August 2018 HMRC Digital Services Update

Sep 24, 2018

This month’s update features the latest on Making Tax Digital for business and Agent Services.

Digital Services Update August 2018 

Making Tax Digital for Business (MTDB)

Progress of MTDB continues on both the VAT and Income Tax pilots as we work closely with a growing number of software developers on testing the technology and the user experience. This is helping us build a better system by accessing the number of both successful submissions and issue resolutions, a key part of the Private Beta pilot.

VAT Pilot

The MTD VAT Notice 700/22 was published on GOV.UK on 13 July. This provided definitive information on some key issues and also provided some useful scenarios in respect of the practicalities involved with MTD VAT.

At the same time we published information about some of the software developers that we are working with. 

Software suppliers supporting Making Tax Digital for VAT

This has been updated four times since publication emphasising the dynamic nature of this area as more developers register with us, and have their products ready to demonstrate and test.

Our final publication on 13 July was the Making Tax Digital for Business Stakeholder Communication Pack

In this we have provided information to support agents and businesses that need to make the transition to digital VAT business record keeping and submission of VAT returns using MTD-compatible software from 1 April 2019.

The VAT Private Beta pilot continued to develop and test the service with different customers and software products, adding to those previously successful. We acknowledge that many businesses want to be involved in the pilot, but we are building slowly and surely to maximise performance and reliability. We will gradually start increasing the numbers of businesses, of increasing complexity that can take part.

We held a further three webinars for VAT on 24 and 25 July. All were virtually full, and we continue to receive questions, indicating that not all agents are up to speed or have a solid grasp of MTD. Would it be beneficial for VCG members to see the more worrying questions (anonymised)? Would that help inform any educational actions going forward?

Recordings of previous Making Tax Digital webinars are available on the Help and support for Making Tax Digital page on GOV.UK.

Finally, we advised last month that we were taking part in a pilot to develop podcasts. We have scripted the first edition, for people new to MTD, and will hopefully record this towards the end of the month.  Podcasts will be shorter than the webinars and we will assess their impact and effectiveness to help get the MTD messages out to agents, and perhaps businesses too.

MTD Agent Services and Income Tax Pilot

Agents can set up an agent services account and sign up to use software to send Income Tax updates to HMRC on behalf of their clients. 

Currently the pilot is open to

  • self-employed businesses with income from one business, and
  • landlords with income from property.

Agents can now

  • Create an agent services account (accessed from GOV.UK)
  • Link existing Self Assessment (SA) and VAT client relationships to their agent services account (accessed from their agent firms’ agent services account homepage)
  • Sign up SA clients to MTD for Income Tax quarterly reporting (accessed from GOV.UK)
  • Link their agency MTD-compatible software to HMRC (accessed through their software)
  • Submit updates through their agency MTD-compatible software on behalf of a client
  • View MTD data and calculations on behalf of a client through software

Additionally, an agent can now access a digital authorisation service from their agent services account for a new MTD SA client (a digital 64-8 for MTDfB). Their new client can digitally confirm this authorisation to HMRC.

The existing paper 64-8 process can still be used for Self Assessment, and any new
clients added to an agency’s Government Gateway credential in this
way will be recognised for MTD SA.  

Agents will soon be able to manage users within their agent services account. This function
will allow agent firms to create additional Government Gateway IDs to allow multiple agents within the firm to access administrative services available through the agent services account, such as signing clients up to MTD VAT or registering Trusts.

A number of software developers are carrying out trials with their existing agent customers to trial their MTD product for Income Tax - please contact your software provider if you are interested.

Information and guidance

We have published additional information and step by step guidance in Agent Update 66. 

Agent Services Account

Agents will need to create an agent services account if they:

  • want to register a Trust using the Trust Registration Service
  • want to voluntarily participate in Making Tax Digital for Business (MTDfB)
  • are amongst the small number of agents taking part in the whitelisted “Agents for Individuals” pilot service.

In addition to creating an agent services account, those agents volunteering to participate in MTDfB can also test the following services:

  • linking existing SA clients to the agent services account - this involves linking existing Government Gateway IDs to the agent services account, so an agency can act on behalf of their client in Making Tax Digital (MTD) without needing to be re-authorised by that client
  • subscribing a client to the MTD service - an agency can subscribe any existing SA client who has previously authorised the agency to act for them in SA e.g. 64-8 authorisation is in place
  • requesting MTD authorisation from a new client (a digital 64-8) - an agency firm with an agent services account can invite any customer who has already signed up to MTD to authorise them to act on their behalf in MTD SA
  • completing a quarterly update for a client - an agent must have MTD-compatible commercial software to do this. You can find software suppliers for sending Income Tax on GOV.UK.

A recording of the Talking Points meeting on the Agent Services Account is now available

Venture Capital Schemes

Publication of the Venture Capital Schemes commencement regulations

The changes made by the Finance Act 2018 to the venture capital schemes – the Enterprise Investment Scheme, the Seed Enterprise Investment Scheme and Venture Capital Trusts – have taken effect from the dates announced at Autumn Budget 2017. See the Venture Capital Schemes Manual for more details of the new rules.

Cyber Security

Staff Awareness

HMRC regularly warns about the risks of malicious software being deployed to devices. Cybercriminals use a variety of methods to try to install malicious software (malware) on computers.

Many of these infections rely on persuading individuals to open an email attachment or visit a malicious website.

People are a critical point of defence and should form an integral part of any organisations cyber security strategy. Success in defeating Cybercriminals is unlikely to be achieved through technical means alone.

Creating a positive security culture, in which staff awareness and behaviours are enhanced, can be achieved through a variety of methods. The NCSC provide guidance for organisations to increase staff awareness and reduce impact from Cybercrime as part of the 10 Steps to Cyber Security.

Examples of practical application of security awareness, specific to the phishing threat, can include: –

Identifying users with privileged access (such as permission to install software), minimise the number of users who require access and improve the vigilance of those who do genuinely require such access.

Phishing training, this can vary from straightforward examples based training through to more sophisticated ethical phishing campaigns to test and monitor staff behaviours, identify and track improvements.

Safe use of Software as a Service (Saas)

Businesses increasingly rely upon a variety of software delivered as a service. These are typically cloud hosted and accessible across the internet, rather than previous models of privately and/or locally hosted services. This presents a new set of risks to users of these services.

Examples of this type of tool are the web based issue tracking and project management tools Trello and JIRA.

Recent reporting has highlighted instances where documents have been left available on public boards that are available to users outside of their intended audience.

This has highlighted the risk of loss of intellectual property and personally identifiable information through the incorrect configuration of such services.

This is typically caused by a lack of awareness of best practice when configuring access controls to posts/boards. Particularly the incorrect use of public boards for private material.

We are aware that information regarding accountancy and accountancy software/tools has been placed on Trello within publicly visible boards that have also been google indexed.

Organisations using or who have previously used these or similar services may wish to review their guidance on use of these services to ensure that any content is not set to public, unless that was the explicit intention.

Instructions on changing Trello board visibility can be found here:-

More information on the topic of SaaS security guidance can be found on the NCSC internet guidance pages.