HMRC Stakeholder Digest – 23 September 2021

Please see the following message which we are sharing on behalf of HMRC:

This 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.

The government has set up a dedicated support page where businesses can find the right support, advice and information to help with the impact of coronavirus (COVID-19).

Making Tax Digital (MTD) – Today’s Announcement 

The government announced today in a Written Ministerial Statement (WMS) that MTD for Income Tax Self Assessment (ITSA) will be introduced in the tax year beginning in April 2024. This is in recognition of the challenges faced by many UK businesses and their representatives as the country emerges from the pandemic over the last year, and having listened to stakeholder feedback.

General partnerships will not be required to join MTD for ITSA until the tax year beginning in April 2025. The date at which all other types of partnerships will be required to join will be confirmed later. 

In March 2021, the government announced a new system of penalties for the late filing and late payment of tax for ITSA. This will now be introduced for those who are mandated for MTD for ITSA in the tax year beginning in April 2024, and for all other ITSA customers in the tax year beginning in April 2025.   

In addition, the government has today laid Regulations in Parliament setting out the design and scope of MTD for ITSA, in order to help those impacted by the changes to prepare, and for their representatives to develop their own support and guidance.  

Alongside the Regulations, we have published a Tax Information and Impact Note (TIIN) setting out the projected benefit and cost impacts of MTD for ITSA, as well as a Policy Paper to help different businesses understand what their transition to MTD could look like in more detail.   

Over the past year, we have worked closely with partners in the business, tax and software community on MTD. We are grateful for the significant stakeholder input we have received, and we look forward to continuing to work together with stakeholders to ensure taxpayers are well supported as they adopt MTD.   

The government has also recently consulted on a reform of the complex basis period rules that govern how self-employed profits are allocated to tax years. Many respondents said that the reform was a sensible simplification but asked for more time to implement the changes. In recognition of these concerns, these changes will not come into effect before 2023/24. The government will respond to the consultation in due course providing the next steps. 

A news release covering today’s announcement is available here.

Partial Exemption Special Methods (PESM) Application Process (G-Form)

In July 2019, the government launched a call for evidence on the simplification of the VAT Partial Exemption (PE) and Capital Goods Scheme (CGS) regimes. Having evaluated these responses, an internal review was carried out to assess the process for applying for a PESM and how this can be simplified.

On 16 August 2021, HMRC launched a new ‘PESM G-Form’. The new form, available on gov.uk, sets out the relevant information required to obtain approval of a PESM and provides step-by-step instructions on how to use the new form.

The G-Form can be accessed here.

Public Accounts Committee

This morning Angela MacDonald, Second Permanent Secretary and Deputy Chief Executive of HMRC, spoke at the Public Accounts Committee on ‘The Challenges in Implementing Digital Change’. A full recording of the proceeding is available to watch here.