Highlights from the broader tax news week ending 17 March, which includes: new one-off process introduced to allow agents to make appeals for late filing of 2019/20 self assessment tax returns for multiple clients at the same time; an extension to the deadline for trusts to register with the TRS and an update on the VAT liability of the supply of digital newspapers prior to May 2020.
Six-month delay to UK import border controls
On 11 March the UK government confirmed that the introduction of full import border controls has been postponed for six months. The change means that full declarations at the point at which non-controlled goods are imported into the UK from the EU will not be needed until 1 January 2022. Guidance from the government confirms that while customs import declarations are still required, the option to delay for up to six months after the goods have been imported has been extended until 1 January 2022. Meanwhile Safety and security declarations will not be required until 1January 2022. Find out more.
Late filing penalties – agents can make bulk appeals
HMRC has started to issue £100 late filing penalty notices to the approximately 1.1m taxpayers that failed to file their 2019/20 self assessment tax returns by 28 February 2021. The notices are expected to be received by taxpayers between 17 March and 24 March 2021. HMRC is introducing a process that will allow agents to make a single appeal against the penalties for up to 25 clients.
Further details will not be available until about the 24 March, but ICAEW’s Tax Faculty understands that agents will need to complete a new paper template. This process will only be available for 2019/20 filings and for appeals where the reasonable excuse for late filing is COVID-19 related. Appeals on other grounds will need to be made by completing an SA370 (online version available only to taxpayers).
Non-taxpaying trusts given longer to register
The requirement to register on HMRC’s trust registration service (TRS) has been extended to non-taxpaying trusts. The regulations, introduced in SI 991/2020, implement the EU’s Fifth Anti-Money Laundering Directive into UK law. The original deadline for existing trusts to register was 10 March 2022, however, this was on the basis that the TRS would be open for registrations in spring 2021 and this is now not expected until summer 2021. HMRC has indicated that the extension will provide trustees and agents with approximately 12 months from the date that the service is available to register. HMRC will provide further details in due course. Those who would like to be involved in testing the system should contact email@example.com.
Email alerts for HMRC service changes
In response to a recent ICAEW Tax Faculty query over service availability, HMRC has recommended that agents needing to stay up to date with any service changes set up email alerts from gov.uk. Once you have subscribed you can select which areas you want to receive updates on.
CA overturns decision on VAT treatment of enewspapers
From 1 May 2020 the supply of digital newspapers and publications is zero-rated for VAT, however, the liability of supplies before that date is the subject of litigation between HMRC and News Corp. On 11 March HMRC published a brief outlining the latest developments in the case. On 28 January, the Court of Appeal (CA) overturned the Upper Tribunal decision that had found the supply of digital newspapers should be zero rated for VAT purposes. The CA rejected the UTT’s conclusions, finding that “the clear legislative intent of the wording in Group 3 of Schedule 8 is to include tangible items only (goods) and to exclude non-tangible items (services)”. As News Corp has sought permission to appeal the decision to the Supreme Court, HMRC suggests that organisations may want to protect their position by making claims for overpaid VAT based on the UT decision. Read the brief.
ICAEW Know-How from the Tax Faculty
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.