This week we bring you an update from HMRC on the use of digital signatures and HMRC has published updated guidance on the patent box regime and senior accounting officer legislation. The advisory fuel rates which took effect from 1 September 2023 are available and HMRC has launched a new childcare manual. The House of Commons Treasury Committee has published a report following its inquiry on tax reliefs and new guidance on how to get a PAYE code adjusted for foreign tax has been published. HMRC has also provided an update on corporate criminal offence investigations and new Save As You Earn (“SAYE”) bonus rates and early leaver rates took effect from 18 August 2023. The latest Agent Update 112 is also available.
Update on digital signatures
Read the update below from HMRC on digital signatures.
“HMRC accept digital signatures on the following forms: 64-8 (Agent Authorisation); Marriage Allowance; P87 and Hold Over Relief (HS295). For these forms, signatures signed on the screen of a digital device or displayed in a keyboard typed font will be accepted. All other claims and paper tax returns will still require a wet signature. Regardless of the type of signature, it must be provided by the taxpayer. Where the taxpayer or agent submits a form or claim as part of a digital journey (e.g. submitting a tax return online) then their identity is verified as part of the digital journey and as such a signature is not required.
During the Covid-19 pandemic, a number of easements were in place during this unprecedented national emergency. However, signatures are an important safeguard for taxpayers, which outside of a national emergency HMRC cannot dispense with.
HMRC accept a scan of a wet signature on holdover relief claims (form HS295) when this is attached to an online tax return. In other circumstances we require a wet signature apart from those outlined above.
HMRC has issued guidance on record keeping. Records can be kept in a variety of formats: on paper, digitally or as part of a software program. However, there are some records that, by law, must be kept and preserved in their original form. For example, a C79 import VAT certificate (Record keeping for VAT notice 700/21). The Taxes Management Act 1970 s12B and the Finance Act 1998 Sch 18, para 22 provide further detailed information on record keeping including those records that must be preserved in their original form.
We are working on bringing the guidance together and will be issuing further updates in due course.”
Treasury Committee recommends review of tax reliefs
The House of Commons Treasury Committee recently published the outcome of its inquiry into tax reliefs in a report which, unsurprisingly, concluded that the UK tax system is too complicated, and that the “huge and seemingly ever-expanding suite of tax reliefs” is an important factor in this.
To promote a simpler, better value and more effective tax system which is less prone to abuse the Committee made the following recommendations:-
- a comprehensive and systematic review of existing tax reliefs to look for opportunities for simplification;
- HMRC should publish full costings of all tax reliefs;
- greater public consultation is needed on new and existing tax reliefs;
- ·non-structural tax reliefs, i.e., those designed to promote certain behaviour, should be classed as public spending, and scrutinised as such; and
- the Government should conduct five-year reviews of individual tax reliefs and commit to remove those reliefs that no longer serve their policy goal or are vulnerable to abuse.
Relief for foreign taxes in PAYE codes
If an employee works overseas, some overseas tax authorities may require their UK employer to deduct tax from the same earnings against which the employer also has to operate UK payroll. Where an employee’s PAYE code needs adjusted to give relief for foreign tax, HMRC advises the employee or their employer to make contact by phone, stating that their call relates to coding in accordance with section PAYE81715 of HMRC’s PAYE manual.
HMRC release data on corporate criminal offence investigations
HMRC has recently released updated data on the number of corporate criminal offence investigations in progress as at 30 June 2023. At that date, there were nine live investigations with a further 25 potential investigations under review, and 83 rejected.
The Corporate Criminal Offences for failure to prevent the facilitation of tax evasion were introduced by Part 3 of the Criminal Finances Act 2017. With potentially unlimited fines for organisations found guilty of the offences, organisations must take their responsibilities seriously and put in place reasonable procedures to stop the facilitation of tax evasion.
SAYE bonus rates
According to the latest Employment Related Securities Bulletin, after the launch of the new Save As You Earn (“SAYE”) bonus rates automatic mechanism and specimen SAYE prospectus, new SAYE bonus rates and early leaver rate took effect from 18 August 2023.
These are:-
- 3-year bonus rate: 1.1;
- 5-year bonus rate: 3.2; and
- early leaver rate: 1.42%.
This is the first time that new participants will receive a bonus since 2014.
Going forward, the rates will change on the 15th day following a change in the Bank of England Bank Rate. The next date the Bank of England may be expected to change the Bank Rate is next month as the Bank decided last week to maintain the base rate.
HMRC will not routinely provide updates within Bulletins. However, the bonus rates, early leaver rate and the effective date of any change will be recorded in change in bonus rates for SAYE Share Option Schemes
Agent Update 112
Get the latest guidance and information in Agent Update 112 including the following:-
- Alcohol Duty: apply the new duty rates and check the 2 new reliefs, before submitting a return this month;
- The Plastic Packaging Tax – mass balance approach consultation;
- Self-Assessment student loan deductions and payrolled benefits in kind; and
- Overlap relief – preparing for the new tax year basis.
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