Need to know

Autumn Statement: Threshold freezes create stealth tax increases: The Chancellor has confirmed that headline rates of income tax and capital gains tax (CGT) will remain at their current levels. However, there were various reductions in key thresholds and allowances, and several others were frozen for longer than previously announced. ICAEW’s Tax Faculty summarises the key tax announcements.

HMRC nudge letters: Persons of significant control: HMRC has issued a new round of one-to-many letters aimed at persons of significant control (PSCs) who have declared income of below £100,000 or who have not submitted a tax return.

ICAEW forms duties subcommittee: New Tax Faculty group to focus on customs and excise duties as well as other related indirect taxes such as plastic packaging tax.

Positive findings by NAO regarding digital services tax implementation: The National Audit Office (NAO) confirmed that implementation of the digital services tax (DST) has meant that most digital groups are now paying significantly more UK tax. Receipts from DST are up by 30% on HMRC’s initial forecasts to £358m for 2020/21.

Payroll: reporting advances of salary: Advances of salary will be able to be reported via PAYE real time information (RTI) as part of regular earnings rather than when advances are paid.

HMRC to transfer remaining businesses to MTD VAT: The online VAT return is now closed to most businesses. Businesses that have not yet signed up to MTD VAT will be automatically transferred.

New ways of working: tax legislation needs to adapt: The explosion in home and remote working caused by the pandemic means that tax, social security, and visa rules need updating.

HMRC interest rates to increase again: Following the Monetary Policy Committee decision to increase the Bank of England base rate to 3%, HMRC has announced increases to both interest charged on late paid tax and the rate paid on repayments of tax.

Wyman Symposium: the challenge of regulating the tax profession: This year’s Wyman Symposium, held on 1 November, covered potential developments that could lead to increased regulation domestically and internationally.

Member helpsheets and guidance

Changes and issues contained in HMRC’s Agent Update: ICAEW’s Tax Faculty highlights current issues and reminders for agents including: payments by card reader, voluntary class 2 NIC on 2020/21 tax returns and a new advance assurance online service.

HMRC rolls out the income record viewer service for agents: After a false start earlier in the year, agents can now use the income record viewer service to obtain access to individual clients’ PAYE information. Clients need to accept a digital authorisation request.

HMRC launches interactive guidance to help explain tax codes: HMRC has introduced new interactive guidance to help taxpayers navigate their P2 coding notices and understand their tax position.

HMRC updates guidance on VAT domestic reverse charge for construction: Guidance on the supply of scaffolding has been added. Guidance in several other areas has been updated.

HMRC launches online form to support VAT return repayment claims: Businesses, or their authorised agents, can now use an online form to provide supporting documentation if HMRC queries a VAT repayment return.

HMRC issues disguised remuneration loan charge discovery assessments: ICAEW recommends that taxpayers seek independent advice if they receive an assessment as part of this HMRC campaign.

Clarity on interest charges on PAYE paid by direct debit: HMRC confirms that late payment interest is charged from normal due date and then cancelled once payment is received by direct debit a few days later.

Report makes recommendations to reduce tax fraud: Joint report by the All-Party Parliamentary Group on Anti-Corruption & Responsible Tax (APPG) and TaxWatch highlights an enforcement gap in HMRC’s handling of the issue.

Help HMRC develop agent accounts: HMRC is asking agents to help it develop agent accounts, in particular managing access groups and preparing for multi factor authentication.

OTS recommends simplifying tax on property income: The Office of Tax Simplification has put forward numerous recommendations for technical and operational changes to the property tax system, including on MTD ITSA, furnished holiday lettings, and the tax treatment of repairs, replacements and improvements.

EU Tax Policy update: Members may encounter a number of policy proposals and developments across a range of tax matters taking place within the EU. ICAEW’s European Office summarises the forthcoming and published proposals.

IFRS 17: Tax transitional rules for long term insurance businesses: Regulations laid before the House of Commons on 10 November 2022 mitigate the tax consequences of adopting IFRS 17 by spreading certain amounts that would otherwise be subject to corporation tax immediately on adoption over 10 years.

HMRC invites selected wealthy taxpayers to pre-filing telephone call: Invitations for a call with a customer compliance manager before filing 2021/22 tax returns are expected to be sent out in November. This is a follow-on from a ‘test and learn activity’ carried out earlier this year.

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