Today we are issuing a final reminder that the deadline for employers to provide employees with their P60 for 2023/24, either on paper or electronically, is Friday 31 May 2024. The P60 summarises the employee’s total pay and deductions for the year.   By that date, employers must give a P60 to all employees on payroll who were working for them on the last day of the tax year (5 April 2024). If an employer is exempt from filing payroll online, copies of P60s can be ordered from HMRC. 

After the Spring Budget took place on Wednesday 6 March, the Spring Finance Bill 2024 (official title Finance (No. 2) Bill 2023-24) was published. The Bill reflects many of the tax measures announced as part of the Spring Budget. It is currently awaiting Royal Assent with many stages having taken place at speed last week due to the announcement of the General Election which will take place on Thursday 4 July. Parliament is to be dissolved later this week on Thursday 30 May. 

Revenue has updated the Stamp Duty Manual which provides guidance on the levy of stamp duty on authorised insurers. Section 125A SDCA 1999 provides for a stamp duty to be levied on certain health insurance contracts entered into between health insurers and their customers. The manual has been updated to confirm that only one levy is payable in relation to any 12-month period for each insured person (section 6). 

In this week’s miscellaneous updates, HMRC has published guidance on using an agent to claim certain VAT refunds and guidance is also available for legal representatives on the information they need to tell HMRC to calculate the lump sum death benefit charge. The latest Agent Update is available which covers a range of areas and issues and HMRC is conducting research on the Income Record Viewer. And finally, HMRC’s latest Stakeholder Digest has been released which includes news of an update to HMRC’s Agent Standard, the standard which sets out HMRC’s expectations of tax agents and advisers in their dealings with HMRC and an overview of the way HMRC tackles the minority of agents who do not meet the standard.  Using an agent to claim VAT refunds  HMRC has added a section on using an agent to the following guidance pages:  VAT refunds for constructing a new charity building;  VAT refunds for new builds if you’re a DIY housebuilder; and  VAT refunds for conversions if you're a DIY housebuilder.  Guidance on lump sum death benefits and the abolition of the lifetime allowance  HMRC has published guidance for legal representatives on the information they need to provide to HMRC when calculating the lump sum death benefit charge. The legal representative is responsible for checking whether a chargeable amount arose, and for reporting any chargeable excess over the lump sum death benefit allowance to HMRC.   HMRC has also published a set of over 100 FAQs on the abolition of the lifetime allowance for pension schemes.  Latest Agent Update  Agent update: issue 120 is available now. Get the latest guidance and information including: moving all exports to the Customs Declaration Service;  the enhanced check your State Pension forecast service is now available;  how you could benefit from joining the UK Internal Market Scheme;  Investment Zone tax reliefs guidance; and  reporting profits on a tax year basis from 2024/25.  Research on the Income Record Viewer  HMRC is conducting research on the Income Record Viewer (“IRV”), which is their online tool for agents to view client information, such as tax code, pay and tax details and employment history. HMRC has launched a survey on the tool with a view to making future improvements. Responses to the survey are anonymous.  

