Highlights from the broader tax news for the week ending 21 June 2023, including: employer updates; income record viewer video; deadline to create agent services account for repayment claims; raising awareness of tax avoidance schemes; corporate interest restriction reporting companies; and interactive guidance and gform for self-employed taxpayers working abroad.
The June 2023 issue of Employer Bulletin has been published. It contains articles on:
- paying PAYE and Class 1A (the 22 July electronic payment deadline is a Saturday and use the correct suffix (2313) for payments of class 1A NIC);
- reporting diesel cars on P11D (check Type F or D);
- filing forms P11D online (lists are no longer allowed);
- national minimum wage (for interns and those on work experience); and
- employer direct debits (which must be set up at least six working days before due date).
Agent Update 109 also contains some updates for employers. The employment status guidance for locum pharmacists is to be withdrawn with effect from 30 June 2023 and the apprenticeships care leavers’ bursary rate will increase from £1,000 to £3,000 for new starters from 1 August 2023.
Income record viewer client video
HMRC has published a YouTube video: how to authorise an agent for income record viewer. This may assist clients to complete the digital handshake. However, it will not help clients who are unable to set up government gateway credentials. Digitally excluded clients can phone HMRC and ask to be referred to the extra support team who will help them complete the authorisation.
Agents making PAYE repayment claims need an ASA
From 2 August 2023, agents that claim PAYE income tax repayments on behalf of clients must have an agent services account (ASA). This change does not affect income tax repayments claimed through self assessment. HMRC is in the process of updating relevant forms such as the P87, P85 and R40 to include a box for the account reference. Most ICAEW firms will already have an ASA; those that don’t should apply for one straight away as it may take some time to set up the account.
HMRC reminds agents of ways to help clients stay clear of tax avoidance schemes
HMRC has used Agent Update 109 to remind agents of the places where it lists information about tax avoidance schemes, promoters, enablers and suppliers. It says that agents can help protect their clients from the risks of tax avoidance by sharing HMRC’s campaign messages, including the ‘don’t get caught out’ campaign.
The update also highlights Spotlight 62, which provides details of an arrangement under which dividend income is diverted from the shareholders of owner-managed companies to their minor children. HMRC believes that this arrangement is caught by the settlement rules at s619, Income Tax (Trading and other Income) Act 2005 onwards and that it is therefore not effective in utilising the children’s personal allowance and dividend allowances.
Corporate interest restriction — HMRC will no longer ‘automatically’ appoint a reporting company
Those businesses caught by the corporate interest restriction (CIR) rules are able to appoint a ‘reporting company’. This entity is then required to submit group-level CIR returns going forwards. Where a company does not itself nominate a reporting company by the required deadline (generally 12 months from the end of the period), HMRC will no longer make this appointment on the company’s behalf.
This might disadvantage taxpayers given certain favourable treatments are only available to those groups with a reporting company. However, HMRC will continue to use its powers to appoint a reporting company where it considers there is a risk that tax is at stake.
New interactive guidance and gform for self-employed taxpayers working abroad
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.