This week we bring you news of the government’s response to the Treasury Committee’s report which outlined the need for a review of tax reliefs and it's response to the same Committee’s report into venture capital tax reliefs is also available. We also update you on the removal of the functionality to copy existing VAT clients across to the Agent Services Account (“ASA”) and HMRC has issued an important reminder in its Company Tax Return Guide about the procedures to follow when making loss carry-back claims in corporation tax returns. And finally, guidance has now been published on the digital DIY Housebuilders Scheme which launched on Tuesday 5 December and which we told you about in last week’s Miscellaneous updates.
Update - removal of functionality to copy existing VAT clients to the ASA
In our Miscellaneous updates of 11 September, we advised that from October 2023 HMRC intended to remove the functionality that allowed agents to copy existing VAT clients to their ASA. We have now been advised that this change has not yet taken place and has been delayed to an unspecified date. We understand that this is due to technical complexities.
In the interim, agents are still encouraged to prepare for the removal of this functionality in due course by ensuring that existing VAT clients are copied across as soon as possible. Once this functionality is removed, VAT clients will need to be authorised using the digital handshake authorisation route available in the ASA.
Reminder: corporation tax loss carry-back claims in corporation tax returns
HMRC has issued an important reminder to companies and agents about the procedures to follow when making loss carry-back claims in corporation tax returns (“CT600”).
If the CT600 includes a loss carry back claim, you must tick box 45 to show that a repayment for an earlier or prior accounting period is due and you must supply a breakdown of the claim in your computations showing how losses are to be used. Failure to do so will result in HMRC being unable to process the claim.
The reminder includes confirmation that such claims do not of themselves require an amended return for the period in which the losses are utilised. Therefore, if making a loss carry back claim, you should not:-
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submit an amended CT600 tax return for the same accounting period that does not include new information; or
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submit an amended CT600 tax return for the period in which the losses are being used; or
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submit an original CT600 tax return by post — all returns should be submitted online through the Government Gateway portal.
However, the above does not apply if an amended return covers other matters and is not solely in relation to the loss carry back claim, or if the loss carry back claim itself requires amending.
Resubmitting the original loss carry-back claim will also increase the time taken for HMRC to review and process this.
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