In this week’s EU exit corner, we bring you the latest guidance updates and publications relevant to EU exit. The most recent Trader Support Service and Cabinet Officer Borders bulletins are also available. We issue another reminder that there is now just over a week to go until the 4 June 2024 deadline for making all export declarations via the Customs Declarations Service and not CHIEF. And finally, the National Audit Office has published its report on implementing an effective trade border in the UK.  NAO report   The NAO’s report, which was recently published, focuses on the movement of goods across the border. It covers:  the operation of the border since the end of the transition period in December 2020 (Part One), the introduction of a full border control regime and future risks (Part Two), and challenges and opportunities relating to the management of the border (Part Three); and  the implementation of arrangements relating to Northern Ireland (Part Four).   The report is based on information available up to April 2024 and has not evaluated the implementation of the new import controls introduced from 30 April 2024.  The report concludes as follows:  “Leaving the EU customs union and single market created large-scale change in arrangements for the movement of goods across the UK border. More than three years after the end of the transition period, full import controls are still not in place. In addition, the model’s operation is still to be tested and the government may not be able to apply controls consistently as the controls are phased in.  The government’s new border target operating model should reduce costs to traders in comparison to its initial plans. However, repeated delays in implementing controls have meant ongoing uncertainty and an increase in risk, and the government and border stakeholders have also incurred unnecessary costs. This could have been avoided if the government had established a clearer vision of how the border should operate from the start and had taken a more strategic and planned approach to implementation.  The government’s 2025 UK Border Strategy includes ambitious plans to use technology and data to facilitate the passage of legitimate trade, while still identifying people and goods at risk. Most stakeholders agree with this overall approach. However, there is no timetable for achieving these ambitions, and the extended phasing of the introduction of full import controls has meant slower progress on other elements of the Strategy.  It is a considerable challenge to manage several large programmes involving multiple departments and external stakeholders, and we have highlighted the delivery risks. To improve its chances of success, the government needs strong mechanisms for delivery and accountability, a more realistic approach to digital transformation, and the means to assess and report on border performance to enable improvement over time.  The UK government and the EU have agreed arrangements to simplify the movement of goods from GB to NI, and the UK government and NI authorities are working to implement these. However, some details remain to be confirmed, including the operational implications of the government’s recent Safeguarding the Union Command Paper. If NI is to benefit from its unique position, the UK government must provide the clarity required to give businesses the confidence to invest in and trade with NI and provide sufficient support to the Northern Ireland Civil Service to help it effectively enact its new responsibilities.”  Miscellaneous updated guidance etc.   Recently updated guidance, and publications relevant to EU exit are set out below:  Navigate the CDS Declaration Instructions for Imports;  List of customs training providers;  Goods Vehicle Movement Service codes for Data Element 5/23 of the Customs Declaration Service;  Apply to use simplified procedures for import or export (C&E48);  Report exports that arrived or left a UK port that were not notified in CDS;  Data Element 2/3 Documents and Other Reference Codes (National) of the Customs Declaration Service (CDS);  External temporary storage facilities codes for Data Element 5/23 of the Customs Declaration Service;  Notices made under the Taxation (Cross-border Trade) Act 2018;  Country codes for the Customs Declaration Service;  Currency codes for Data Element 4/10 of the Customs Declaration Service;  CDS Declaration Completion Instructions for Imports; and  Data Element 2/3: Documents and Other Reference Codes (Union) of the Customs Declaration Service. 

 In Irish news, the Employers’ PSRI threshold is to increase from 1 October 2024, and we are delighted to confirm that TaxSource Total, the Institute’s free online tax resource, has been updated for Finance Act 2023 and Finance (No. 2) Act 2023. In UK news, as the National Audit Office criticises HMRC performance, additional investment has been announced for HMRC to fund its services and we remind employers and agents that 31 May 2024 is the deadline for providing the 2023/24 P60 to employees. In International news, the EU has reached political agreement on the FASTER withholding tax initiative. Ireland The Employers’ PRSI threshold is to increase from 1 October 2024, as part of a range of measures intended to support small and medium enterprises announced by Government last week. TaxSource Total, the Institute’s free online tax resource, has been updated for Finance Act 2023 and Finance (No. 2) Act 2023. UK Read about the additional investment announced for HMRC to fund its services as the National Audit Office criticises HMRC performance in 2022/23. Friday 31 May 2024 is the deadline for provision of the 2023/24 P60 to employees. International The EU has reached political agreement on the Directive on Faster and Safer Relief of Excess Withholding Taxes (FASTER). Keep up to date with all the latest Irish, UK, and international tax developments through Chartered Accountants Ireland’s Tax Newsletter. Subscribe to the Tax News by updating your preferences in MyAccount. You can also read this week’s EU exit corner here.

Check out the latest items on the Agent Forum. Remember, in order to view each item, you must be signed up and logged in.   All agents, who are a member of a professional body, are invited to join HMRC’s Agent Forum. This dedicated Agent Forum is hosted in a private area within the HMRC’s Online Taxpayer Forum. You can interact with other agents and HMRC experts to discuss topical issues and processes. 

Do you use HMRC online services? Don’t be caught out by the planned downtime to some services. HMRC are warning about the non-availability of specific services on the HMRC website, a range of services are impacted. Check the relevant page for information on planned downtime.  

