September’s HMRC Digital Update
Highlights of September’s digital update include the up to date position on Making Tax Digital for business and the latest on the Agent Services project.
Digital Services Update – September 2017
Making Tax Digital for Business (MTDfB)
Our MTDfB Income Tax pilot phase is progressing well. Since we launched the controlled go-live phase in April 2017 we have been working closely with a range of Software Vendors, Agents and businesses to test the new service. Agents have been able to subscribe for our new Agent Services account – mapping existing clients into their account. This enables them to subscribe businesses into the MTDfB Income Tax pilot phase and begin making submissions using our Quarterly Income and Expense Service (QIES). The good news is it works! We are continuing to bring more Software Vendors on board which will increase the pool of potential volunteers over the coming weeks.
Our aim is to encourage a wide range of Tax Agents (and their clients) to volunteer as our service grows with additional functionality being added all the time. Businesses with a turnover above the VAT threshold will have to keep their VAT records digitally and send quarterly updates from April 2019, so there is a real opportunity for businesses to get involved early and find out all about MTDfB.
The Government announced on 13 July that it will include legislation for Making Tax Digital for Business (MTDfB) in the next Finance Bill. Details of the announcement are published in Agent Update 61 and there is further information on GOV.UK.
An “Introduction to MTDfB” Agent Talking Points was held on 14/15 September. A recording of the session will be available on GOV.UK Agent toolkits, digital meetings, webinars, e-learning and videos.
Agent Services – MTDfB deliverables
The following services are currently in a controlled go live phase for implementation – user journeys being tested with a limited number of agents. The user journeys which are being tested are:
- Creating an agent services account – this is a one off process that an agency will need to complete to enable the firm and its staff to access MTDfB services
- Linking existing self-assessment clients to the agent services account – this involves linking existing agent codes to the agent service account, so an agency can view their client’s data
- Subscribing a client to the service – an agency can initially subscribe any client which they have an existing relationship with e.g. 64-8 authorisation is in place
- Completing a quarterly update for a client – an agent must have HMRC compatible third party software to do this
During the autumn an authorisation service is being user tested which will allow an agency to send a digital invitation to a taxpayer they wish to represent in MTD. The client can accept or reject the invitation via an HMRC digital tax account.
Making Tax Digital for Individuals (MTDfI)
The MTDfI Programme is delivering world-class digital services for HMRC’s individual customers so that the digital offering becomes the default choice.
The Personal Tax Account
The Personal Tax Account (PTA) has been built using the experience of real customers at each stage. PTA now has over 13 million users as well as the following highlights:
- Over 5 million checked their State Pension forecast
- Over 4 million chosen paperless communication
- Over 3.6 million forms completed online (66 forms available)
- Over 3 million online P800 tax refunds since 2016
- Over 1.5 million views of the tax credit payment service since July 2017
- Over 1 million tax credit renewals in 2017
- 80% overall customer satisfaction
We are continuing to build on this success with further improvements to navigation of the service so that customer journeys are more intuitive. We are investing in improving the view your tax estimate service (tax codes).
PAYE (Dynamic Coding) Improvements
We launched improvements to the PAYE system earlier in July. Under the new system we update customers’ codes much quicker and more accurately, so they are now much more likely to pay the right tax at the right time and not face unexpected tax bills at the end of year, or pay too much tax.
In the past, 8 million customers over or underpaid tax each year. Roughly 5m paid too much and had to claw back a refund. The new system will reduce the number of customers who end up over or underpaid. We aim to introduce future triggers to improve PAYE from November 2017.
Agents
HMRC is committed to making it easier for agents to access information and transact online on behalf of their clients. As part of this work HMRC has been inviting agents to take part in a ‘proof of concept’ trial for a new service, enabling us to test a solution for Agents acting for individuals.
Currently the Service displays the following data fields:
- Pay
- Tax paid
- Employer name
- PAYE reference
Twelve Agents have used the Service and provided very useful feedback. We acknowledge that some Agents have expressed an interest in the trial, but have not been contacted to take part. As a result of unforeseen challenges regarding scheduling it may be that we cannot bring those agents into the trial at this time. We thank you for your patience. In the meantime we will continue to provide updates and will contact you directly when we are able to give you access.
During Autumn 2017, we are looking to enhance and improve the proof of concept trial. This will include functionality to enable participating Agents, once verified by their client, to access client information independently. In response to feedback enabling us to better meet user need, we will increase the number of data fields to include allowances and benefits in kind. We are also exploring whether the number of clients per agent can be increased.
