Highlights from the broader tax news week ending 13 October, which includes: new HMRC guidance on joint and several liability notices and on avoiding non-compliant umbrella companies. HMRC extends access for employer client data, is to cease benefit payments to post office accounts and confirms that DIY housebuilders can reclaim VAT on blinds and shutters.
HMRC rolls out wider agent access to employer client data
Tax agents with up to 5,000 clients are now able to sign up to view the tax liabilities and payments of clients via their PAYE for employers accounts. Confirmation came in a post in HMRC’s agent forum, which also outlined further changes being made to the service following agent feedback. Currently when first signing into the service agents must click to confirm they act for a client before accessing the new data, HMRC says this process will now be removed “towards the end of October” and advises agents to only confirm clients they need to view before then. The agent forum post also confirmed that a timetable for further extending the new service to agents with more than 5,000 clients would be published on 25 October 2021. Find out more.
HMRC guidance on joint and several liability notices
Joint and several liability notices for directors, shadow directors and certain other individuals connected to a company were introduced as a tool to tackle tax avoidance, tax evasion in cases of insolvency and non-payment in cases of repeated insolvency by Finance Act 2020. It is worth noting that ‘repeated insolvency’ only refers to insolvencies occurring after 22 July 2020. HMRC has now issued guidance on these provisions including:
- an overview that covers when a notice might be given (including the commencement rules), penalties and safeguards;
- tax avoidance and tax evasion cases;
- non-payment cases; and
- cases where penalties have been issued for facilitating tax avoidance or tax evasion.
HMRC ceasing benefit payments to Post Office accounts
From 1 December 2021 HMRC will no longer pay tax credits, child benefit or guardian allowances into Post Office card accounts. Recipients of such payments must either provide alternative bank account details or set up a new bank account and notify HMRC of its details by 30 November 2021. If the change cannot be made in time, HMRC will suspend payments and pay the balance when it receives new bank account details. HMRC has reaffirmed the deadline after the Department for Work and Pensions extended its deadline for stopping payments into the same types of accounts by 12 months. Recipients of HMRC payments can use their personal tax account to provide alternative account details. Alternatively, those receiving child benefit can change their bank account details via gov.uk or by contacting the child benefit helpline on 0300 200 3100, whereas tax credits recipients can change their bank account details by contacting the tax credits helpline on 0345 300 3900.
DIY housebuilders can reclaim VAT on blinds and shutters
HMRC has updated its guidance on the DIY housebuilders scheme confirming that manual window blinds and shutters are allowable building materials and eligible for a VAT refund. It also confirms that this policy has applied from 5 October 2020. The amendment follows a First-tier Tribunal ruling in October 2020 that such items did fit the description of “building materials” under the VAT Act 1994 and the publication of Revenue and Customs Brief 5 (2021) which clarified HMRC’s approach to the VAT liability of manual blinds and shutters more broadly for the zero-rating of the construction of residential property.
New HMRC guidance on avoiding umbrella cos and tax avoidance
HMRC has published more guidance for agencies and businesses placing or using temporary workers to help them reduce the risk of engaging a “non-compliant” umbrella company. The guidance covers how an organisation might inadvertently become involved with tax avoidance and the consequences, before outlining seven steps that a business can take to avoid being involved with non-compliant umbrella companies. Steps include performing due diligence on supply chains and adding clauses to contracts, and link off to further support. Read the guidance in full.
ICAEW Know-How from the Tax Faculty
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