Guidance

Issue 124 of Agent Update

Published 24 October 2024

Technical updates and reminders

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

Tax

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

Evidence required to claim PAYE (P87) employment expenses

We have implemented new evidence requirements for claimants to respond to the tax risk from ineligible employment expense claims. This new requirement came into effect on 14 October 2024.

We want to make sure that customers get the tax relief they are entitled to in as straightforward a way as possible. However, we also need to make sure that we identify where customers are not eligible and prevent them receiving payments they are not entitled to. 

When customers send us evidence for Pay As You Earn (PAYE) employment expense claims, HMRC will be checking all evidence and will confirm with customers whether they are entitled to tax relief.

More information can be found within our issue briefing on GOV.UK.

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 (SA) 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. You can prepare accounts to any date in the year, but you may find it easier to prepare accounts to 31 March or 5 April from 2024 onwards. This may make completing the tax return simpler as there will be no need to use 2 sets of accounts. 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 will be holding further Basis period reform webinars including further details on how to amend a return. These are currently due to be delivered on the 31 October, 7 November and 15 November 2024.

The SA return paper filing deadline is 11:59pm on 31 October 2024. If you are still awaiting an overlap relief figure, file the return using provisional figures, and amend this when the correct figure is received.

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. To help us deal with demand for this service as we approach the 31 January deadline, aim to use it for all clients by 31 December 2024.

If you have applied and have not heard back, you can check the progress of your request on GOV.UK.

Do not contact us directly to request a figure, this can slow down our response times for all. 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.

Guidance for filing Corporation Tax Returns

Quarterly instalment payer return requirements  

We have updated the Company Tax Return guide for boxes 326, 625, 630 and 631 to clarify the requirements for those paying Corporation Tax by quarterly instalments.

Boxes 327 and 328 are not to be completed by companies that fall under the quarterly instalment regime. Only use box 326 to indicate the number of associated companies on your client’s company tax return.

General reminders 

To enable HMRC to process your clients tax returns with minimum delay, adhere to the following:

• when submitting a repayment claim (for example, a loss relief claim), ensure you tick box 45 on the CT600 return to indicate that a repayment for an earlier or prior accounting period is due

• there is no requirement for you to submit an amended return for the previous accounting period that will be receiving the trading losses once we have processed the loss bearing return

• check that the start and end dates of the return period you are filing are correct, and that they match your client’s accounting period structure

• ensure that the supporting documents filed with the CT600 tax return (for example, computations and accounts) are in the correct format

• if you wish to adjust a return you have just submitted, allow at least 24 hours before attempting to do this

• double-check the company BACS details on the CT600 tax return before you file. If you are submitting an amended tax return for the same return period, also include the BACS details on your latest amendment

• by providing the BACS details on every return you submit, you will enable us to process any repayment due with minimum delay

Less than 6 months left to fill in National Insurance gaps to 2006

Your clients have until 5 April 2025 to fill gaps in their National Insurance records for all years from 6 April 2006 to 5 April 2018, which could boost their State Pension if eligible. After the deadline, your clients will only be able to make voluntary contributions for the previous 6 tax years, in line with normal time limits.  

Our online service and the HMRC app enables most customers to quickly and easily check if they have gaps in their National Insurance record, calculate if making a payment would increase their State Pension, and then make a payment if they wish to do so. 

Remind your eligible clients of the deadline and support them to act now.  

Updates to the Trust Registration Service (TRS) guidance

In the August Trusts and Estates Newsletter we announced new guidance was added to HMRC Trust Registration Service Manual (TRSM). The guidance replaced the ‘How to register’ help card issued by the trusts helpline.

We have now published additional guidance.

This guidance replaces the following help cards issued by the trusts helpline:

• how to claim a trust and authorise an agent
• getting the proof of registration
• updating a trust from non-taxable to taxable
• closing a trust

We’ve removed the TRS related help cards from the trusts helpline and recommend you delete any previous versions. Refer to the appropriate section of TRSM for guidance.

Correction to article published in Agent update 122 — Changes to Corporation Tax reminders, statements and receipts

HMRC are continuing to send non-statutory Corporation Tax letters. We will let you know before we stop sending any letters.

Article previously published in Agent Update 122.

