HMRC Stakeholder Digest - 22 June 2023

21 Jun 2023

Please see the following message from HMRC, which we are sharing for information:

The HMRC Stakeholder Digest provides a round-up of our latest news and updates, which we’d be grateful if you could share with your clients, customers, or members. This issue includes: 

Updates

Measuring Tax Gaps 2023 report published today

The Measuring Tax Gaps report is our annual publication, covering tax gap estimates for all the taxes, levies and duties we administer. This includes estimates of the overall tax gap, and tax gap split by tax type, customer group and behaviour between 2005-06 to 2021-22.

In our latest report, the UK tax gap in 2021 to 2022 is estimated to be 4.8% of total theoretical tax liabilities, or £35.8 billion in absolute terms - which means we collected 95.2% of all tax due. The tax gap has remained low and stable since 2017-18.

Further findings for the 2021 to 2022 tax gap publication show:

  • at 56% (£20.2 billion), small businesses represent the largest proportion of the tax gap by customer group, followed by criminals, large businesses and mid-sized businesses at 11% each (£4.1 billion, £3.9 billion and £3.8 billion respectively)
  • individuals account for around 6% (£2.1 billion) of the overall tax gap and, at 5% (£1.7 billion), wealthy individuals have the smallest tax gap by customer group
  • Income Tax, National Insurance contributions and Capital Gains Tax makes up 35% (£12.7 billion) of the total tax gap when measured by type of tax
  • Corporation Tax is now estimated as the second largest component of tax gap by tax type at 30% (£10.6 billion). New data has increased our understanding of CT tax gap, resulting in revised forecasts
  • the VAT gap continues a long-term downward trend falling from 14% (£11.9 billion) in 2005 to 2006 to 5.4% (£7.6 billion)
  • failure to take reasonable care (30%), error (15%), evasion (13%), legal interpretation (12%) criminal attacks (11%) and non-payment (9%) are among the main behavioural reasons for the tax gap.

We publish the tax gap because we believe transparency in our work is important - you can read the full Measuring Tax Gaps 2023 publication on GOV.UK.

IT upgrade over the weekend of 23 to 26 June

We will be making planned upgrades to some of our IT systems, starting from midday on Friday 23 June until 9am on Monday 26 June. This will involve moving our internal systems that support tax for individuals to a cloud-hosting solution, to make them more resilient, reliable and secure.

The move means some of our helplines, webchats and online services will be unavailable or have limited functionality during this period.

Helplines

Some customer helplines will also be unavailable on Friday afternoon, including National Insurance and PAYE helplines. For other helplines relating to tax for individuals, our advisers may only be able to provide general advice. 

Digital services

The following digital services will be unavailable while we carry out this work. Customers trying to access these services over this period will see a message to say the service is unavailable. 

  • Check your State Pension
  • Child Benefit
  • Claim a Tax refund
  • Class 2 National Insurance
  • Company Car
  • Employee Expenses
  • Help to Save
  • Marriage Allowance
  • Medical Benefits
  • PAYE Check Your Income Tax Service
  • Pensions Lifetime Allowance
  • Repayments
  • Tax Calculation
  • Trusted Helpers

Further details of services affected can also be found on our service availability and issues page on GOV.UK.

Please share this information with your clients and members to make them aware of the disruption to our helplines and digital services over the weekend. We apologise for any inconvenience this may cause.

Deadline for voluntary National Insurance contributions extended to 5 April 2025

Eligible customers now have until 5 April 2025 to fill gaps in their National Insurance record for tax years from April 2006 – to possibly increase their State Pension.

Men born after 5 April 1951 or women born after 5 April 1953 have more time to check their records, decide whether to pay voluntary contributions to make up for gaps in their National Insurance record and be able to afford to do so.

Your clients and members can find out more information about the deadline for voluntary National Insurance contributions extended to 5 April 2025 on GOV.UK.

Publication of National Audit Office report on Making Tax Digital

Last week, the National Audit Office published their report on Making Tax Digital (MTD).

We have worked closely with the NAO as they have developed their report and welcome the scrutiny and perspective that it offers on the programme, including recognition of our progress in digitalising the tax system, and its confirmation that our plans can bring a step-change in its efficiency and effectiveness.

We will carefully consider the NAO’s recommendations, several of which reflect work already underway and continue to work closely with stakeholders to enable us to make the best preparations for MTD for Income Tax Self Assessment.

OCED Pillar 2 framework legislation changes

The government introduced legislation in the Finance Bill 2022/23, to implement the globally agreed G20-OECD Pillar 2 framework in the UK.  

The legislation will introduce:

  • a multinational top-up tax which will require large UK headquartered multinational groups to pay a top-up tax where their foreign operations have an effective tax rate of less than 15%  
  • a domestic top-up tax which will require large groups, including those operating exclusively in the UK, to pay a top-up tax where their UK operations have an effective tax rate of less than 15%.  

These changes will apply to large groups with over 750 million euros global revenues and will take effect in relation to accounting periods beginning on or after 31 December 2023. 

As part of our commitment to support customers during change, we have contacted businesses we believe are likely in scope of OECD Pillar 2. We have provided key information about the new international tax framework and where they can find further guidance. 

We’ll be providing regular updates on Pillar 2 developments to support business with the upcoming change. We are making good progress in implementing changes as part of the G20/OECD agreement to reform the international tax framework, ahead of the first commencement date of 31 December 2023.   

Shared on behalf of other government departments

Apply for higher level of support for energy bills by 25 July 2023

The Department for Energy Security and Net Zero are encouraging those organisations who require a higher level of support, including Energy and Trade Intensive Industries and from the Energy Bills Discount Scheme (EBDS), to take action by 25 July 2023.

The Energy Bills Discount Scheme (EBDS) commenced on 1 April and will run until 31 March 2024. Under the scheme, the government will provide a baseline discount to support energy bills for eligible non-domestic customers in Great Britain and Northern Ireland.

As with the original Energy Bill Relief Scheme (EBRS), suppliers will automatically apply reductions to the bills of all eligible non-domestic customers.

Businesses can apply for the Energy Bills Discount Scheme support for Eligible Energy and Trade Intensive Industries and view the complete list of eligible sectors on GOV.UK.

Please share this information with your networks to make them aware of any action they might need to take to secure their energy bills support.

Open consultations

Introducing a voluntary standard for customs intermediaries consultation

We are inviting businesses and organisations across the borders industry to share their views on a consultation on introducing a voluntary standard for the customs intermediaries on GOV.UK.

The consultation launched on 5 June will run for 12 weeks and aims to improve the quality of the service across the customs intermediary sector. This is part of the Spring Budget 2023 customs measures on GOV.UK.

Participants can provide feedback by emailing [email protected].

We’ll also be hosting several webinars to engage with interested parties on the consultation. If your clients and members would like to attend these webinars, please let us know by email.