HMRC Stakeholder Digest - 1 December 2023

1 Dec 2023

Please see the following message from HMRC, which we are sharing for information:

The HMRC Stakeholder Digest provides a round-up of our latest news and updates, which we’d be grateful if you could share with your clients, customers, or members.

1. Spotlight on Making Tax Digital

In the Autumn Statement we announced several simplifications to the design of Making Tax Digital for Income Tax for Self Assessment (ITSA) following the review into the needs of small businesses. You can read about the outcome of the review on GOV.UK.  

As part of the review, we spoke to a wide range of software developers, tax agents, businesses, and landlords. We have listened to what you told us and have made practical decisions to improve the design of the Making Tax Digital for ITSA service. This is an important step forward in delivery and in ensuring improvements for customers. These changes will: 

  • simplify the requirements for all taxpayers providing quarterly updates, and for taxpayers with more complex affairs, such as landlords with jointly owned property; 
  • remove the requirement to provide an End of Period Statement; 
  • exempt some taxpayers, including those without a National Insurance number,
  • enable taxpayers using Making Tax Digital to be represented by more than one tax agent. 

We have made the decision to keep the further mandation of businesses and landlords with income below £30,000 under review. This group will be able to register voluntarily so they can benefit from Making Tax Digital for ITSA. 

In addition, from April 2024 customers who volunteer for the Making Tax Digital service will benefit from the new, fairer system of penalties. These will begin in a simplified form from April 2024, for annual obligations only. Also known as Penalty Reform (PR), these penalties provide points-based sanctions for late submission of returns and more proportionate penalties for late payment of tax. PR was introduced for VAT customers from 1 January 2023.   

We’ll continue to work with you to ensure Making Tax Digital meets the needs of all users, including through a thorough testing programme that we will be scaling up in the new year, so many more customers can take part. 

I would like to thank everyone who took part in the review and helped HMRC to continue to improve Making Tax Digital for ITSA. HMRC expects to consult in December on draft regulations covering these simplifications. The final regulations will be laid in February 2024, moving us closer to introducing Making Tax Digital for ITSA in April 2026 as planned. 

Jonathan Athow, Director General, Customer Strategy and Tax Design

Latest news and updates

2. Self Assessment payments on the HMRC app treble to £121 million

The ease and convenience of the HMRC app means more people are using it to pay their tax bill. Payments on the app have trebled to £121 million since April 2023.     

Self Assessment customers can also use it to set reminders to pay their tax bill and find information to help them complete their tax return. This includes finding their income and employment history, Unique Taxpayer Reference, and National Insurance number.

Our HMRC app YouTube channel includes videos demonstrating the benefits of the app and how to use it.  

Please encourage your customers and members to download the free HMRC app and read our latest press release on ‘Self Assessment Payments via the HMRC app treble to £121 million’ on GOV.UK. 

3. Prepare for changes for goods moving from the island of Ireland to Great Britain – 9 weeks to go 

From 31 January 2024 some goods will face full customs controls when moved directly from Irish ports to Great Britain. Traders, or anyone who moves goods on their behalf, will need to be familiar with the new process. 

Goods will need to complete import processes if they are being imported directly from Ireland into Great Britain (not moving from or through Northern Ireland). 

Goods moving from Northern Ireland to Great Britain through Irish ports will also have to complete import processes if they are: 

  • non-qualifying Northern Ireland goods 
  • excise goods (alcohol, tobacco, and energy products) or 
  • goods which do not move directly to an Irish port once they have left Northern Ireland – for example, goods which are held in storage in Ireland. 

Traders can find out more about the steps they need to take in the Border Target Operating Model on GOV.UK. If your clients and members have any questions, they can visit Imports and exports: general enquiries on GOV.UK. 

4. Get help to comply with your responsibilities: reformed off-payroll working rules (IR35) and umbrella companies

We have published three new products to improve customers’ understanding of their responsibilities when there are contractors in a labour supply chain. Please share these guidance pages with your clients and members who would find them helpful.

Our new Guidelines for Compliance will help organisations understand what we consider good practice (or poor practice) when preparing for and making status determinations for off-payroll workers. You can find the full guidance on GOV.UK at ‘Help to comply with the reformed off-payroll working rules (IR35)’. 

Working with HM Treasury and the Department for Business and Trade, we have also published new guidance for employment businesses who work with umbrella companies. This guidance will help them to understand their legal responsibilities, support umbrella company workers in their supply chains and protect their business by reducing their risk of non-compliance. 

Finally, our updated guidance for umbrella company workers working through an umbrella company on GOV.UK now includes checks that workers can do to identify and avoid fraudulent umbrella companies.  

5. Update on OECD Pillar 2 Reform of the International Tax Framework

In October 2021, the Organisation for Economic Cooperation and Development (OECD) agreed to a two-pillar solution to reform the international corporate tax framework in response to the challenges of digitalisation. 

We have contacted agents and businesses we believe are in the scope of Pillar 2 to update them on the latest developments. In November we issued our latest update, which covered:

  • a new online service to enable businesses to meet their obligations under the new taxes Multinational Top-up Tax (MTT)and Domestic Top-up Tax (DTT).The first phase of this system, covering registration, will be released in Spring 2024
  • new legislation: the Finance (No. 2) Act 2023 was enacted earlier this year and implemented MTT and DTT new draft guidance: multinational top-up tax and domestic top-up tax for consultation which was published on GOV.UK in July 2023 providing an overview of the new taxes. The consultation period has ended, and we are reviewing the responses we receive
  • the most frequently asked questions that have been sent to us with our responses.

Customers can contact the Pillar 2 Compliance team by emailing [email protected] with any problems or queries. 

6. Share your feedback on HMRC’s Annual Report and Accounts   

Through our Annual Report and Accounts we seek to give clear and transparent information about our performance and show how we delivered against our vision and strategic objectives over the last financial year.

We want your feedback to help us make sure we’re doing this in the best possible way. How do you use our annual report, and does it give you the information you need in the most accessible way?

We’ll use your feedback to inform the development of future reports – and our approach to performance reporting more generally.

Please complete our short ‘Feedback Form’ and share it with your members, to give them the opportunity to comment. 

If you have any questions about HMRC’s Annual report and Accounts, you can email [email protected].

Messages on behalf of Other Government Departments

7. Get involved in the ‘Made in the UK, Sold to the World Awards 2024’

The Department for Business and Trade (DBT) has opened its ‘Made in the UK, Sold to the World Awards 2024’ for entries, to recognise the global trading success of small businesses from across the UK. 

The awards aim to

  • help to increase the focus on exporting amongst businesses
  • encourage more businesses to export by showing that everyday businesses of all sizes and industries are succeeding internationally and overcoming barriers
  • encourage ‘hand-raising’, resulting in compelling export success stories being shared by businesses and DBT

How you can support the 2024 awards

  • Tag DBT social media accounts with any Awards promotion activity you’re undertaking
  • Share ‘Made in the UK, Sold to the World Awards’ posts from DBT channels
  • Promote the Awards in your newsletters or other communications you might have with your constituents.

For more information and to submit your entry visit the Made in the UK, Sold to the World Awards 2024 website on GOV.UK.