This month’s update features the latest developments on Making Tax Digital and cyber security.

“Making Tax Digital for Business (MTDfB)

Services for paid agents

MTD for Income Tax

From Spring 2018 we plan to open the MTD pilot for Income Tax to all paid agents. This means that agents will be able to:

• Create an Agent Services account
• Copy existing SA client relationships to their Agent Services account
• Sign up new and existing SA clients to quarterly updates. They’ll be able to sign up if their clients current accounting period ends after 5 April 2018 and they’re a sole trader with income from one business.
• Submit quarterly updates through software – only applies when the agent is subscribed to agent services, the client is signed up to the MTD pilot for Income Tax, and the agent has enabled MTD compatible software for the client
• Be authorised by a new MTD SA client (a digital 64-8 for MTDB).

In addition, their clients will be able to

• digitally confirm authorisation to the MTD pilot for Income Tax, and
• digitally cancel authorisation for the MTD pilot for Income Tax.

We will release more functionality throughout the year to allow customers to report other sources of income through software e.g. UK property income, bank interest and dividends.

Access to the new service will be via GOV.UK along with the relevant guidance.

Once the pilot is open, we will steadily raise publicity of the service, starting by notifying stakeholders like this group.

Thank you for your help and support during the private testing of the service. We hope you will continue to promote digital record keeping and the Income Tax pilot to tax professionals once it is publicly available.

We will host Agent Talking Points events on the Income Tax pilot in due course.

MTD for VAT

From Spring 2018, we plan to start a controlled trial of MTD-VAT for a small number of businesses, and where applicable their agents

• Software developers are making good progress – many working in our secure test environment.
• Majority expect to have new or existing products ready during the pilot.
• A number are on track to release versions when the pilot starts.
• We are also working with businesses and agents who use bespoke software to ensure in-house systems are ready.

Live testing is due to start in April 2018. We plan to invite the simplest businesses, represented and unrepresented, to join the pilot. This will mean Agents will need to:

• Sign up to Agent Services and create an Agent Services account if they haven’t already created one
• Copy existing VAT client relationships to their new Agent Services account
• Sign up an existing VAT client to submit VAT returns through the new service
• Submit the client’s return through enabled software – this is only possible when an agent is subscribed to agent services and client is signed up to MTD-VAT.

Volunteers will join by invitation and more complex businesses will be invited to join as the pilot progresses.

We will publish more information via the usual agent communication channels. If you would like to take part in the pilot, please email us at makingtaxdigital.mailbox@hmrc.gsi.gov.uk.

Agent Talking Points

Due to the popularity of the February Talking Points Webinar on MTD for VAT, we ran two more sessions on 6 March. They were also very popular with a combined audience of over 2,000.

The technical consultation on Draft VAT Regs and Notice closed 9 Feb. We received sixty responses from:

• professional bodies
• large agents
• large and small businesses

Most feedback related to draft Notice and there will be further engagement with key stakeholders on the details.

Making Tax Digital for Individuals (MTDfI)

The Personal Tax Account

The Personal Tax Account (PTA) continues to grow in popularity with more than 14.6 million users. Some headlines include:

• 7 million checked their State Pension forecast
• 8 million checked their tax estimate service
• 5 million opted in to paperless communication
• 8 million views of the new tax credit payment service using both the PTA and App
• 78% of customers were satisfied with the PTA.

Annual Tax on Enveloped Dwellings (ATED) – returns for 2018/19 period

From 1 April 2018, all online ATED returns must be filed using the ATED digital service. Register now with HMRC to use this service. The old style online forms will be withdrawn in March and can no longer be used for submitting a return for the 2018/19 period.

Taxpayers can prepare for the annual reporting period and appoint their agent if they have not already done so. Go to ATED Online for more information. The 2018/19 online return forms and relief return forms are now available for customers to populate, but please note that you will not be able to submit a return until 1 April 2018, which is the start of the tax year.

The ATED charge for the 2018-19 period is based on the property’s value as at 1 April 2017, or the date the property was acquired if that is later.

The majority of agents and customers have now registered. We’re continuing to see increased numbers of registrations as we approach the 2018-19 filing period. Don’t leave it until the last minute!

For further information, you can view a recording of the Talking Points ATED meeting for a walkthrough of the online screens.

