HMRC Stakeholder Digest - 21 December 2022
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.
Announcements
Making Tax Digital for Income Tax Self Assessment
Self-employed individuals and landlords now have more time to prepare for Making Tax Digital for Income Tax Self Assessment (MTD for ITSA). This means that the mandatory use of software is being phased in from April 2026, rather than April 2024.
We understand that these customers are currently facing a challenging economic environment and the transition to MTD for ITSA represents a significant change to taxpayers and us for how self-employment and property income is reported.
From April 2026, businesses, self-employed individuals, and landlords with an income of more than £50,000 will be mandated to keep digital records and provide quarterly updates on their income and expenditure to HMRC through MTD-compatible software.
Those with an income of between £30,000 and £50,000 will need to do this from April 2027.
The government has also announced a review into the needs of smaller businesses, to consider how MTD for ITSA can be shaped to fulfil their Income Tax obligations.
We anticipate that most taxpayers within the scope of MTD for ITSA will be able to sign-up voluntarily before they are mandated to do so.
Your members and clients can read the full announcement on GOV.UK.
Customs Declaration Service exporter deadline extended until 30 November 2023
Exporters now have until 30 November 2023 to move across to the Customs Declaration Service (CDS) for their export declarations.
This decision was taken in consultation with the border industry and will ensure businesses have enough time to prepare and the right level of support is put in place to help them move across.
We will provide further information about the timeline for CDS exports by the end of January 2023. Businesses can provide their preferred email address on GOV.UK to receive updates and notifications about CDS.
Actions
Electronic Sales Suppression – businesses have until 6 January 2023 to submit voluntary disclosures
We are currently leading a global probe into major till fraud which involves businesses using Electronic Sales Suppression (ESS) software. The software allows businesses to artificially reduce the number or value of sales through their electronic tills, meaning that they can declare a lower turnover and reduce the amount of tax paid.
We have used data to identify thousands of potential users of this software and are encouraging businesses who are, or have been using, possessing or promoting ESS software to make a voluntary notice of intent to disclose by 6 January 2023. Following this date, the full disclosure form will be available for businesses to complete until 28 February 2023.
If your members and clients are affected by this, please direct them to the dedicated disclosure facility on GOV.UK. By making a disclosure now, those deliberately misusing their till system could see their financial penalties reduced.
Businesses who deferred VAT due to COVID-19 urged to act if they are struggling to pay
Businesses who deferred their VAT payments due between 20 March 2020 and 30 June 2020 had until the end of June 2021 to arrange to pay. After this time, the outstanding amount became a debt that we would take further action to collect.
Businesses that still have deferred VAT outstanding must pay their VAT bill in full or agree a payment plan with us. Failure to do this may now lead to a 5% penalty, including in some cases interest being charge on the outstanding amount owed.
We encourage any business that is struggling to pay their deferred VAT to contact us as soon as possible.
More information about VAT deferred due to coronavirus (COVID-19) is available on GOV.UK.
Changes to VAT penalties and interest rates from 1 January 2023
New penalties will come into effect from 1 January 2023 for late VAT submissions and payments, including nil or repayment return customers.
The way VAT interest is calculated will also change for late payments from businesses and repayments we make on VAT owed.
Businesses can find more information about preparing for upcoming VAT penalty reforms on GOV.UK.
We have also produced communications resources to help you share this message with your clients and members on how it might affect them.