This week’s miscellaneous updates – 19 May 2025

In this week’s miscellaneous updates, we bring you the following:

• HMRC has clarified its position on the claim notification process for certain claims for R&D tax relief and a new tool has been launched which aims to help businesses and individuals understand HMRC compliance checks.
• A new Brief on the use of VAT grouping within the care industry was recently published and the Scottish Government has published the tax advisory group minutes for November 2024.
• HMRC has published guidance on how the changes to company size thresholds from 6 April 2025 affect the application of the off-payroll working rules and the latest schedule of HMRC Talking Points live and recorded webinars for tax agents are available for booking. Spaces are limited, so take a look now and save your place.
• And finally, check HMRC’s online services availability page for details of planned downtime and the online services affected.

R&D tax relief claim notification process

HMRC has recently advised us that their published guidance on claim notifications available from 8 September to 17 October 2024 was not correct and could have misled taxpayers (and their advisers) into believing that a claim notification was not needed where a claim for a previous period which began before 1 April 2023 was made via an amended corporation tax return submitted after that date.

Recognising this, HMRC recently confirmed that they will accept R&D tax relief claims for periods for which a claim notification was due but has not been received if both of the following two conditions are met:

• The company made a valid claim in an amendment to a corporation tax return for an accounting period beginning before 1 April 2023, which was submitted to HMRC between 1 April 2023 and 30 November 2024 inclusive, and
• The accounting period for which a claim notification form was not delivered, but ought to have been, had a claim notification period ending between 8 September 2024 and 30 November 2024.

Revenue and Customs Brief 2 (2025)

Revenue and Customs Brief 2 (2025): the use of VAT grouping within the care industry has been published. This Brief provides information about the treatment of state-regulated care providers that form a VAT group with non-state-regulated providers of welfare services.

It explains:

• how HMRC treat state-regulated care providers who form a VAT group with a non-state-regulated care provider,
• actions HMRC will take with new VAT group applications, and
• actions HMRC will take with existing VAT groups.

These VAT group structures involve both:

• a provider which is not state-regulated, meaning they are not registered with the Care Quality Commission in England or the equivalent bodies in Northern Ireland, Scotland and Wales, and
• a provider that is state-regulated.

HMRC has identified a growing use of VAT grouping structures by state-regulated care providers to recover VAT on costs that relate to supplies of welfare services that would otherwise be exempt from VAT. These structures incorporate an unregulated entity into the supply chain between the state-regulated provider and the local authority or NHS ICB to which the supply is made. Identical supplies made to private individuals remain exempt from VAT.

HMRC consider these VAT grouping structures to be a form of tax avoidance. The Briefing therefore sets out the action that HMRC has begun taking as a result.

HMRC processes PAYE codes before the end of the filing deadline for SA as processing in January allows taxpayers to review and advise of any changes needed before the new tax year starts. You can read more about this process on GOV.UK. SA returns which require clerical overview because of an error may miss the deadline for the PAYE code review hence these tax codes will therefore include the latest available information.