Making Tax Digital

Get ready for Making Tax Digital for Income Tax

There are several steps to complete to make sure you and your clients are ready for Making Tax Digital (MTD) for Income Tax. By starting to get ready now, you can ensure you’re ready to support your clients who will be the first required to use MTD for Income Tax from April 2026.

You can use this step-by-step guide to help you prepare.

If you want to familiarise yourself with the service before April 2026 and try it out now, you can sign up to our testing programme. You can start with just one client and add more as your confidence grows.

No penalties for late quarterly updates will be issued during testing and you will have access to a dedicated support team to help you through the process.

Check if you need to use Making Tax Digital for Income Tax

We have launched an interactive tool this month. It’s quick and easy to use and will help you check if your client needs to use Making Tax Digital for Income Tax.

The tool asks questions about your client’s circumstances and provides you with an outcome based on your answers. It will advise you if your client will need to use MTD for Income Tax, and whether this will be from April 2026 or April 2027. It also includes information about what you should do next, and what to do if your client is digitally excluded.

Additionally, the interactive tool:

• provides you with the option to save or print a copy of the result
• enables you to provide feedback
• works well with mobile or handheld devices

We will separately confirm your client’s MTD for Income Tax status for 2026 to 2027 based on their 2024 to 2025 tax return.

More compatible software available

We have updated the list of software that works with MTD for Income Tax on GOV.UK to include new products that have recently become available.

The information provided will help you choose the software that meets yours and your client’s needs, whether you’re taking part in voluntary testing of the service, or if you’re getting ready for April 2026.There are several steps to complete to make sure you and your clients are ready for Making Tax Digital (MTD) for Income Tax. By starting to get ready now, you can ensure you’re ready to support your clients who will be the first required to use MTD for Income Tax from April 2026.

HMRC Agent Services

The Administrative Burden Advisory Board — Tell ABAB Report 2024

The Administrative Burden Advisory Board (ABAB) published their annual Tell ABAB Report 2024 on 25 September 2024. 

The report provides a commentary around the responses to this year’s Tell ABAB Survey, which gathers small business views and experiences of engaging with HMRC across a range of our services. 

This year had a record 10,052 responses, up 34% from the 7,500 responses to the 2023 survey.  

ABAB is passionate about listening to and understanding the needs of the small business community. ABAB members come from a range of businesses and professions, and their goal is to support HMRC to make the tax system quicker and simpler for small businesses.  

HMRC and ABAB encourage you to share the report with colleagues. If you would like to comment on the report, or help ABAB with their work, contact us by email:[email protected].

Help us protect workers from getting caught out by tax avoidance 

Our Tax avoidance ‘don’t get caught out’ campaign helps contractors spot the signs of bad tax advice and understand their pay arrangements. That way, they can steer clear of tax avoidance schemes.    

We’re encouraging tax agents and advisers, like you, to share this information with your clients. This includes personal stories and a short video for contractors using umbrella companies, along with online guidance and interactive tools to help us protect them from tax avoidance. 

Umbrella companies: what are the risks to contractors?

Contractors will find the support they need and learn how to:  

• recognise what tax avoidance is

• get help to get out of a tax avoidance scheme

• report a tax avoidance scheme

Details of tax avoidance schemes and their promoters to steer clear of are also published. This is not a complete list. There may be others that we cannot currently publish. Remember, HMRC never approves tax avoidance schemes for use.    

We would appreciate you sharing our supportive campaign resources across your newsletters and websites, including sharing or liking our posts on social media channels such as Facebook, LinkedIn, and X (Twitter). 

Changes to the Agent Dedicated Line

Having listened to agent representative bodies, HMRC is making changes to the service it provides for agents with Self Assessment (SA) and PAYE queries.

These changes, from 7‌‌‌ ‌‌October 2024, will help HMRC to better support agents who have complex or urgent queries.

Changes to service for agents from 7 October 2024

• one, combined helpline for agents’ queries relating to SA and PAYE
• to ensure a fair service, an agent can discuss a maximum of 5 customers on a call or webchat
• a webchat service solely for agents, covering both SA and PAYE (not repayment claims)
• a link to webchat will be available on GOV.‌‌‌‌‌UK
• agents calling the Agent Dedicated Line (ADL) will be presented with a new telephony option for progress-chasing SA repayments (the route for PAYE repayments will continue as is)

Reason for these changes

We encourage agents with routine enquiries to use digital services where possible. However, we recognise that not everything you need to do to support clients is available online and you may need to contact us.

