Need to know

Check your national insurance record before 5 April 2023: ICAEW urges those planning to claim the UK state pension to check their national insurance (NI) record before 5 April 2023. Currently, voluntary contributions can be made to plug gaps back to April 2006, but this will be curtailed from April. The Tax Faculty has created a checklist of actions.

Employers: Set up PAYE direct debits nine working days before collection: HMRC has informed ICAEW’s Tax Faculty of a delay in the processing time to set up any new variable direct debits (DDs) to pay employers’ PAYE from 22 March onwards.

Transitioning to the Customs Declaration Service before 30 November 2023: HMRC is writing to businesses that complete export declarations to make them aware of key dates for transitioning export declarations to the Customs Declaration Service.

ICAEW responds to proposals for changes in creative industry tax reliefs: The government has suggested merging five audio-visual tax reliefs and altering the mechanism by which businesses claim relief to an ‘above the line’ taxable credit.

Have your say: HMRC’s performance against Charter standards: ICAEW’s Tax Faculty is joining with other professional bodies to gather feedback on HMRC’s performance against standards in the HMRC Charter. Members are encouraged to complete a survey by the end of February.

Plastic packaging tax: proposed invoicing requirements scrapped: The requirement for a business to include a statement within an invoice showing that plastic packaging tax has been paid will no longer be introduced.

New HMRC interest rates for late and early tax payments: Following the Monetary Policy Committee decision to increase the Bank of England base rate to 4%, HMRC has announced increases to both interest charged on late paid tax and the rate paid on repayments of tax.

HMRC still failing to meet performance targets: HMRC’s performance update for October to December 2022 shows customer service standards for dealing with phone calls and correspondence are still not being met. There has been a worrying further increase in HMRC’s debt balance.

HMRC research: agent experience of digital services: Research by HMRC shows that more than half of agents have accessed clients’ online accounts, suggesting that agents’ needs are not being met. The findings tally with recent feedback to ICAEW’s Tax Faculty, but overall give a more positive impression than might have been expected.

HMRC releases latest corporate criminal offence data: Data provides a timely reminder that organisations of all sizes should have procedures in place to identify and mitigate tax evasion facilitation risks, says ICAEW.

Reactions to the EU Commission’s company taxation proposals: The EU Commission has proposed a common set of corporate tax rules across member states. Views expressed both by those giving evidence to the European Parliament’s subcommittee on taxation matters and CFE Tax Advisors Europe suggest that more work is required if the rules are to interact successfully with the other taxation systems that businesses face.

House of Lords reports on R&D reform: The Economic Affairs Finance Bill Sub-Committee report on draft clauses in the Finance Bill 2022-23 focused on the reforms to research and development (R&D) tax relief that apply from 1 April. These include changes to the definition qualifying R&D expenditure and administrative provisions for making claims.

Record numbers file self assessment tax returns on time: According to HMRC figures, more than 11.7m taxpayers filed their tax returns before the 31 January 2023 deadline. However, 600,000 taxpayers still missed it.

IFS residential conference: Taxing top incomes: Every two years, the Institute for Fiscal Studies holds a residential conference that aims to facilitate high-level knowledge exchange between practitioners, policymakers and academics on key areas of policy and practice. This year’s conference will be held in Oxford on 30-31 March, sponsored by CIOT and supported by Tax Journal.

Member helpsheets and guidance

Make time to pay arrangements online and avoid calling HMRC: Taxpayers that cannot pay their tax bill on time can set up a time to pay arrangement with HMRC. ICAEW’s Tax Faculty highlights the circumstances when this can be done online for self assessment and employers’ PAYE.

Corporates holding UK property prompted to check ATED valuations: HMRC has sent letters to companies asking them to check whether the valuations they have used to determine annual tax on enveloped dwellings (ATED) liabilities since 2018 are correct.

The role of tax in a green industrial plan: In early February 2023, the European Commission (EC) published ‘A Green Deal Industrial Plan for the Net-Zero Age’. Ahead of the Spring Budget, what tax policy ideas could the UK government take from the plan?

HMRC targets offshore corporate property structures: HMRC will soon have information from the register of overseas entities at Companies House. It plans to use this information to investigate taxpayers’ arrangements.

Basis period reform: How to deal with estimated figures: The fiscal year basis of taxation, applying from 2024/25, could mean unincorporated businesses that are unable to have an accounting date that matches the tax year will have to use estimated figures in their tax returns. How will this work and what are the penalty implications?

Tax Faculty responds to HMRC’s draft guidance on new R&D tax relief rules: In its response to HMRC’s draft R&D guidance, ICAEW’s Tax Faculty identifies a number of aspects and scenarios where considerable uncertainty remains.

Consultations

HMRC issues report on financial institution notice powers: HMRC’s report covers the impact and effectiveness of HMRC’s latest information power and highlights two potential uses not envisaged during the consultation.

Proposed revisions to ethical standards for tax planning: The International Ethics Standards Board (IESBA) has published an exposure draft for consultation, setting out proposed revisions to the IESBA ethical code in relation to tax planning and related services.

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