This week we bring you news about a pragmatic approach being taken by HMRC to enquiries into off-payroll working compliance and action is needed by certificate of tax deposit holders by 23 November 2023. A new interactive guidance HMRC tool is available to establish if national insurance contributions must be paid whilst working abroad and HMRC has published guidance in its International Exchange of Information manual on the new mandatory disclosure rules which took effect from 28 March 2023. Updated guidance has also been published in HMRC’s Employment Income manual on issues in relation to electric vehicles which confirms that no taxable benefit in kind arises if an employer reimburses the employee for the cost of charging a company-owned electric car. And finally, in a recent meeting of HMRC’s VAT Registration forum, which the Institute participates in, it was announced that from mid-November 2023, HMRC will no longer be providing paper VAT registration forms on GOV.UK. This will only be available on request from the VAT helpline (more information on this will be provided in due course).
Off-payroll working enquiries
We are aware that HMRC are currently taking a pragmatic approach to enquiries into the off payroll working rules by offering deemed employers the opportunity to pause any settlement, as currently this legislation does not allow for offset of any taxes already paid by the contractor or their personal service company. This is because HMRC has been consulting on legislation which may allow a limited set-off for these taxes.
However, it is not currently guaranteed that this legislation will be introduced. The ability to pause any settlement is subject to certain conditions, which are set out in a letter to deemed employers from HMRC.
Certificate of Tax Deposit holders 23 November 2023 deadline
The deadline for using Certificates of Tax Deposit is 23 November 2023. The Certificate of Tax Deposit Scheme allowed you to deposit money with HMRC and use it later to pay certain tax liabilities. The date that you bought your certificate is known as the effective date of payment.
On 22 November 2017, HM Treasury gave notice of the scheme’s closure. This means the Certificate of Tax Deposit scheme closed for new purchases from that date. HMRC will continue to honour existing certificates until 23 November 2023.
HMRC recommends holders to contact the Certificate of Tax Deposit team before the scheme closes to tell HMRC how you want to use your certificate. If you think you will still have any certificates after 23 November 2023, you should contact the team as soon as you possible to arrange a refund.
After 23 November 2023 HMRC will try to repay the balance of any certificate which remains unpaid and unclaimed. If it is unable to (for example, because HMRC is unable to contact the current certificate holder after reasonable effort), HMRC will consider the balance as forfeited.
A detailed email has been sent to us by HMRC setting out this information, which you can read here.