Ultimately, the goal is to scale this proof of concept trial up. This will be an iterative process and as a result we will provide more detail on timelines for this when the trial concludes and we better understand what scaling work will be needed. We will keep you informed via the HMRC Professional Bodies Virtual Communications Group.
Simple Assessment
We are making tax easier and introducing Simple Assessment from 11 September. Initially this will include:
- PAYE customers who have underpaid tax in 2016–17 but cannot have their tax collected through their tax code, and
- State pensioners who first received income over their personal tax allowance in 2016–17 (start date to be confirmed)
Customers will receive a simple assessment letter with a request for payment, which they can make online through their Personal Tax Account. The letter will give details of the tax due and when, the information we used to calculate it and how to pay. Customers will need to check the information we hold is correct. Customers will be able to query their simple assessment and, if the query cannot be resolved, there will be an appeals process. We will continue to update you via the VCG.
iForms
Work is underway to deliver wider ‘Agent Access’ to iForms. Our plans have changed slightly and we no longer plan to use the PAYENICOC Form, as the ‘proof of concept’ prior to deploying the solution wider. We will now draw a candidate form, from one of the 7 live Payroll Agent forms-listed below. As a consequence of this, we now aim to deploy the ‘proof of concept’ Mid- October.
The access model will remove the current need to ‘clone’ the iForm, depending on customer type. One iForm will present any custom agent-client data fields, based on the customer e.g. agent or individual.
The current landing page for agents (which provides a view of the information needed to complete the form) will be retained, and enhanced ‘Save & Retrieve’ functionality will provide secure access for forms that are partially completed and been saved.
CA3821: https://www.tax.service.gov.uk/forms/form/Sending-employees-to-work-abroad-agents/new
CA3822: https://www.tax.service.gov.uk/forms/form/european-economic-area-employees-agents/new
PT_CertOfRes: https://www.tax.service.gov.uk/forms/form/request-for-certificate-of-residence-in-the-uk-agents/new
Cyber Security
Cyber Security Alert
US Internal Revenue Service warns of fake tax software update scam.
Just in time for the seasonal upgrading of tax software in the U.S., the Internal Revenue Service (IRS) has warned of a scam that tricks tax professionals into downloading fake software updates, to harvest log in credentials.
The scammer sends phishing emails with the subject “Software Support Update” and emphasise the requirement for an important software update. To receive the fake update, the email asks the users to revalidate their login credentials by inputting them into a website made to look like the software developer’s portal. The credentials, once collected, are then used to access the tax professional’s account and steal client information.
Accountants and professional service providers often hold large amounts of personal information on their clients, so are a rich target for criminals seeking to access large amounts of sensitive data in a single attack. This threat is not unique to the U.S; scammers have similarly been seen targeting UK professionals in timely attacks that exploit key deadlines.
Talking Points recordings
Missed recent Talking Points meetings? HMRC only keep the recordings for a limited time, so this is your opportunity to catch up on the latest meetings.
What is the Worldwide Disclosure Facility (WDF)?: taxpayers have until September 2018 to use HMRC’s WDF to bring their offshore tax affairs up to date. This meeting covered where to find guidance and support to help you make and complete a correct disclosure.
Construction Industry Scheme (CIS) Basics: this provided a basic overview of CIS, including registration, gross payment status, deductions, record keeping and repayments. The session also covered reporting, including how to correct errors on returns and common errors to avoid.
HMRC Application Programming Interface (API) strategy and delivery update: the session covered how APIs will change the way HMRC works with and supports, tax software developer products used by agents.
These interactive meetings were run on the ‘CITRIX’ platform and the information was correct at the time they were originally broadcast. The future Talking Points programme and links to other recordings we’ve published will continue to be hosted on GOV.UK.
Simple assessment is here
Around 11 million people have to complete a tax return every year to provide HMRC with information about their income. With use of existing data HMRC can now find the information for some of those taxpayers elsewhere without needing them to complete a tax return. This new system is called Simple Assessment and is expected to take up to 2 million people out of self-assessment in 2016–2017.
What it means for taxpayers
From September, HMRC began to use simple assessment starting with two groups:
- new state pensioners with income more than the personal tax allowance in the tax year 2016–2017; and
- PAYE taxpayers who have underpaid tax and who cannot have that tax collected through their tax code
All existing state pensioners who receive state pension over their personal allowance and have received a notice to file a self-assessment for 2016–2017 should complete their return as usual. They will be taken out of self-assessment from the next tax year 2017–2018 and will receive a Simple Assessment notification instead.
