Highlights from the broader tax news week ending 23 June, which includes: remind on switch to digital P800 and PA302s, corrections to legislation covering SDLT rates for non-residents and changes to IHT401 and exporting merchandise in baggage from 1 July 2021.
Digital P800s and PA302s
From May 2021, personal tax account (PTA) users who have opted for paperless communication will receive P800 PAYE Tax Calculations and PA302 Simple Assessments digitally, through their PTA. Taxpayers will be sent an email alerting them to the need to check their PTA. ICAEW’s Tax Faculty is concerned that some taxpayers will fail to check their PTA, but acknowledges that this change will be helpful for those that are due a repayment that needs to be claimed through their PTA. The change does not affect agents who will continue to receive paper copies of these calculations.
SDLT non-resident rates – correction to legislation
Finance Act 2021 reflects government amendments to correct two errors in the underlying legislation for the new rates of stamp duty land tax (SDLT) which have applied to purchases of residential property in England and Northern Ireland by non-UK residents since 1 April 2021. The new rates are 2% above those payable by UK residents.
The amendments correct an error in how the non-UK control test applies in relation to de minimis interests when determining whether a UK-resident company is liable to pay the surcharge and provide for UK-resident corporate trustee purchasers to be exempt from the close company and non-UK control tests. The amendments can be found on pages 73 and 74 with explanatory notes.
HMRC has confirmed that those who have not yet submitted a SDLT return may do so based on the amendments having effect from 1 April 2021. Those who have already submitted a return based on the original legislation may amend that return and obtain a repayment of any tax overpaid.
Changes to IHT401
The IHT401 form Domicile outside the United Kingdom has been updated. HMRC now requires more detailed information when a claim is made that the deceased was not domiciled in the UK. The additional information requested is:
- Full 20-year UK tax residence history is now required for those that were UK tax resident during the six tax years before death, rather than four (question 6).
- The deceased’s domicile of origin is now required (new question 9).
- The form now requests details of addresses at which the deceased stayed during visits to the UK, as well as the length of and purpose of the visit (question 13).
Changes to exporting merchandise in baggage from 1 July 2021
The process for exporting goods in baggage is changing. When a full export declaration is submitted in the Customs Handling of Import and Export Freight (CHIEF) system, the goods will be automatically ‘arrived’. This means traders will no longer need to present their goods to a Border Force officer at airports or ports of departure with red channels. Ports without red channels will no longer require completion of a C1601 for the National Clearance Hub (NCH) to arrive the goods. If a full declaration is not required, an online declaration can be made in the five days before leaving with the goods.
This change applies only to CHIEF users. Traders on the Customs Declaration Service to move goods from Great Britain to Northern Ireland should continue using the current process. Similar changes will be made for Customs Declaration Service in the future.
More information about the rules for Merchandise in Baggage can be seen in a new HMRC video and read in the travellers’ communications pack. For more information, read the full Taking commercial goods out of Great Britain in your baggage guidance.
This guidance is created by the Tax Faculty, recognised internationally as a leading authority and source of expertise on taxation. The Faculty is the voice of tax for ICAEW, responsible for all submissions to the tax authorities. Join the Faculty for expert guidance and support enabling you to provide the best advice on tax to your clients or business.