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ICAEW technical round-up: January 2023

Author: ICAEW Insights

Published: 27 Jan 2023

This month’s top technical stories include eligibility for a working from home tax relief claim, HMRC guidance on the new penalty regime for late submission and payment of VAT returns, and changes in store for R&D tax relief.

Need to know

Working from home tax relief claims may still be possible for 2022/23: ICAEW’s Tax Faculty highlights that employees should check whether they are eligible to make a claim.

New VAT penalty regime guidance published: HMRC releases guidance on the new penalty regime for late submission and payment of VAT returns. Guidance on late payment and repayment interest has also been published.

Further changes to VAT option to tax notification process: Notification receipt letters will no longer be issued with effect from 1 February 2023, says HMRC.

Changes in store for R&D tax relief: There are currently two R&D tax relief schemes available to businesses. Changes to these will come into force from April 2023, and there are proposals to redesign and overhaul these in the longer term.

Mandatory disclosure rules replace DAC 6 in the UK: Cross-border tax avoidance arrangement disclosure rules devised by the OECD (known as the mandatory disclosure rules, or MDR) will enter into force in the UK on 28 March 2023. Arrangements entered into on or after this date must be reported to HMRC under this regime.

HMRC trial: intelligent text messaging: HMRC is trialling sending SMS text messages to some individual callers to its helplines, directing them to online services and guidance. ICAEW is concerned that some taxpayers will get stuck in a ‘loop of doom’, making repeated calls and not being put through to an HMRC adviser.

Revamp form P11D and surrounding processes, says ICAEW: ICAEW’s Tax Faculty has called on HMRC to improve form P11D, used to report benefits in kind, to simplify administration for HMRC, employers and employees.

More to be done with tax policy to help achieve net zero: ICAEW’s Tax Faculty reflects on the tax recommendations contained in the government’s net-zero review chaired by Chris Skidmore MP, the former energy minister.

PAYE payment by variable direct debit generates late payment notices: Late payment notices will be suppressed, but not immediately.

A1 certificates: pandemic-related changes to work location can still be disregarded: A1 certificates are issued by HMRC for employees and the self-employed working across borders as evidence that the worker does not need to pay social security contributions in another country.

HMRC to introduce more controls over repayment agents: The government will legislate to ban the use of deeds of assignment and introduce other measures to address problems with repayment agents. Care will be needed to avoid unintended consequences for chartered accountants and tax advisers.

PAC makes recommendations to close the tax gap: Key issues raised in the Public Accounts Committee report on HMRC performance in 2021/22 include resourcing of compliance activity and customer service.

HMRC relief statistics: costs in line with tax receipts: The annual release of tax relief statistics, published on 12 January 2023, shows a significant rise in the cost of some reliefs. However, overall, the percentage increase in cost between 2020/21 and 2021/22 was less than the increase in tax receipts over the same period.

HMRC campaign targets income from online marketplaces and digital content: Letters are being sent out to taxpayers from the week commencing 16 January that invite recipients to correct their tax affairs, where necessary, by making a digital disclosure.

Member helpsheets and guidance

Pre-Christmas MTD ITSA announcement: the aftermath: ICAEW’s Tax Faculty asks how businesses can make best use of the additional time before they have to ‘go digital’.

HMRC issues certificate of tax deposit reminders: HMRC has been issuing letters to remind taxpayers to use certificates of tax deposit (CTD) before the scheme closes on 23 November 2023.

Prepare for changes to share scheme reporting in 2023: HMRC’s latest Employment Related Securities Bulletin highlights that the completion of more data fields will become mandatory from 6 April 2023.

Agent Update 103: points of interest: ICAEW’s Tax Faculty summarises issues and reminders for agents including: a new agent toolkit; CGT 60-day paper returns; updates to HMRC’s app; tax returns for deceased individuals; webinars; HMRC’s online forms; COVID-19 VAT deferrals; and XBRL tagging of 2022 accounts.

Agent Update 104: points of interest: ICAEW’s Tax Faculty highlights key news and reminders for agents including: new option for identity verification; withdrawal of FBI2; crypto gains and losses; and voluntary class 2 national insurance contributions (NIC).


HMT consults on single research and development tax relief scheme: An eight-week consultation has been launched following the Autumn Statement announcement of a simplified, single RDEC-like scheme.

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