 Update 

As a result of improvement suggestions from our agent liaison groups, HMRC has now published form P1000 on GOV.UK. This form allows personal representatives of a deceased person’s estate to proactively engage with HMRC to tell us their details and also details of any agents. HMRC’s Bereavement team will contact the person(s) noted on the P1000 form in dealing with the tax affairs of an individual up to the date of death, and for Income Tax and capital gains of ‘informal’ administration periods.
We hope it will help speed up dealing with an estate and will review its use.

Form P1000 this does not replace any other means of notifying HMRC, in particular for Inheritance Tax or any ‘agent handshakes’ required by online services.
If the personal representative cannot use the form, they should usually receive a letter within 40 days of using the Tell Us Once service. 

Otherwise, they should call the Bereavement Helpline and clearly say they want the Bereavement Helpline.

Agents should also use this helpline for deceased estates in preference to the Agent Dedicated Line (ADL) to speak to the right advisers first time.

Alcohol Duty — New Digital Service

This month we are writing to approved producers of alcoholic products in the UK to tell them about the new digital service we’ll be launching in March 2025 and how to get ready.

The new digital service will simplify and modernise the processes for Alcohol Duty approvals, returns, and payments for UK producers. It will deliver on HMRC’s commitment to offer greater digital options to customers, giving them the digital experience they expect from a modern tax and customs authority.

Using the digital service will make it simpler, quicker, and easier for domestic producers of alcoholic products to account for and pay the duty they owe, across all types of alcoholic products.

HMRC will share further details on the new digital service closer to its launch date, including details on how to access it.

The new digital service is the next stage of the Alcohol Duty Review — which on 1 August 2023 saw us introducing the biggest change to Alcohol Duty in 140 years including:

• new duty rates based on alcohol content (ABV)
• 2 new reliefs Small producer relief and reduced rates for draught products), as well as transitional support for some wine products

If you support an alcoholic products producer, they may speak with you about the letter and the new digital service launch in March 2025.

Changes to Corporation Tax reminders, statements and receipts

HMRC will stop sending some paper non-statutory Corporation Tax letters where customers can access the information in their HMRC online accounts or GOV.UK guidance. Agents can access the information in HMRC’s Corporation Tax for Agents online service.

The Corporation Tax process is not changing. This is part of HMRC’s wider drive to help the environment and bring down costs by reducing its use of paper to communicate with customers.

 From September the following Corporation Tax letters will no longer be issued:

• CT205/A return reminder
• CT608 instalment payment reminder
• CT207 interest statement
• CT209 payment receipt

From October we’ll also stop sending the CT603A agent list of issued notices to deliver Company Tax return (customers will still receive the CT603 notice to file).

We’ll also trial no longer sending CT208 reminders before we stop sending them permanently. The trial runs from September until January 2025. We will monitor the effect and stop the trial if we see a negative impact on our customers or process. The letters to be trialled are: 

• CT208 PR1 payment reminder
• CT208 PR2 return and payment reminder
• CT208A PR2 return and payment reminder agent copy

Further guidance is available on GOV.UK at:

• Corporation Tax accounting periods
• Company Tax returns

Basis Period Reform — reporting profits on a tax year basis

All sole trader and partnership businesses must now report their profits on a tax year basis, beginning with the Self Assessment return due by 31 January 2025 (covering the tax year 2023 to 2024).

Any business that previously had a non-tax year accounting period must declare profits from the end of their basis period in 2022 to 2023 up to 5 April 2024, with the additional profit (after overlap relief) being transition profit. The transition profit will be spread by default over 5 years including 2023 to 2024. Accounting periods ending on 31 March will now be treated as equivalent to those ending on 5 April. This also applies to property businesses.

Businesses remain free to choose their accounting date. Any business that continues to have a non-tax year accounting period after 6 April 2024 will need to apportion profits from their accounting periods to the tax year.

We have now launched a full package of online interactive guidance to support completion of the return and working out transition profit for these cases. 

We have provided an online service to ask HMRC what the Overlap Relief figure is according to our records.

We have recently seen a major increase in demand and at present response times are not as quick as we would like, but we are now clearing the backlog of requests. If you have applied and have not heard back, you can check the progress of your request.

Please do not contact us directly as we expect to have cleared the current backlog in the coming weeks.

