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Highlights from the broader tax news for the week ending 8 November 2023, including: HMRC’s marriage allowance calculator; council tax for HMOs; and pillar two education letters.

HMRC launches marriage allowance calculator

Marriage allowance can reduce tax for couples where one half of the couple earns less that the personal allowance and the other is a basic rate taxpayer. HMRC has launched a new tool to help couples check how much tax they could save by claiming marriage allowance. It should be noted that the tool works only in simple circumstances. Taxpayers will need both or their national insurance numbers to use the service.

Taxpayers should call the Income Tax helpline instead if they receive other income such as dividends, savings or benefits from a job. Taxpayers can also call the helpline if they do not know what their taxable income is. Read more.

Changes to council tax valuation of houses in multiple occupation (HMOs)

Landlords and tenants had raised concerns that individual rooms in HMOs have increasingly been assessed as separate units for the purposes of council tax valuation and therefore given their own council tax band.

Earlier in 2023, the Department for Levelling Up, Housing and Communities (DLUHC) published a consultation with the objective of provide greater certainty and consistency in the way that HMOs are treated for council tax, and to ensure that HMOs are banded as one property and have one council tax band. It also wanted to ensure that liability for council tax remains with the HMO landlord, and that their tenants are not subject to individual council tax bills.

The government has now published its consultation outcome. It proposes to amend legislation to ensure HMOs are valued as a single property for the purposes of council tax. For consistency, the legislation will adopt the definition of HMOs as set out in the Housing Act 2004.

New wave of pillar two education letters sent to large corporates

HMRC had previously issued letters in June 2023 to companies it considered might be required to register for the multinational top-up tax and/or domestic top-up tax. These taxes form the UK’s adoption of the pillar two global base erosion (GloBE) rules. A new batch of follow up letters are being issued during the weeks commencing 30 October and 6 November 2023.

From Monday 30 October, HMRC’s Customer Compliance Managers (CCMs) started to issue the letter to their large business groups that had not signed up to receive email updates.

On Friday 3 November, a bulk email was issued by HMRC to large businesses that were signed up to receive email updates by their CCMs and Wealthy and Mid-Sized Business Compliance (WMBC) customers that were signed up to receive email updates. This email was also sent to agents that have signed up to receive email updates.

From Monday 6 November, the letter is being issued to the remaining WMBC customers that did not sign up to receive email updates from HMRC.

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