In this week’s EU exit corner, we bring you the latest guidance updates and publications relevant to EU exit. The most recent Trader Support Service is also available. And finally, last week the UK’s Foreign Secretary and the European Commission’s Executive Vice-President published a joint UK-EU statement on the meetings of the Partnership Council and Withdrawal Agreement Joint Committee.  Latest meetings of the Partnership Council and Withdrawal Agreement Joint Committee.  Last week the Foreign Secretary Lord Cameron and European Commission Executive Vice-President Maroš Šefčovič published a joint UK-EU statement on the meetings of the Partnership Council and Withdrawal Agreement Joint Committee which took place in Brussels on Thursday 16 May.  On the same day it was announced that the UK and EU also ratified a new set of arrangements which aim to ensure that Northern Ireland traders can fully benefit from the UK’s independent free trade policy. The deal means over 13,000 tons of lamb, beef, and poultry including from key Free Trade Agreement partners, such as Australia and New Zealand, will now be covered by UK tariff rate quotas.  Miscellaneous updated guidance etc.   Recently updated guidance, and publications relevant to EU exit are set out below:-  Search the register of customs agents and fast parcel operators;  UK customs office codes for the Customs Declaration Service;  Apply to use simplified procedures for import or export (C&E48);  Report a problem using the Customs Declaration Service;  Navigate the CDS Declaration Instructions for Final Supplementary Declarations (FSD);  Navigate the Customs Declaration Service instructions for inventory exports;  Navigate the Customs Declaration Service (CDS) Bulk Import Reduced Data Set (BIRDS) Declarations and Customs Clearance Request (CCR) completion instructions for inventory imports; and  Navigate the CDS Declaration Instructions for Exports. 

In this week’s miscellaneous updates, HMRC has published updated guidance on research and development (“R&D”) tax relief and the latest guidelines for compliance published by HMRC examine common errors in capital allowances claims for plant and machinery. The form for reporting CGT on residential property gains has recently been reformatted and HMRC has published updated guidance for employer’s on giving foreign tax credit relief. Foreign businesses can now apply for gross payment status under the construction industry scheme and, finally, HMRC’s latest schedule of live and recorded webinars for tax agents is available for booking. Spaces are limited, so take a look now and save your place.  Updated guidance on R&D tax relief  HMRC has published updated guidance on R&D tax relief as follows:-  Research and Development (R&D) Tax Relief: Enhanced R&D intensive support for loss-making SMEs based in Northern Ireland;  This guidance covers claiming enhanced R&D intensive support (“ERIS”) as a loss-making, small and medium sized enterprise (“SME”) based in Northern Ireland. The Research and Development (R&D) Relief (Chapter 2 Relief) Regulations 2024 make provision for loss-making, R&D intensive SMEs with a registered office in Northern Ireland.  SMEs registered in Northern Ireland whose business activities involve no element of trade in goods, and no relevant activities in relation to electricity, can choose to opt out of these provisions by notifying HMRC.  Affected companies are not subject to the restrictions for relief on payments to overseas contractors or providers of externally provided workers and will be able to claim enhanced R&D intensive support, subject to a rolling 3-year limit. Above this limit, relief is available under the new merged scheme.  Enhanced R&D intensive support allows loss-making R&D intensive SMEs to:-  deduct an extra 86 percent of their qualifying R&D revenue costs as an additional deduction in calculating their adjusted trading loss, in addition to the 100 percent deduction which is already available to make a total of 186 percent deduction; and  claim a payable tax credit, which is not liable to tax, and which is worth up to 14.5 percent of the surrenderable loss.  Submit information to support your claim for R&D Corporation Tax reliefs.  The guidance on what detailed information is needed to send to HMRC to support R&D tax relief claims, and when and how to submit it has also been updated.  Guidelines for compliance (“GFC”) 5 - common errors in capital allowances claims for plant and machinery  HMRC recently published GFC 5 which aims to assist taxpayers and agents in managing risks in making a claim for capital allowances on plant and machinery. The guidelines set out areas where errors are commonly made and includes a recommended approach for making a claim and keeping records. According to HMRC, the guidelines do not represent a change in the law or HMRC policy.   In November 2021 HMRC announced that it would be publishing GFC as part of its action being taken in response to its review of tax administration for large businesses. GFCs aim to provide practical guidance and greater transparency on the approaches HMRC regards as higher or lower risk and the associated response.   CGT on UK residential property gains  Disposals of UK residential property must generally be reported to HMRC within 60 days of completion. This deadline applies to anyone UK or non-UK tax resident with transactions able to be reported to HMRC on paper in some cases. Recently, the format of the paper form changed from a PDF to an online form. Once completed, the form should be printed and posted to HMRC, as before.   HMRC has been contacting some taxpayers by email in relation to reporting these transactions. HMRC is following up on these emails by contacting taxpayers by phone in order to gather feedback on the email.  New guidance for employers giving foreign tax credit relief  HMRC has published updated guidance for UK employers on providing foreign tax credit relief (“FTCR”) to employees. If an Appendix 5 arrangement is in place, the employer is able to offset foreign tax deducted from the employee’s pay against tax due under PAYE via FTCR. This offset is limited to the employee’s UK income tax liability.   Foreign businesses and the Construction Industry Scheme (“CIS”)  Businesses based outside the UK can now use form CIS305 to register as a subcontractor and apply for gross payment status under the CIS. 