We are working with agent representative bodies to understand more about what agents need and have used this feedback to enhance our services.

The Agent Dedicated Line (ADL) 

Agents who need help with complex or urgent queries can call the ADL or use the specialist webchat.

From 7‌‌‌ ‌‌October 2024 our experienced advisers will help with both SA and PAYE queries. We’re making this change as agents have told us that a combined resource would be a more efficient way of resolving complex cases.

This complexity, and agents needing to discuss multiple customers, can make calls longer and result in increased waiting times for others. To offer a fair service to as many agents as possible our advisers will discuss a maximum of 5 customers per call, or webchat session. To support the wellbeing of our advisers the number of queries might be less if the total call or webchat exceeds one hour.

The telephone number and opening times for the ADL will remain the same.

Webchat for agents

We introduced a limited webchat service for agents in October 2023, which we have continued to enhance. From 7‌‌‌ ‌‌October 2024 our agent webchat will cover both SA and PAYE. You can access it from the digital assistant.

If you have queries about repayment claims you must use different routes for these.

Repayment claims 

Last year more than a third of calls to the ADL were from agents, wanting to find out when a repayment claim is likely to be resolved. These calls are often within a few weeks of the claim being submitted and in large numbers. They mean our advisers are not able to help agents with more complex or urgent queries.

Agents must first use the Check when you can expect a reply from HMRC tool and check that the date has passed.

From 7‌‌‌ ‌‌October 2024, when the time given has passed, agents can:

• continue to use the webchat service for updates on PAYE repayments
• use a new telephony option for SA repayments

SA repayments will not be dealt with if the main ADL option is selected. This trial approach for SA will help us to gain insight into the type of repayments being claimed and inform our future plans.

Continuing to improve our services

We are grateful for the continued support of agent representative bodies in helping to shape our services to meet the needs of their members.

100 days to the Self Assessment deadline

There are roughly 100 days left until the Self Assessment deadline on 31 January 2025.

We’re encouraging agents to act now, to:

• help clients budget — filing early means they’ll find out what they owe and can budget ahead of the payment deadline
• reduce stress — avoid the last-minute rush and the risk of making errors
• peace of mind — you can confirm your clients’ tax affairs are in order and help them avoid any late filing penalties.

Look out for the 100 day reminders online and on social media and use it to nudge your clients into giving you the information you need to submit their tax return.

Not suitable for use as a dwelling — uninhabitable dwellings

HMRC has received a high number of claims for refunds of Stamp Duty Land Tax (SDLT) on the basis that a property, which is in need of repair, is not ‘suitable for use as a dwelling’. HMRC’s view is that over 95% of repayment claims submitted in this area are incorrect and have fallen well below the threshold we would expect.

Whether a property has deteriorated or been damaged to the extent that it no longer comprises a dwelling is a question of fact and will only apply to a small minority of buildings.

The Upper Tribunal recently decided in HMRC’s favour on this issue in Amarjeet Mudan and Tajinder Mudan v HMRC.

Primary findings from the Mudan Upper Tribunal decision include:

• being suitable for use as a dwelling does not mean the same thing as ready for immediate occupation
• you should assess to what extent the building has the fundamental characteristics of a dwelling, and is structurally sound
• if a property has previously been used as a dwelling, this will be relevant for considering whether it is suitable for use as a dwelling
• the question to consider is whether the works of repair and renovation have the result that the building no longer has the characteristics of a dwelling

We are taking action against tax agents who encourage or facilitate customers making false claims for expenses, rebates, or tax credits. We have a range of civil and criminal powers that we can use to disrupt or investigate, with a view to prosecution, those that cause harm to the tax system.

Read the guidance Not suitable for use as a dwelling — uninhabitable dwellings on GOV.UK.

Automatic enrolment duties towards festive season workers: raise your client’s awareness

If your client employs short-term staff for the festive season who are not on regular hours or incomes and are being paid through a payroll system, automatic enrolment legal duties may apply to them. This includes staff who work for them for a few days, weeks, or months.

Your client must work out who to put into a pension scheme by assessing staff individually, every time they pay them, taking into account what their ages are and how much they earn.

Any staff that are aged 22 to state pension age and earn over £192 a week or £833 a month, must be put into a pension scheme which your client must contribute towards. 

