Employer PAYE: recurring direct debit functionality

HMRC is developing functionality to allow employers to set up a recurring direct debit to pay PAYE and national insurance liabilities. The current system allows only a single payment to be made by direct debit.

Available from around mid-September 2022, there will be a new link in business tax accounts to "Set up a Direct Debit". Once set up, the link will change to "Manage your Direct Debit". An employer will be able to view, change or cancel the direct debit online.

Agents cannot set up direct debits on behalf of clients, as banking rules require direct debits to be set up by a signatory to the bank account.

Employer PAYE liabilities and payments agent viewer

HMRC has been extending the service that gives agents access to employer PAYE accounts on a rolling basis. HMRC expects to remove current restrictions and allow all agents with PAYE online for agents enrolment to access the service soon.

PAYE settlement agreements digital service

HMRC has redesigned the PSA1 form and introduced an electronic submission route.

HMRC is encouraging all employers and agents to submit PSA1 forms online. Unlike the paper version, the digital PSA1 allows employers to submit one form for all employees, regardless of which country they live in.

Controlling staff access to the ASA

The agent services account (ASA) currently gives all staff within a practice access to all client records and tax services – if they have the ASA sign in details and know the right client identifiers. HMRC is developing ‘granular permissions’ functionality in the ASA that will allow agents to control which staff members can access which client records.

The new functionality is primarily aimed at small to medium sized agents, with up to 1,000 staff. To prepare for the release of this functionality, firms should ensure that they have an administrator role set up in their ASA. Only administrators will have access to this new feature, in the "Manage Account" section on the ASA home page.

Administrators will be able to create access groups and add selected clients and team members to them. Searches by client name, tax reference and tax service will be possible.

HMRC has been testing this new feature with agents and feedback has been positive. The new functionality will be released to a small number of agents before being rolled out fully.

The Tax Faculty welcomes the new functionality. After years of requests, it means that a proper client list will be available in the ASA.

Updates to the VAT registration service from 1 August

HMRC has developed a new VAT registration service (VRS). It has been used by more than 37,000 traders to register their own business. The new service will be switched on for agents on 1 August 2022. The old VAT registration service will be closed from that date.

Key considerations are:

• As well as being registered for VAT, the trader is automatically signed up to Making Tax Digital (MTD) VAT. The need to sign up separately for MTD VAT is removed for traders registering using VRS.
• Incomplete, unsubmitted VAT applications should be completed by 17:00 on 31 July 2022, or restarted from 1 August using the new service. Any partially completed, saved applications on the old service will be lost after this time. The new service saves applications for up to four weeks. In some cases, it may be more efficient to wait for the new service to be delivered on 1 August to obtain the benefit of the improved functionality, including combined sign up to MTD VAT.   

Corporate interest restriction returns - electronic filing is mandatory from 1 September

Functionality to file corporate interest restriction (CIR) returns electronically has been available for some time. From 1 September 2022, it will be mandatory to use one of the two electronic routes.

The two options are:

• The online form; and
• A commercial software product than uses the relevant APIs to provide the functionality.

The Corporate Interest Restriction (Electronic Communications) Regulations 2022,  SI 770/2022, which gives effect to this requirement, was laid before parliament on 7 July 2022. From 1 September 2022, HMRC will not accept CIR returns, appointments or revocations by email, post, or as an attachment to a corporation tax return.

Service changes covered previously

Agent update 98 includes reminders of changes that were covered previously in tax news:

New tax residence indicator tool

A new tool to help taxpayers determine their tax residence status. It is suitable for most people whose affairs are straightforward and covers the automatic overseas, automatic UK and sufficient ties tests.

Moving to the Customs Declaration Service by 30 September 2022

The Customs Declaration Service is replacing the old Customs Handling of Import and Export Freight (CHIEF) system. After 30 September 2022, businesses will no longer be able to make import declarations on CHIEF and will need to make their import declarations on the Customs Declaration Service instead.

Government Gateway — Great Britain driving licence added as additional evidence source

HMRC has added Great Britain (England, Scotland, and Wales) driving licences as an additional option for confirming identity when using HMRC online services.

• Read Agent Update 98 in full