News & Updates

Clients who are businesses or organisations will now need to use multi-factor authentication to access their Government Gateway account. If the client does not already receive an access code by text, voice call, or to an authenticator app, they will need to add a device, such as their mobile phone number, to their account when they next sign in to enable them to receive an access code.

Clients who need to delegate access to their account to one or more of their employees will still be able to do this under multi-factor authentication. They will need to use the administrator and assistant facility in their Business Tax Account to create an additional user for each employee to whom they wish to give access. Each user will need their own multi-factor authentication, and will need to add their mobile details to enable them to receive an access code.

The changes do not affect individuals with Government Gateway accounts.

Written by the Tax Advice Network

HMRC have issued a briefing paper which sets out their approach to collecting tax debts as the country emerges from the Covid-19 pandemic. Where clients are able to pay their taxes, HMRC’s message is that they should do so. However, those clients that are still struggling financially should contact HMRC to agree a payment plan based on their financial position. HMRC will contact taxpayers with a tax debt by phone, post or text message. It is important to encourage clients to respond to communications from HMRC so that they can discuss payment options, such as Time-to-Pay agreements. Clients may also be able to take advantage of other support on offer, such as the various Government-back loans, to enable them to borrow money with which to pay the tax that they owe.

If a client does not get in touch with HMRC and ignores communications from HMRC about the tax that they owe, HMRC may visit them at their home or business address. The visits will focus on making sure that the client is aware of their tax debt and the support available to them, as well as determining their financial situation and agreeing a plan for paying their outstanding tax. However, from September 2021, if a client is unwilling to agree a payment plan or continues to ignore attempts by HMRC to contact them, HMRC may start the process of collecting the debt using their enforcement procedures.

HMRC have stated that they will be sympathetic to businesses with temporary cash-flow issues to help them survive as the economy recovers; however, where a client has little chance of recovery, HMRC will act to recover any tax that they owe.

Clients with payment problems should be made aware of the Debt Respite Scheme, which is a new Government scheme under which clients can apply to a debt adviser for breathing space whereby creditors stop enforcement activity and interest and late payment penalties cease.

Written by the Tax Advice Network

As we reported on 27 May HMRC had to stall the processing of many 2020/21 SA tax returns where the return included, or should have included, a report of a SEISS grant.

On 19 June HMRC began to automatically correct those SA returns where the total of SEISS grants reported doesn’t match the HMRC record of what has been paid out for SEISS grants 1 to 3. The correction is issued on a form SA302.

You need to examine this correction to the return and react to HMRC according to these circumstances:

• The SEISS grant was omitted from the return – accept HMRC’s auto-correction if the SEISS grant figure is correct, otherwise contact HMRC to dispute the amount of the correction.
• The SEISS grants were reported on the return but in the wrong box – accept the auto-correction and amend the tax return to remove the grant from where it was erroneously included.
• The SEISS grant amounts reported do not match HMRC’s records – check against records and either accept or dispute the correction.
• The taxpayer did not receive a SEISS grant – this may suggest that a grant was claimed fraudulently using the taxpayer’s personal details, contact HMRC urgently on 0800 024 1222.
• The SA return does not include self-employment or partnership pages – HMRC will interpret this is as a cessation of trade and correct the tax return to recover the whole of the grant on the basis that the client was not entitled to claim.

It will take HMRC some time to process all of the SA returns submitted before 19 June 2021, as some manual intervention is required.

Applications for the fifth SEISS grant (SEISS-5) are due to open in late July. HMRC has started to write to taxpayers who will be eligible for either the SEISS-4 or SEISS-5 grants for the first time. These will be traders who commenced their business in 2019/20. There are around 100,000 of these new traders, but HMRC did not manage to contact them all in advance of the SEISS-4 grant process. Those taxpayers will be asked to confirm their identity and provide some evidence of trading.

Further guidance on how to report SEISS and CJRS grants on tax returns and be found in the ICAEW Tax Guide 12/21.

Written by the Tax Advice Network

From 1 July there are three ‘one stop shop’ (OSS) VAT schemes that UK businesses need to be familiar with when selling to consumers (B2C: non-business customers) who are based in the EU:

• Union OSS
• Non-Union OSS
• Import OSS (IOSS)

All three schemes operate in a similar way in that the VAT is paid by the consumer at the local VAT rate applicable to the goods or services, and the seller reports and pays all the VAT charged in the different EU countries through a single OSS return. But the three different OSS schemes require separate registrations and separate returns.

The old VAT MOSS, which has until now only applied for sales of digital services and broadcasting, is extended to cover other services such as accommodation, admission to events and services related to land. From 1 July 2021 UK businesses will need to use the Non-Union OSS for the supply of services.

From 1 January 2021 the de-minimis turnover threshold for using VAT MOSS disappeared for UK based businesses, because the UK was no longer an EU member. From that point UK businesses have had to register for the Non-Union VAT MOSS scheme as we explained on 21 January 2021.

Where a UK business has goods held inside the EU at the time of sale, and is selling to EU based consumers, it needs to use the OSS where the goods are valued at no more than €150/ £135. This OSS replaces the EU distance selling rules. The distance selling threshold of €35,000 per member state is replaced with a single €10,000 threshold for all sales to customers in all EU member states.

The Import OSS relates to goods which are not held inside the EU at the time of sale, and the consignment value does not exceed €150. A UK based business needs to register for IOSS within an EU country (such as the Republic of Ireland) but it may need to appoint an accountant in that country to act as their intermediary.

Written by the Tax Advice Network

This grant is designed to help businesses who have been trading with customers or suppliers in the EU, but not with the rest of the world. So prior to 2021 they will not have had to deal with import or export procedures.

These small and medium sized businesses can apply for a government grant worth up to £2,000 to help pay for training and professional advice to help with; customs and excise duties, import VAT, or safety and security declaration requirements.

To qualify for the grant the business must meet all of these criteria before applying:

• No more than 500 employees
• Maximum annual turnover of £100 million
• Be up to date with all tax and customs obligations
• Be established in the UK for at least 12 months or hold Authorise Economic Operator status

The business must either complete its own import/ export declarations or currently use an external service to do this as they lack the capability within the business.

Applications must be made online by close of business on 30 June, so there is not much time to apply!

Written by the Tax Advice Network

Reporting the taxable benefit for company cars has always been a total pain, but now it is doubly so as there are two car benefit tables to juggle, as we explained on 19 September 2019.

To determine which table of appropriate percentages of list price you need to use for which car, you need to know when the vehicle was first registered – before or after 6 April 2020. The exact date is irrelevant, but the P11D form requires an exact date to be inserted. This is given on the car’s “log book” or registration certificate issued by the DVLA.

For all cars you need to know the CO2 emissions. This is given on a certificate issued with new cars, and also on the registration certificate.

Where the CO2 emissions figure is between 1 and 50g/km, the car must be a hybrid model, powered by both electricity and petrol or diesel. In this case you also need to know the number of miles the vehicle can travel on a single electricity charge. This is its zero emissions mileage.

Finally, you need to know the vehicle’s list price. This is not given on the registration certificate, but it may be on the order document for the new car.

Where the car is a “classic car” you need to know its current market value. A classic car is defined as 15 years old or more and worth at least £15,000. If the market value of a classic car exceeds its list price you must use the market value in place of the list price – as adjusted for any capital contributions made by the employee or accessories added to the vehicle.

Written by the Tax Advice Network