The deadline for employers to provide employees with their P60 for 2023/24, either on paper or electronically, is Friday 31 May 2024. The P60 summarises the employee’s total pay and deductions for the year.   By that date, employers must give a P60 to all employees on payroll who were working for them on the last day of the tax year (5 April 2024). If an employer is exempt from filing payroll online, copies of P60s can be ordered from HMRC. 

Last week the Financial Secretary to the Treasury announced £51 million in funding for HMRC to help deal with the pressures on phonelines and improve its declining service levels. More information on this is available in a Written Ministerial Statement. The announcement of this investment came just two days before the National Audit Office (“NAO”) published a highly critical report on HMRC customer service.  HMRC has made clear that the additional investment being made does not affect its strategy to become a digital first tax administration and it is therefore seeking cooperation and support on this journey from taxpayers and the Professional Bodies. As previously advised, the Institute will continue to monitor this and will be attending a bespoke meeting with HMRC later this month to discuss the way forward further.   In the meantime, we remind you that HMRC previously advised that even if additional funding was received, quarters one and two of 2024/25 are likely to see a further decline in services whilst HMRC plans the way forward  The NAO report reviewing HMRC services in 2022/23 concluded that HMRC’s telephone and correspondence services have been falling below the expected service levels for too long, and that HMRC has not achieved planned efficiencies.  The report continued:   “To achieve value for money HMRC must provide a timely and effective service for those needing help with their tax or benefits, even as it attempts to reduce costs.  Forecasting how far and fast digital services will reduce demand for telephone and correspondence is highly uncertain and, so far, digital services have not had the effect HMRC hoped for. While the total number of telephone calls has reduced, the total amount of time advisers are spending on each call has increased, meaning HMRC’s workload has reduced more slowly than reductions in call volumes.  In the face of funding pressures, HMRC has pressed on with attempts to reduce costs despite its poor performance. HMRC and customers have been caught in a declining spiral of service pressures and cuts.  HMRC has been unable to cope with telephone demand and consequently fallen short in processing correspondence and dealing with telephone calls according to procedures, creating further service pressures. HMRC felt it had no choice but to close phone lines to catch up and compel people to use digital services. It has had to reverse this approach in the face of stakeholder opposition.  HMRC now faces a significant challenge without increasing capacity. Its approach to cutting services as it introduces new digital solutions has been too aggressive. HMRC needs to allow more time for new services to bed in, understand the difference they make, and then make staff reductions when the benefits are demonstrated. Otherwise, services will continue to suffer, and unnecessary service pressures and contact will remain.  HMRC cannot be certain that tax revenue is not suffering as a result. There are opportunities to reduce unnecessary levels of contact and improve efficiency. HMRC must demonstrate it understands how to make these gains, and form more realistic plans for how to deliver these, while ensuring it maintains service levels.”