This Institute regularly engages with HMRC on matters of interest for our members. In recent months, the focus of our meetings has been on the various COVID-19 supports and preparations for EU transition amongst other areas. Below is set out some key messages from two recent virtual meetings.
Representative Body Steering Group
This is the highest level forum for the Professional Bodies which meets with HMRC roughly 3-4 times a year. More recently, meetings have been held at least every two months due to COVID-19. This group last met virtually on Wednesday 14th October. The following key points arose from the meeting:-
- Agent Dedicated Line (“ADL”) prioritisation was reduced during the pandemic to allow resource to be devoted elsewhere within HMRC – HMRC hope to reinstate this soon – the importance of the ADL to agents was stressed to HMRC;
- HMRC is examining the impact of the pandemic on the 31 January 2021 filing deadline and will be carrying out a “temperature check” on this at the next meeting – your continued feedback on this would therefore be appreciated;
- It was confirmed that the opening of post has been impacted by the pandemic for obvious reasons – one area where this has particularly impacted is on CIS refunds (including online claims) – HMRC are endeavouring to clear the post backlog in this area by the end of the year at the latest;
- Simplification will also be a consideration as the Government’s Tax Administration Strategy develops – this was a recommendation of this Institute in its Next Financial Year paper;
Virtual Communications Group
This group meets each month. At the most recent meeting on Monday 19th October various matters of interest were discussed including several in respect of the COVID-19 supports:-
- Even if an agent is appointed to represent an employer for payroll purposes including submitting job retention scheme claims, that agent will not be able to act on their clients behalf in respect of any CJRS compliance enquiries unless they are also appointed for income tax – this is because ultimately any amounts overpaid by HMRC are recovered through a special income tax charge on the employer. HMRC are to confirm the position in respect of companies;
- HMRC are working on the detailed guidance for the job support and enhanced job support schemes (including a calculator) – more on this is expected by the end of this month. It was stressed to HMRC how important this is in the context of cash flow and business decisions around job retention;
- HMRC are working on the guidance for the extended SEISS scheme announced in the Winter Economy Plan including the criteria which will require to be satisfied. This is expected to be available by the end of this month. Once again, we do not expect that agents will be able to make claims on behalf of their clients for the reasons previously set out;
- The ability to agree a Time to Pay (“TTP”) arrangement to spread VAT into 11 payments where this was due for payment between 20 March 2020 and 30 June 2020 and was previously deferred to 31 March 2021 will be subject to an opt-in from the taxpayer;
- This will also be the case with the enhanced TTP which will be on offer for self-assessment payments due on 31 January 20201 including the second payment on account deferred from 31 July 2020;
- These enhanced TTP arrangements will require 1/11th of the relevant amount to be paid at the time the arrangement is agrees and the remaining 10 payments to be made via direct debit;
- The discussion also confirmed that in order to take advantage of the TTP for deferred VAT the taxpayer must be up to date in their VAT filings only; no other pre-conditions will be required;
- No interest will be due on VAT deferred in this manner so long as payments are made on time;
- This is a special stand-alone TTP scheme for VAT and the taxpayer’s ability to access this will not be impacted if a taxpayer has a TTP on another head of duty – the only condition they must meet is that their VAT returns must be up to date and the arrangement only applies to VAT previously deferred as set out earlier;
- The policy in respect of enhanced TTP for Self-Assessment is currently being developed and detailed guidance will be published in due course;
- Taxpayers will be able to apply for an enhanced TTP for self-assessment within 60 days of the due date (i.e. even if the tax is late) – however the impact of this on late payment penalties needs to be considered which kick in after 30 days in respect of the balancing payment for 2019/20;
- Agent access to enhanced TTP won’t be available as the system requires the taxpayer to set up a direct debit and banking regulations require the bank account holder to do this; and
- HMRC are looking at their ways of communicating with mid-sized businesses and will be seeking feedback on this in the coming months.