Find out more on The Pensions Regulator website.

Tax Agent Codes — clarification of previous email

We’re aware that our recent email, ‘Update for Tax Agent Code Managers’ sent to agents on 4 October 2024 has caused some confusion. 

The email asked agents to tell us their agent codes using an online form. We are asking for this information to help us improve the integrity of the information we hold. This is the first step in an iterative process aimed at improving our service to agents.

Although the email came from an email address we often use to communicate with customers, concerns were raised about the email’s provenance. We want to apologise for any confusion and offer some clarification on how to find the information we have requested.

How to find your agent code for SA and CT

If you are unsure of the agent codes you are using:

1. Access your ‘HMRC Online Services for Agents’ account, using your Government Gateway user ID.

2. On the main menu, select ‘Your HMRC Services’.

3. Select ‘Services you can use’.

Your agent codes will be visible underneath each service.

The code will be 6 characters in total, a mixture of letters and numbers. It is also the same code that is provided on the paper form 64-8 used to authorise an Agent.

How to find your agent registration number for VAT

For VAT, we will need your agent registration number (which will be in the format prefix letter /ARN 123 4567). You can sign into your Agent Services Account using your Government Gateway user ID to find this. Your Agent Registration Number will be displayed on your dashboard under ‘Welcome to your Agent Services Account’.

We understand that most VAT agents use their Agent Services Account when acting for their clients, however some Agents use the ‘HMRC Online Services for Agents’ account to deal with:

• VAT EU Refunds — for businesses established in Northern Ireland (NI)

• EC Sales List (ECSL)

• Notification of Vehicle Arrivals — to tell HMRC your client has brought a vehicle permanently into the UK

If you use both the Agent Service Account and the HMRC Online Services for Agents account, provide both your agent registration number and your agent code for VAT when completing the form. 

Completing the form

You can find a link to the online form in our original email that was sent on the 4 October 2024.

If you did not receive the original email or have not had chance to respond, we will be sending out a reminder email in early November 2024. 

If you received the email and you are not responsible for managing agent codes, pass the email to the appropriate person for action. We are requesting one response per legal entity, even if you have multiple codes or offices.

We would also like to stress that there is no risk of an agent code being cancelled in the absence of a response. The only codes we would suspend are those that agents advise are no longer required when they complete 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 options in the page footer.

Online

You can find online training material and useful resources through the HMRC email updates and webinars for tax agents and advisers page.

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

Updates on issues raises on the Agent Online Forum and Issues Overview Group

SA-39157 Removal of Unique Taxpayer Reference box from online form SA1

HMRC recently identified that entries in the online form SA1’s Unique Taxpayer Reference (UTR) box were causing some forms to be rejected. We can confirm where customers have an existing UTR, but do not include this on the form, the registrations are successfully matched to their account, and their existing or dormant SA records are properly reactivated. The UTR box has now been removed from the form to prevent some cases being rejected. Where a form SA1 is received without both a UTR or National Insurance Number they will continue to be dealt with manually upon receipt.

SA-46134 Missing 2024 to 2025 PAYE code numbers

Some agents have reported cases where clients 2024 to 2025 tax codes are not visible in the PAYE notice viewer. To investigate this HMRC need current examples. If you are aware of 2024 to 2025 tax codes issued within the last 34 days not showing in the PAYE notice viewer, use our technical support with HMRC online services to notify us.

We will need you to provide your client’s name and UTR a screen shot of the page and URL. Be aware that we will not be able to investigate any cases where the tax code was issued over 34 days ago, from the date of issue of the code.

SA-45153 Marriage Allowance

Professional Bodies and agents on Issue Overview Group have agreed the parameters for volunteer agents to test different scenarios of when Marriage Allowance claims are falling out of automation and incur a delay due to manual intervention. A request for volunteers will be published on the Agent Online Forum.

SA-51195 Reactivating Self Assessment accounts over the telephone

We received questions about reactivating Self Assessment accounts over the telephone. We can confirm that it is possible to do this.

Feedback on potential systemic issues

We are working with agents and representative bodies to understand more about what agents need and use your feedback to enhance our services.

You can use the Agent Online Forum to report and provide evidence on potential systemic issues. We use the forum to provide background information on issues and their resolution.

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]