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Working Together issue 29 - January 2008


Improving Contact Centre services for agents

Responding to feedback from tax agent representatives at the Working Together Steering Group (WTSG), meeting on 5 December 2007, HM Revenue and Customs (HMRC) Contact Centres agreed to introduce a new Agent Dedicated Line in each taxes Contact Centre. The new line will be introduced to each Contact Centre on a rolling basis. In phase 1 of the programme, the line became operational in East Kilbride and Bradford Contact Centres on Thursday 20 December 2007. The Agent Dedicated Line will be extended to the other taxes sites in early 2008. However operational demands throughout January may mean that the Agent Dedicated Line is not available in the other sites until February 2008 at the earliest.

The new Agent Dedicated Lines are intended for all agent enquiries for taxpayer-specific calls about Self Assessment (SA) and Pay As You Earn (PAYE) for individuals and partnership matters. The range of business you can conduct by telephone with the Contact Centres is outlined in our How to Contact HMRC Guide. The new agent Dedicated Lines will replace the existing agent priority lines as outlined below.

The new contact telephone numbers

The new Agent Dedicated Lines offer the following improvements:

  • Calls to the Agent Dedicated Line will be given priority over other calls received in to the Contact Centre
  • Calls to the Agent Dedicated Lines will be routed to an adviser with at least 12 months experience
  • When an adviser cannot complete the call they will transfer the call directly to a technician. This again will be given a high priority
  • When a technician cannot complete the call they will transfer the call directly to a technically trained Higher Officer (HO) within Contact Centres
  • When the HO specialist cannot complete the call they will pass it over to an appropriate specialist in other business streams – primarily processing and compliance.

31 January 2008 filing date

The statutory filing date is 31 January 2008 for returns issued at the normal time. Any return received after that date is late.

And so, any return received after Thursday 31 January will be late for enquiry purposes, regardless of whether that return is received online, through the post or through a letterbox.

Any returns received up until the end of Friday 1 February will not incur a penalty. This affect of this is as follows:

Electronic returns

Electronic returns received before 00.00 hours on 2 February will not incur a penalty.

Postal returns

All postal returns received before 00.00 on 2 February will also not incur a penalty. In practice this means that any returns received in the last post on 1 February will not incur a penalty but postal returns received after this, for example on Monday 4 February will be liable to a penalty (as they were delivered after 00.00 on 2 February).

HMRC letterboxes

Returns delivered through a letterbox before 00.00 on Saturday 2 February will not incur a penalty. As our offices will not be open on Saturday 2 February, in line with the Special Commissioner’s decision in Steeden v Carver, we will assume that any return received in an HMRC office letterbox by 07.30 on Monday 4 February was placed there before 00.00 on 2 February and so no penalty will be issued for those returns.

Filing online

With the busiest time of year for filing SA Returns coming up, we recommend that agents spread their online filing load in the run up to 31 January. For information, the off-peak filing periods are expected to be on Saturday 26 and Sunday 27 January and any time between 17.00 and 08.00 on weekdays.

Recording deferment of Class 4 NI Contributions on the return

Customers with deferment of Class 4 National Insurance Contributions (NICs) are required to pay Class 4 NICs with their tax at a rate of 1 per cent on all profits above the Lower Profit Limit.

Some customers with deferment have not noted their return for the relevant tax year. Because deferment has not been noted on the return, Class 4 NICs have been paid at the full rate of 8 per cent instead of the 1 per cent rate that should have been paid.

Deferment of Class 4 NICs can only be granted by Deferment Services, who will send confirmation details on form CA2703 Granted Deferment of Liability for Class 2 and Class 4 National Insurance Contributions. Deferment Services will assess and collect any deferred Class 4 NICs.

Can we remind customers with deferment that they should tick the deferment box on the return, but only when form CA2703 has been received from Deferment Services, and only for the tax year to which the form CA2703 refers.

VAT Registration -top tips for completing form VAT 1 Application Form

Please see our VAT Registration - top tips for completing the form VAT 1 Application for registration.

These tips arose from a registration workshop attended by VAT practitioners and HMRC personnel. They address some common issues which contribute to the high error rate in the completion of form VAT 1.

Further information

Further information is available on our website follow the VAT link on the Businesses and Corporations group on the homepage.

For more detailed information: click on the Practitioner Zone button on the top right of the homepage, then follow the Intermediaries (VAT and Customs) link.

You can also call the HM Revenue & Customs National Advice Service on: 0845 010 9000.