Help us by only using the online form if it is necessary, as it is not intended to be used to ‘check’ a figure that you already hold and there is no requirement to use the service before filing a return. As an example, we have seen cases where the client started trading within the last 3 years where the overlap figure is known to the agent. Dealing with these cases can slow down our response times for all. 

Customers can find further guidance and support for Basis Period Reform on GOV.UK.

Supporting your sole trader clients as they get started in business 

HMRC has updated one of our guidance pages to make it easier for customers to know what they need to do when setting up as a sole trader.  

They can easily check employment status, understand their obligations, and register for tax.

If you have clients who are starting out on their sole trader business journey, then direct them to our updated guidance on GOV.UK. and help them get their tax right first time.

Set up as a sole trader: step by step.

Employer liabilities and payments viewer — ‘Earlier Year Update’ becomes ‘End of tax year adjustment’

Feedback was received that we were still using the label ‘Earlier Year Update’ (EYU) for adjustments to previous tax years when this ceased to be a valid submission type for tax years from 2020 to 2021.

Year ended 5 April 2018 and earlier — adjustment will be made by submission of EYU only.

Year ended 5 April 2019 — EYU or Full payment submission (FPS) will be accepted.

Year ended 5 April 2020 — EYU or FPS will be accepted.

Year ended 5 April 2021 and later years — adjustment will be made by submission of FPS only.

We asked for their preferred label for amendments made via FPS, and we jointly decided on ‘End of tax year adjustment’.

We have now made that change to the online service.

When looking in the online account, you will now see the new terminology where ‘End of tax year adjustments’ have been made for 2020 to 2021 or later years. If you are reviewing 2019 to 2020 or previous years you will see ‘Earlier year update’.

HMRC release updated Franked Investment Income Group Litigation Order customer brief

HMRC has recently released an updated version of its customer brief outlining the basis on which it is prepared to settle open Franked Investment Income Group Litigation Order (FII GLO) issues.

The FII GLO litigation regards the differing treatment for UK Corporation Tax (CT) of dividends, depending on whether the dividend was paid by a UK resident or non-resident payer. Dividends from UK payers were exempt from CT, but dividends from non-UK payers were chargeable to CT. The legislation which is the subject of this litigation was repealed from 1 July 2009.

The new brief replaces the previous version released in January 2020 and has been updated to reflect the Supreme Court decision and the Upper Tribunal decision.

The updated brief sets out:

• how HMRC intend to allow the utilisation of carried forward Double Taxation Relief credits, as required by the decision
• the Upper tribunal decision, apart from the issues where the Upper Tribunal found against HMRC and HMRC has received permission to appeal those issues to the Court of Appeal

HMRC has shared the customer brief with the agents representing FII GLO claimants that it is aware of. If you are affected by this and have not been contacted, please contact your Customer Compliance Manager if you have one, or email [email protected].

Student and Postgraduate Loans

If you deal with payroll and you receive a student loan or postgraduate loan or both start notices (SL1 or PGL1) from HMRC for your client’s employee, it is important that you check and use the correct:

• loan or plan type on the start notice
• start date shown on the notice

This makes sure that employees do not pay any more or less than they have to.

If the employee’s earnings are:

• below the respective student loan and postgraduate loan thresholds, you should update the employee’s payroll record to show whether they have a student loan or postgraduate loan and file the start notice — you do not need to return this to HMRC
• above the respective student loan and postgraduate loan thresholds, and deductions have not been taken, HMRC will send a generic notification service prompt as a reminder — if deductions still have not started, we may contact you directly

Deductions should continue until HMRC notifies you to stop.

If you have not received a start notice from HMRC, but your employee tells you they have a student loan, ask them which plan or loan type they have. If your employee is unsure about the correct plan or loan type they should be repaying, they can check by logging in to their student loan online account.

You should still update your payroll software to start deducting and check all future start notices you receive from HMRC to make sure the employee is paying the correct amount.

Research and Development (R&D) reforms update

As mentioned in previous Agent Updates, for accounting periods beginning on or after 1 April 2024, the Small and medium-sized enterprises (SMEs) scheme no longer exists. Businesses will either need to claim the merged Research and Development expenditure credit (RDEC) or, if they qualify, the enhanced support for R&D intensive loss-making SMEs.

HMRC has updated the Additional Information Form (AIF) to accompany these changes. However, the General Election on 4 July delayed the release of the updated AIF.

HMRC’s intention is to release the updated AIF in September, and we will simultaneously update the accompanying regulations. 

