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Highlights from the broader tax news for the week ending 6 July 2022, including: L-Day; tax credit renewals; ID for government gateway; HMRC survey on forms; residence indicator tool; CHIEF closed to new importers; and an updated partial exemption toolkit.

L-Day: 20 July

The Financial Secretary to the Treasury, Rt Hon Lucy Frazer QC MP, has made a written statement to Parliament entitled Finance Bill 2022-23: L-Day Update.

The statement notes that the Government will publish draft clauses for the next Finance Bill, which would largely cover pre-announced policy changes, on 20 July along with accompanying explanatory notes, tax information and impact notes, responses to consultations and other supporting documents.

Tax credits – less than a month to renew

With one month to go to the 31 July deadline, 323,700 tax credit claims still needed to be renewed to avoid payments stopping. 

This year, the renewal paperwork includes a flyer suggesting that claimants check whether they would financially better off claiming universal credit. An independent benefits calculator is available but it is important to get independent advice before changing as it is not possible to reverse the decision. 

GB driving licences now accepted as ID for government gateway

Many taxpayers have been unable to transact digitally with HMRC because they do not have the necessary ID. This problem has been exacerbated by the removal of Verify as an option for accessing HMRC online services. HMRC is now able to accept GB driving licences which will allow more taxpayers to set up government gateway accounts.

Taxpayers can now select two items from the following list:

  • tax credit claim details 
  • P60 or most recent payslips 
  • UK passport details 
  • information held on your credit file (such as loans, credit cards or mortgages) 
  • your self assessment tax return (in the last three years) 
  • GB driving licence (DVLA-issued) or NI driving licence (DVA-issued)  

HMRC survey on forms

An HMRC team working on improving print and post forms has put together a brief survey on agents’ experiences of using these forms and would be grateful if agents could take the 10 minutes needed to complete it. If you would be willing to have a more detailed discussion, please provide your email address in the relevant section of the survey.

New tax residence indicator tool

HMRC has launched a new tool to help taxpayers determine their tax residence status. The tool applies the statutory residence test (SRT) rules to help determine an individual’s residence status for tax purposes.

The tool is suitable for most people whose affairs are straightforward and covers the:

  • automatic overseas tests
  • automatic UK tests
  • sufficient ties tests

Detailed guidance on the SRT can be found in RDR3: Statutory Residence Test (SRT) notes, in particular RDRM11000 onwards.

Please send any feedback on the tool to caroline.miskin@icaew.com

CHIEF closes to new importers from 5 July 2022

The Customs Handling Import and Export Freight (CHIEF) system is closing for import declarations on 30 September 2022. As part of the transition, new importers are not able to register with CHIEF from 10am on 5 July 2022. Instead, they must register with the Customs Declaration Service (CDS) to make import declarations.

The Director General for Borders and Trade at HMRC states that the CDS, which replaces CHIEF after almost 30 years, will allow “all businesses to submit their customs documents digitally and safely”.

More information about using the CDS can be found on gov.uk.

HMRC releases updated VAT partial exemption toolkit

HMRC has published an updated VAT partial exemption toolkit – its guide for anyone completing a VAT return where the input tax relates to taxable an exempt supplies.

The main update relates to Making Tax Digital for VAT. The toolkit now states that all VAT-registered businesses (subject to listed exemptions) must keep digital VAT records and file their VAT returns using MTD-compatible software.

Other than changes to the content, the latest version has been released in a new file format with updated links to relevant guidance.

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