Agent Update Issue 115

Happy New Year! In this episode Norman Allison looks at the  IR35 opportunity to pause settlement, digital signatures, S455 L2P forms, CGT property returns, IR35 guidelines for compliance and BACS notifications.

For more information on this topic and more, please visit www.mercia-group.com for further details.

Transcript

Hello and welcome to the first tax podcast of 2024. My name's Norman, Norman Allison. I'm a member of the Mercia tax technical team and I thought I would run through one or two of the interesting articles that have appeared Let's go. In issue 115 of the Agent Update that was published just before Christmas.

In fact, it was published all the 20th of December. But before I launch into that, of course, just a reminder, as I'm sure you heard during the Christmas break, that we are having the budget that's going to be on Wednesday the 6th. Of March 2024 and of course we'll be updating you post budget with technical summaries of course of the main provisions within within the budget.

But let's just focus briefly on one or two of the articles that I had a look at this agent update. First of all, I noticed there was a little statement from the revenue about off payroll working rules, IR 35, and an opportunity to actually. Now, this actually goes back to the announcement that was made in the autumn statement.

That was back on the 22nd of November, 2033. That the government told us that they were going to introduce a change in policy that may well affect some of your clients. Affecting organizations with an open compliance check as part and parcel. Of the reformed off off payroll and working rules currently, of course, the position when the revenue currently find that a client has actually made a mistake in in applying the off payroll working rules.

What do they do? Well, they assess how much the deemed employer owes in income tax. In that and national insurance contributions, but with effects from the 6th of April, 24, the revenue will be able to take into account or in fact sets off the taxes that that worker up. Or indeed the intermediary have already paid against the amount that the deemed employer owned owes.

Now this policy actually will be applicable to income tax and national insurance contributions that the revenue assess on or after the 6th of April 20th. from off payroll working errors in payments since the 6th of April, 2017. But what this could mean potentially for some of your clients, some of your clients, organizations may well be able to pause the settlement of their open off payroll working compliance checks until after the 6th of April, 24.

But the revenue make it very clear. They will only consider this pause. If the compliance check has reached settlement and the organization has acknowledged in writing an error in applying the off payroll working rules that deemed employers gross liability including any penalty Has been agreed And the organization gives the revenue the information that they need to work out a set off Which will effectively be the name of the personal service company the company registration number and the workers full name or national insurance number so that may well be of interest for some of your clients applicable as I say as a result of these chain changes coming through what else I noted that I plowed through this agent update was a little article about digital or electronic signatures.

And this is effectively Revenue saying, confirming that they can accept digital or electronic signatures on 648s, P87s, Marriage Allowance Claims and R40s. Now they do go on to say that signatures signed on the screen of a digital service or displayed. in a keyboard type font type font. Yes, it will be accepted for your p87 marriage allowance claims are 40 64 8 etc.

But to be valid, very importantly, the taxpayer must have provided The signature themselves now on top of that they do emphasize that the electronic signatures would only be accepted for the types of claims that are talked about the 648s p87s etc anything else all other claims and paper tax returns may still will still require an original signature on them so that's an interesting development as I say with these digital or electronic signatures moving forward What else did I see?

Well, a little while to, in the agent bulletin there about directors loan repayments using the loans to participate as L two P forms, and what they basically said here is that due to recent gov UK upgrades, yes L Agents will be able to complete and submit forms L two P forms online. Using their agent services accounts.

Historically, of course, previously, only companies could submit online online through their government gateway accounts with agents and indeed others required to use the print and post applications. And they do conclude on this, that this new fully digital processes are going to be quicker. It's going to be more efficient.

Online submissions being sent directly to the correct person for review and process. So an interesting development there as well. Another article that I just saw was I thought what I've mentioned is about CGT. Capital gains tax on UK property papers returns. Now this goes back of course to this trial you may well remember.

This paper version of the capital gains tax on UK property return. With a company announced, of course, being available to download on a trial basis and that trial actually ran between the end of February 2023 and the end of September 23 and quite simply what the revenue told us like in relation to this Is that following the results of that trial, they have confirmed that the CGET on UK Property papers returns will now remain available on Gov uk, but they do emphasize.

That the forms do not replace the online service, and they are only intended to assist those who cannot report and pay the CGT using the online service. So again, an interesting development there, see that paper version of the return. is effectively available on online. One or two other final points. And I saw on this guidelines for compliance and against IR 35 here helping to comply with the reformed off payroll working rules.

And what the basic revenue have said here is that we published, we have published new guidelines for compliance, help to comply with the reformed off payroll working rules. And in effect, what they tell us in their guidelines is that these, they set out practical steps for you and indeed your clients to follow.

The guidelines would include, for example, best practice and examples of good systems and processes. Which can be adapted for each particular organization and they could help clients reduce the risk of actually making an error when determining a worker's status for tax purposes. Now again, what the revenue concluding relation to this is that these guidelines are all part and parcel.

Of the revenues ongoing commitment to publishing practical guidance to support customers in effect saying look help better You understand what the revenue considers to be good practice and clarify their view In complex widely misunderstood or new areas of the tax system So do have a look at that as I say updated guidance Final couple of points, I did notice there's an interesting development about stopping paperbacks repayment notifications for self assessment.

And in effect, what the revenue have said here is that they are changing. How they let us agents yourselves and clients know that they've issued a self assessment backs Electronic repayment there is no change. They emphasize to the repayment process itself So clients will still receive any monies owned to them through their bank account as per normal but with the fact from the 7th of december 23 The revenues have confirmed that they will no longer send letters informing you or your client of a self assessment repayment because they go on to say that these letters, after the rise, after the repayment has actually been made, Leading to some confusion and increased contact from customers, but they do emphasize again that they are making IT improvements to the digital notifications for self assessment repayments in situations where customers have opted to receive an email rather than a letter, and that means they are temporarily pausing these digital notifications.

They do conclude that customers will still receive repayments. Into their chosen bank account as per normal and of course you will be able to see any transactions In their online account and indeed the revenues app and of course as agents You can review transactions, of course on your client's behalf through the hmrcs Online service for agents accounts.

So brief a little update there as I say that was taken from the issue 115 of the agent update that was published just before Christmas as I say on the 20th of December 2023 That's your first Tax Podcast for 2024. We will have numerous other supports, including updates on the budget, but that's enough from me today.

Enjoy the new year and best of luck to you all with the January self assessment deadlines, of course. Thanks very much. Cheerio from me. 

Thank you for listening to the Mercia Podcast. For more information on this topic, please visit mercia-group. com.