Several pages of the Corporate Intangibles Research and Development (CIRD) manual have been updated to reflect the changes which have occurred over the last couple of years, and these will be published in the next few weeks.

Check whether you need to submit a claim notification 

• for many customers with 12 month accounting periods, the time limit for submitting a claim notification will be September
• if your company is making its first claim to R&D, or its first claim for 3 years, you should check now whether you need to submit a claim notification
• if your company is required to notify its claim, but a valid claim notification is not made by the end of the notification period, the company will be prevented from claiming R&D relief for that accounting period

Read the guidance on when to Tell HMRC that you’re planning to claim Research and Development (R&D) tax relief by making a claim notification on GOV.UK.

Borders and Trade

Goods Vehicle Movement Service — changes to allow the use of an an EORI number starting XI in the ‘Entry in Declarant’s Records’ EIDR field

We have recently made changes to the Goods Vehicle Movement Service (GVMS).

Businesses should now use an an EORI number starting XI, if they have one, with a valid EIDR authorisation to generate the Goods Movement Reference (GMR) number in GVMS when moving goods from Great Britain (England, Scotland and Wales) to Northern Ireland.

If a trader does not make EIDR movements between Great Britain and Northern Ireland using GVMS, they do not need to take any action, as these changes will not affect them.

What is an EIDR movement  

An Entry in declarant’s records (EIDR) movement involves declaring goods by entering them into a trader’s own records and sending other details to customs. They can do this if they are authorised to use the EIDR process. You can read more details about making an import declaration in your records.

Using the Trader Support Service

If a trader uses the Trader Support Service (TSS), there will be no change to the existing process for them and they do not need to take any further action. The TSS will continue to confirm the EORI number that the trader should use when they submit their pre-movement information. The trader should put that EORI number into GVMS to generate the GMR.

Using GVMS for EIDR movements between Great Britain and Northern Ireland

If a trader has an an EORI number starting XI with an associated EIDR authorisation and they do not use TSS, there are actions they’ll now need to take.

If a trader is creating a GMR they should:

• continue to use their an EORI number starting GB number to access and log into the GVMS system

• use the an EORI number starting XI linked to a valid EIDR authorisation to generate the GMR number in GVMS for NI EIDR movements

If someone creates GMRs on a trader’s behalf

Please make sure they inform the haulier, or the third party moving the goods for them, of their an EORI number starting XI number associated with the EIDR authorisation to use in GVMS. 

Further help and support

For more information on GVMS, read the guidance on GOV.UK. If you have any questions, please call our helpline on 0300 322 9434 and refer to this letter. 

For support or more information on the Trader Support Service, call the TSS Contact Centre on 0800 060 8888 (0800 060 8988 for Welsh speakers) or visit the Trader Support Service.

Making Tax Digital

Sign up your clients to Making Tax Digital for Income Tax

From April 2026, Making Tax Digital (MTD) for Income Tax will require self employed individuals and landlords to keep digital records and send quarterly updates to HMRC using compatible software.

This change will apply to self employed individuals and landlords with gross income from self-employment and property that totals over £50,000 from April 2026. Those with a total income over £30,000 will have to do this from April 2027.

Self-employed individuals and landlords with qualifying income below £30,000 will also be able to sign up voluntarily so they can benefit from the changes.

What are the benefits to joining now

The MTD testing phase is an opportunity to work with HMRC to help make sure MTD works best for you and your clients.

Joining MTD now will provide you with hands on experience of the new system, strengthen your MTD knowledge and help build your confidence in the new processes. You can then better prepare you and your clients for the future while getting ahead of the changes before they become a legal requirement.

Taking part in our testing programme will also give you access to our dedicated MTD Customer Support Team who will help you and your clients on MTD issues. They can support you with your selected clients wider personal tax affairs (individual PAYE and Self Assessment matters) for the 2024 to 2025 financial year.

How to join MTD testing

You can sign up as many of your eligible clients as you wish for testing in 3 steps:

1. Read the eligibility criteria and consider which clients can participate. When signing up, you’ll be asked some questions to confirm whether your client is eligible.

2. Ensure you and your client’s software is compatible with MTD and suits your needs. Before signing up, check available software options on GOV.UK and contact your chosen provider.

3. Sign up your client to the testing.

You need to be registered with HMRC for an agent services account (ASA) to take part in the testing.

Find out how to create an agent services account.

You will need to use the digital handshake to get authorised by new clients to act on their behalf.

