HMRC's latest updates for agents
20 April: ICAEW’s Tax Faculty highlights current issues and reminders for agents, including: non-resident landlords, quarterly instalment payments, tax credit renewals, child benefit claims, ATED and the construction industry scheme.
The following items were covered by HMRC in Agent Update 77 and elsewhere on gov.uk.
Non-resident corporate landlords and corporation tax
HMRC has now written to the majority of non-resident landlord companies to let them know their Corporation Tax Unique Tax Reference (CT UTR) that will replace their current income tax self assessment UTR.
If your client has not received their letter by 30 June 2020 or you need to file a CT return by 30 June 2020, please provide HMRC with a new signed 64-8 agent authority for corporation tax, together with a covering letter. You should quote the SA UTR on the covering letter, but leave the space for the UTR on the new 64-8 blank.
Please send your letter and 64-8 agent authority to: Charities, Savings and International 1, HM Revenue and Customs, BX9 1AU.
Corporation tax quarterly instalment payments
Companies that make quarterly instalment payments for corporation tax will need to estimate their liability and consider the fact that the CT rate is to remain at 19% and any reduction in their expected CT liability due to the impact of COVID-19. Further detail can be found in the agent update.
Where companies consider a repayment is now due, claims should specify the amount that the company considers is repayable together with the grounds for that belief.
Tax credit renewals
This year, HMRC will automatically renew all tax credit claims apart from those identified as high risk. This means that around 3.9m tax credit recipients will have their claim auto renewed. These claimants will receive an auto renewal pack and they will only need to contact HMRC if their details differ from the pack.
The 150,000 claimants from whom HMRC will need more information will be sent a reply-required renewal pack and will be expected to complete it in the normal way.
More guidance can be found at gov.uk/manage-your-tax-credits..
Please be aware, if any of your clients are currently tax credit claimants and they claim universal credit, their tax credit award will be closed from the day before their universal credit claim is made. Once they have made a universal credit claim it is not possible to go back to tax credits (see also COVID-19: increased support available through tax credits and universal credits).
Child benefit claims
Parents of new-borns can still claim child benefit despite the outbreak of COVID-19 prompting the closure of register offices. Child benefit has the added benefit of triggering National Insurance credits for non-working parents until the age of 12 and national insurance numbers for the child at age 16.
Taxpayers who have not been claiming child benefit because they are liable to the high income child benefit charge whose income has fallen may wish to consider making a claim or electing to receive the benefit if they did make a claim but elected not to receive payment.
Annual tax on enveloped dwellings
Annual tax on enveloped dwellings (ATED) returns for the year to 31 March 2021 and any tax due for the year must be dealt with by 30 April 2020. Looking ahead, a revaluation exercise will also be required when the ATED charges will be rebased to 1 April 2022 values.
Construction industry scheme
HMRC has published a blog with top five tips for tax agents with clients in the construction industry scheme.