Cyber Security

iTunes gift card scam

We are continuing to raise awareness of a high-profile iTunes phone scam which is conning vulnerable and elderly people out of thousands of pounds.

The scammers prey on victims by cold calling them and impersonating HMRC members of staff. They tell them that they owe large amounts of tax which they can only pay off through Apple’s iTunes vouchers. Victims are told to go to a local shop, buy these vouchers, and then read out the redemption codes to the scammer. The conmen then sell on the codes or purchase high-value products, all at the victim’s expense.

HMRC is taking action to shut down scamming operations including identifying and initiating the removal of website links used by criminals, blocking text messages, blocking emails, and recent high profile awareness campaigns.

Individuals who believe they have been affected by this, or any scam, should contact Action Fraud on 0300 123 2040 or use their online fraud reporting tool.

Taking care with Remote Desktop Access

Many businesses enjoy the flexibility that remote access to their IT systems provides. Remote Desktop Access allows staff working away from the office to remotely access work computer systems from home or from client sites.

Remote Desktop Protocol (RDP) also allows cybercriminals to gain unauthorised access to open/unprotected systems which use RDP by scanning the internet looking for open RDP access. Many people and groups have a variety of motives for attacking IT systems including installing ransomware, which encrypts files and demands payment for their release; accessing online accounts using saved login credentials; downloading malicious software to harvest data enabling them to target online banking and other accounts.

There are a number ways to use RDP safely, such as using a Virtual Private Network (VPN) to connect to your office IT systems. VPN also has other security benefits when working away from the office.

Many software companies use of remote access technology to provide remote support, taking control of their customer’s computer temporarily to help them through issues with their products. Cybercriminals also use remote access technology and makes changes to IT systems so that people don’t see that someone has remotely access their IT system.

Having a record of what applications you have installed on your computer forms part of the National Cyber Security Centre (NCSC) 10 Steps to Cyber Security. We recommend that you review this regularly to help you identify any unexpected programs and maintain good overall IT security.

Further information on the 10 Steps and other useful guidance is available on the NCSC website: https://www.ncsc.gov.uk/guidance/10-steps-cyber-security.

Corporate Interest Restriction

Where a worldwide group has net tax-interest expense and other financing costs exceeding £2 million per annum, the Corporation Tax deduction available for this expense may be restricted. If a worldwide group is caught by these CIR rules, they must appoint a reporting company and submit a full corporate interest restriction return. If a group isn’t caught by the rules now but may be caught in future, they may wish to submit an abbreviated return to protect their position. Up-to-date guidance has been published.

Appointing a reporting company and filing a return

The deadlines will depend on the group’s period of account. If the group should send in a full return or chooses to send in an abbreviated return, it will have until at least 31 March 2018 to appoint a reporting company. The appointment is made by means of notification to HMRC, which must be accompanied by a list of companies that have authorised the notice and a statement that this represents at least 50% of eligible companies. This notification can be made to HMRC via a digital form through the government gateway. A link to the form and additional information can be found online.

The reporting company will then have until at least 30 June 2018 to send in a full or abbreviated return. A return can be submitted by a digital form via the government gateway. This form and supplementary worksheets will be published on the webpage link above by the end of March.

Elections outside of the return

Some elections should be made within a full interest restriction return but there are others that can be made outside of the interest restriction return. There is no set format for these other elections. Please send the elections to the group’s Customer Compliance Manager (CCM), or if the group doesn’t have a CCM, the elections should be sent to:

Wealthy and Mid-sized Compliance

HM Revenue and Customs

BX9 1BN

United Kingdom

Trust Registration Service

Duplicate UTR’s created by agents

If your trust or estate has already been issued with an SA UTR, when you register it through the Trusts Registration Service you must ensure that you choose the correct option at the start of the registration process – please select the “Register an existing trust” option after you have logged into the service.

It has come to our attention that some existing trusts or estates have been incorrectly registered as new trusts or estates. This will mean that they will be issued with a new SA UTR which will create additional work for both the lead trustee/personal representative or their agent and HMRC as they are likely to receive additional notices to file which may result in penalties for late filing.

In this situation, the lead trustee/personal representative or their agent will need to write to HMRC at the usual address to notify us of this new SA UTR so that it can be closed. The trust will also need to be registered correctly through the Trusts Registration Service as an existing trust using the original SA UTR.”

END OF HMRC UPDATE