Asking VAT registered customers to assist with MTD testing

During August, HMRC will be emailing approximately 60,000 VAT registered customers whose records show they may be eligible to join our testing phase for Making Tax Digital for Income Tax. This is to invite them to sign up for voluntary testing to help HMRC test the service, and to assist them in getting ready for the change before it becomes a legal requirement.

Some of the customers we are emailing may be your clients so they may contact you about signing up for testing.

HMRC Agent Services

Make a start on your client’s 2023 to 2024 tax return 

We’re encouraging agents who have not yet filed their client’s 2023 to 2024 tax returns to do so now.
Getting your client’s tax returns out of the way has many benefits, and our online services can help.

These tools have been purposely built for agents and they include:

• Self Assessment for agents which covers individuals, businesses, trusts and partnerships. This service allows you to submit your client’s tax return online, view and change their contact details, see their PAYE coding notice and much more

• Income Record Viewer (IRV) which can help you prepare and check tax returns. The IRV gives you access to your client’s pay, tax, employment history, pension (private and state) and tax codes

You can find more services for agents and check what account to use on GOV.UK.

Help to avoid errors in claims for plant and machinery allowances 

HMRC has published Guidelines for Compliance to help avoid errors in claims for plant and machinery allowances.

These guidelines set out common areas of error in claims. We are sharing this information to help you to get your claims right and avoid unnecessary contact from HMRC.

Guidelines for Compliance offer HMRC’s view on complex, widely misunderstood or novel risks that can occur across tax regimes.

DIY housebuilders scheme agent online submission reminder

In Agent Update Issue 119, we announced improvements to the online process allowing agents to claim VAT repayments on behalf of clients, under the VAT DIY Housebuilder Scheme.

This means that since its introduction, agents have been able to submit claims and other supporting information online — allowing HMRC to process client claims more quickly and efficiently than by paper form and post.

Please note that you do not need to use agent services to do this. You can do it using you Government Gateway user ID, but must have a valid 64-8 form that authorises you to deal with us on your client’s behalf.

You can find further guidance about the digital service at:

• VAT refunds for conversions if you’re a DIY housebuilder
• VAT refunds for new builds if you’re a DIY housebuilder

HMRC confirms changes to UK subsidy reporting thresholds for Climate Change Agreement scheme participants

HMRC confirms changes to UK subsidy reporting thresholds for Climate Change Agreement (CCA) scheme participants meaning more businesses will be required to report this information. It is required to collect data from Climate Change Agreement scheme participants whose annual tax subsidy benefit is above a defined threshold.

The way HMRC collects information on tax subsidy benefits is changing as well as the reporting thresholds. HMRC are currently finalising the reporting arrangements to enable businesses to submit their subsidy information for calendar year 2023 and will confirm the new process before the end of October 2024.

The threshold for reporting subsidy information for the 2023 calendar year and for future calendar years is £100,000. The threshold of £100,000 is lower than previous years and will mean more UK businesses will be required to report on their annual CCA subsidy benefits if it exceeds this level.

A small number of businesses registered in Northern Ireland, trading in goods or the wholesale electricity market will need to report their annual CCA subsidy benefits under state aid rules, if it exceeds £86,994.  

HMRC expects a significant increase in businesses reporting on CCA subsidies due to the reporting threshold reduction. To manage increased numbers, HMRC is redesigning how the data is collected and processed.  

Businesses will be required to report this information to HMRC digitally using an online form on GOV.UK. A link to the online form and supporting guidance will be sent once the form is available. 

This data is then published on a publicly accessible database showing all subsidy benefits above the reporting thresholds to promote accountability and transparency.  

Further information will be provided in the next Agent update edition to confirm the launch of the data collection exercise for the 1 January 2023 to 31 December 2023 reporting period.  

Apply for healthcare cover in the EU, Iceland, Liechtenstein, Norway or Switzerland (CA8454) 

An online form for those who need healthcare cover in an European Economic Area country, Iceland, Liechtenstein, Norway, or Switzerland is now live.

The application, form CA8454, is for those who need a healthcare entitlement certificate (S1):

• for their dependants and already hold a certificate of coverage (Also known as a PDA1) and S1 for themselves for the same period
• themselves, or their dependants while on maternity, paternity or adoption leave as an employee who is, or will be, resident in one of these countries
• because they’re working and resident in the UK and require healthcare cover for dependants who are resident in one of these countries
• when they already hold an S1, are resident in one of these countries, and only work in the UK but require healthcare cover for dependants

It’s one of several forms HMRC have moved online to make the application process easier for customers.

