HMRC Stakeholder Digest -19 December 2024

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

The HMRC Stakeholder Digest provides a monthly round-up of our latest news and updates. We’d be grateful if you would share relevant information with your clients or members.

A message from Jim Harra

With just days to go until 2024 draws to a close, it’s an appropriate time to reflect on the last 12 months and look forward to 2025.

First and foremost, I’d like to thank you for the interest you’ve shown in HMRC’s work and for the ways in which you’ve helped your clients and members to meet their tax obligations and receive their entitlements.

The connections you have to communities throughout the UK are invaluable in helping us get messages and support to millions of people from all walks of life, and for us to hear feedback from the people who use our services

Looking ahead

I know that in the past couple of years our customer service has not been as good as it should have been. I am pleased to say that we improved our service levels over the summer and since October we have been meeting our main customer service performance targets.

I expect that we will maintain this improved level of service for the rest of 2024–25 and in 2025–26. This is thanks to the additional 1,500 customer service colleagues we’ve taken on since spring 2024 as well as continued investment in our online services and the HMRC App.

Closing the tax gap

With your help, HMRC collects around 95% of the tax that is due, and the UK has one of the lowest reported tax gaps in the world. But that still leaves a gap of nearly £40 billion each year that is being lost to public services. The Government is committed to doing more to close the tax gap and ensure citizens and businesses pay the correct amount.

The Chancellor announced in the Autumn Budget funding for an additional 5,000 HMRC compliance officers and 1,800 debt collection officers, together with a number of other tax compliance measures, with the aim of securing an additional £6.5 billion each year for the UK by 2029–30. Just last month I was pleased to welcome the first of the new recruits and more will follow later in 2024–25.

Modernising our services

Another focus of the coming year will be continuing our work to modernise HMRC’s services, both to become more efficient and to improve the experience people have when dealing with us.

With that in mind, I look forward to being able to publish our new Digital Roadmap in the spring.

I wish you a peaceful Christmas and a Happy New Year.

Guidance for private schools to check whether they need to register for VAT

Private schools must check if and when they need to register for Value Added Tax (VAT).

If private schools receive fees, they can use our interactive tool on
GOV.UK to check if they must register.

Private schools that receive payments in advance need to register
before 1 January 2025.

Private schools must:

• Register for VAT before the registration deadline.
• Prepare to charge and reclaim VAT on goods and services related to school and boarding fees

Private schools and tax agents supporting them, should read our updated guidance by searching ‘private schools and VAT’ on GOV.UK.

They can also watch recordings of our webinars for VAT on GOV.UK.

Countdown to the 31 January 2025 Self Assessment deadline

The countdown to the Self Assessment (SA) tax return and payment deadline has begun.

We want to help customers get their tax right, and there’s plenty of help online for Self Assessment on GOV.UK. In addition there are:

• The digital assistant: ask HMRC online and get instant answers, or get a link to information that can help resolve your query.
• Your HMRC online account: sign in or set up an account to check and manage your personal information and complete your tax return
• YouTube videos: access over 70 videos covering how to fill in your tax return, make a payment and what to do if you’re new to SA on the HMRC YouTube Channel.

We’re urging customers to not wait until the last minute to submit their tax return, act now, to ensure a smooth and stress-free tax season. Please encourage anybody who needs to do a tax return, not to delay. Missing the 31 January 2025 deadline could result in a penalty.

Changes to the look of some HMRC text messages

We have made changes to some of the text messages we issue to our customers.

The content of our text messages won’t be changing, but they may look different, and we want to let our customers know.

Since October 2024, we’ve been sending a range of branded messages including for Self Assessment and Child Benefit.

Branded messages, or Rich Communication Service (RCS) messages, show HM Revenue and Customs as the sender, include the HMRC logo and contain verified senders’ information. If customers don’t have a compatible device the message will appear as a standard message.

Whilst branded messages are more secure, customers should still be vigilant to identify tax scam phone calls, emails and text messages and guidance is available on GOV.UK.

Home Responsibilities Protection - making sure State Pensions are correct

Tens of thousands of people who claimed Child Benefit between 1978 and 2000 could be receiving too little in State Pension payments due to Home Responsibilities Protection (HRP) not being included on their NI record. 

HRP reduced the number of qualifying years of NI contributions that a person with caring responsibilities needed to receive the full basic State Pension and was automatically added to NI records between 6 April 1978 and 5 April 2010 when someone claimed Child Benefit. HRP was replaced by National Insurance credits in
2010.

However, if someone claimed Child Benefit before May 2000 and didn’t provide their NI number on their claim, HRP might not have been included on their NI record. This could have resulted in them receiving less State Pension than they are entitled to.

Figures recently published by the Department of Work and Pensions (DWP) show that as of 30 September 2024, the average arrears payment made to customers with missing HRP was £7,859.

We are encouraging people who claimed Child Benefit between 1978 and 2000 to check if they're eligible and make a claim on GOV.UK. 

We are also encouraging friends and family of anyone who may be eligible to support them in making a claim if
necessary.

We've published a short video about HRP on LinkedIn that can be shared with your audiences.

Basis Period Reform — reporting on a tax year basis  

From April 2024, sole traders and partners in a business will have to report their profits on a tax year basis, if they don’t do so already.

This is known as Basis Period Reform.

To ensure businesses meet the filing deadline of 31 January 2025, they should file with a provisional figure for overlap relief and amend it with the correct figure within 12 months of the filing date, if they don’t currently hold this figure. 

We have launched a tool for businesses to work out their overlap relief figure and further support is available for Basis Period Reform on GOV.UK.

New ways to tackle non-compliance consultation

​At the Autumn Budget 2025, the government published a consultation on new ways to tackle non-compliance.

The consultation is inviting views on HMRC’s approach to correcting taxpayer inaccuracies in a claim or return, and whether there are
ways this could be improved.

​​This consultation is likely to be of particular interest to the following groups:

• Individuals, companies, and those acting on their behalf
• Taxpayer representative bodies and charities
• Voluntary organisations that help people with clients' tax affairs

This is a reminder that the consultation closes on 22 Jan 2025 and responses should be sent to [email protected].  

If you have clients or members in the groups listed above, please share this information to encourage them to have their say.

New HMRC Permanent Secretary 

The Cabinet Secretary announced on 18 December that following Sir Jim Harra’s retirement in spring 2025, John-Paul Marks will become HMRC’s First Permanent Secretary and Chief Executive.   

John-Paul Marks is currently Permanent Secretary to the Scottish government.

Following his appointment, John-Paul said:  

"It is a privilege to be appointed to lead HM Revenue and Customs. I look forward to supporting the department’s vital work to collect the revenues which fund public services, and to working with the HMRC Board, colleagues and partners in the years ahead to deliver service modernisation and reform. 

John-Paul will be based in our Edinburgh Regional Centre.

Messages on behalf of Other Government Departments

Spending Review 2025 representation portal is open for views

The Chancellor has launched Phase 2 of the Spending Review, which will deliver the government’s Plan for Change.

HM Treasury has launched the Spending Review representation portal for stakeholders to submit feedback on government spending priorities, and to suggest policy ideas that could inform decisions about departmental budgets and resource allocation over the multi-year Spending Review period.

As part of the representation process, stakeholders will be asked which government departments and/or independent bodies their organisation’s representation relates to. They can provide their views for the Phase 2 of the Spending Review 2025 on GOV.UK.

The portal will close 9 February 2025.