To ensure that the correct application form is used and based on your circumstances, use the tool National Insurance if you work abroad.

You can access it by:

1. Finding the ‘apply for a certificate heading’.
2. Selecting ‘start now’.

Wealthy External Conference Summary Notes

HMRC hosted the second Wealthy External Conference in our Croydon regional centre alongside representatives from HMRC’s Mid-Sized Business area. The conference was hosted by Deputy Director Kevin Hubbard (Wealthy) and Assistant Director Darren Boston (Mid-Sized Business). Representatives from professional bodies and agent firms were invited to join HMRC stakeholders to discuss Certainty and Owner Managed Businesses. The minutes from the conference have been published on GOV.UK.

Authorising a Tax Agent — helpful hints and tips for completing the 64-8 form

We’d like to share with you some hints and tips for completing the 64-8 form.

To help us process your request quickly and avoid any unnecessary delays you should:

• make sure the latest version of the 64-8 form is used
• not include a covering letter, unless it contains information that is absolutely necessary to process the form — add any essential information to your covering letter, do not write outside the boxes on the form
• make sure the form is typed or the handwriting is easy to read
• not provide any additional information in the form fields other than the requested information — for example in the ‘Agent code’ field only include the correct Self Assessment agent code, consisting of 6 characters 1111XX
• provide the correct agent codes for the relevant tax regimes, for example PAYE XX1111

If you want to include any company logos, do so in the white space at the top of the form.

Support for customers who need extra help

We have principles of support for customers who need extra help. These set out our commitment to support customers according to their needs, and underpin the HMRC Charter. 

Find out how to get help and what extra support is available. 

Contact

Complain to HMRC

You can complain to HMRC.

To make a complaint to HMRC on behalf of your client you must be appointed as their tax adviser.

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

Manuals

You can check the latest updates to HMRC manuals or subscribe to automatic notification of changes. You can also suggest improvements for pages of our manuals by using the feedback option.

Online

You can find online training material and useful resources through:

• the HMRC email updates and webinars for tax agents and advisers page
• our 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.

Agent forum and engagement

Income Record Viewer — CIS data 

Members of the Issues Overview Group have highlighted that agents and professional representative bodies might find it useful to see information on the Construction Industry Scheme (CIS) on the Income Record Viewer tool and we agreed to explore this further.  

After consultation with expert colleagues in our digital, security and operational departments we regret to say that we are unable to include CIS information in the Income Record Viewer tool.

There are a variety of reasons why HMRC feels that it is not viable to add CIS information in the Income Record Viewer most of which are rooted in concerns about the security requirements around the data.  

Members concerns have been fed back to the subject matter experts.  

Marriage Allowance 

We have completed our initial analysis of approximately 400 sample cases to better understand why cases are falling out of automation. These cases were reviewed manually, and this has taken some time. Our next action will be to undertake a more detailed analysis to identify the cause of this issue.  

Agent Forum

At the Issues Overview Group meeting on 7 August, members of the Agent Forum provided an update on the current effectiveness of the forum. Members were advised that until recently the way in which the service performed it did not align with the forum’s intended mandate. However, the measures implemented over the last few months, have been successful in stemming the number of posts to the forum. 

Moderation in particular, has enabled the team to filter content that does not meet its core objective. In addition, the team can continue to work collaboratively with the agent community to help identify and resolve widespread, systemic issues. This will allow the team to focus on ensuring that legitimate issues raised are dealt with efficiently. Work to improve the effectiveness of the forum is ongoing and constructive feedback and ideas on how the forum could be improved within its defined parameters are welcomed. 

We are keen to ensure the forum continues to be a collaborative channel for agents and professional bodies to raise systemic and widespread issues.

Contact Information for professional and representative bodies

• AAT: [email protected]

• ACCA Jason Piper: [email protected]

• AIA David Potts: [email protected]

• ATT: [email protected]

• CIMA: [email protected]

• CIOT Technical: [email protected]

• CIPP Lora Murphy: [email protected]

• CPAA Alison Hale: [email protected]

• IAB: [email protected]

• ICAEW Caroline Miskin: [email protected]

• ICAS Tax Team: [email protected]

• ICB Steven Worrall: [email protected]

• ICPA: [email protected]

• IFA: [email protected]

• VATPG Ruth Corkin: [email protected]