Tax return filing peak - Contact Centres and helplines

The Self Assessment (SA) Helpline is available 8.00 am – 8.00 pm seven days a week and offers general advice and assistance with completion of tax teturns. Additional staff will be employed on this line during the SA filing peak and we will aim to provide the maximum availability of advisers during the busiest times in the day, usually 9.00 am -5.00 pm. You can contact the SA Helpline on 0845 900 0444.

The Online Services Helpdesk offers support to customers who wish to file their SA Return online. It is open 8.00 am – 8.00 pm seven days a week and on week nights between 21 and 31 January it will remain open until 10.00 pm. Additional staff will be employed on the Online Services Helpdesk during the peak and we will aim to provide the maximum availability of advisers at the busiest times. You can contact the Online Services Helpdesk on 0845 605 5999.

Information about Self Assessment and other tax matters is available. Self Assessment Online offers significant advantages over the traditional paper tax return:

  • it is secure, accurate and automatically calculates the tax liability
  • it provides a prompt acknowledgement and faster repayment if one is due
  • liabilities and payments can be viewed online

There are various Contact Centres located throughout the country which deal with specific enquiries about customers records. They are open Monday – Friday 8.00 am – 8.00 pm and Saturday 8.00 am – 4.00 pm. Belfast Contact Centre is open Monday – Friday 8.30 am – 5.00 pm. Arrangements are in place to ensure advisers on these lines are able to concentrate on taking calls from taxpayers and agents with specific enquiries. The various Contact Centre telephone numbers are available on our website.

Complex Personal Returns Teams – an important reminder

If you represent a client whose affairs are dealt with by one of our Complex Personal Returns (CPR) teams, remember you should send all correspondence direct to the team which handles your client’s tax affairs.

Once you have received a letter from us telling you that one of your clients will be dealt with in one of our CPR teams, please remember to:

  • send back any correspondence including Tax Returns to the CPR team and not to the issuing office
  • ensure that you show the CPR team address if you are using a substitute tax return

Your correspondence will then be dealt with by your client’s allocated personal case owner.

The CPR team’s addresses are listed below.

Complex Personal Return Team
East Hampshire and Wight
Wingfield House
Commercial Road

Complex Personal Return Team
West Yorks and Craven
Crown House
Victoria Street
BD17 7TW

Complex Personal Return Team
South Wales
1 East
Phase Two
Ty Glas Road
CF14 5ZX

Complex Personal Return Team
North East Metropolitan
Weardale House
Tyne and Wear
NE37 1LW

Complex Personal Return Team
Birmingham Solihull
City Centre House
30 Union Street
B2 4AP

Complex Personal Return Team
Centre 1
Queensway House
Stewartfield Way
East Kilbride
G79 1AA

Complex Personal Return Team
Chapel Wharf
Trinity Bridge House
Dearmans Place
M3 5BW

Corporation Tax - avoiding late-filing penaltydeterminations where an accounting period ends during a period of account

Getting inappropriate late-filing penalty determinations annoys companies and agents, causes everyone unnecessary work to cancel them, but can happen when a company’s accounting period ends during the period for which it makes up its accounts.

HM Revenue and Customs (HMRC) has recently changed its internal guidance to improve its returns processing procedures to avoid this but it also need help from agents to stop it happening.


The Companies Act requires every company to prepare annual accounts that report on its performance and activities for its accounting reference period, which ends on its accounting reference date (Section 391 Companies Act 2006).

That date is relevant for tax purposes too because the period for which the company makes up accounts (its period of account) ends on that date (Section 832(1) Income and Corporation Taxes Act 1988 and Paragraph 14(2) Schedule 18 Finance Act 1998).

The Taxes Acts provide rules for determining the basis of, and periods for, assessment of Corporation Tax and companies have to make returns for those accounting periods (S12 ICTA 88).

A company’s period of account and accounting period normally coincide, and the company usually has to file its company tax return with HMRC 12 months after their common end date. But that pattern can be broken by any event which causes an accounting period to end for tax purposes during a period of account - such as the company ceasing to trade or it revising its accounting reference date. There is then an accounting period that does not end on an accounting reference date.

If a company files a return for an accounting period that ends during a period of account, the filing date is normally 12 months after the end (but no more than 30 months after the start) of that period of account. The filing date will therefore be more than 12 months after the end of the accounting period covered by the return (Paragraph 14(1) (b) & (c) Sch 18 FA 98).

HMRC processes and procedures

Accounting periods are fundamental to HMRC’s Corporation Tax computer system but it does not, and normally has no need to, recognise periods of account. Consequently, the system does not automatically calculate the later filing date rules mentioned above.

Instead, HMRC staff have to identify returns for accounting periods covered by accounts which don’t share a common start and end date, then change the company’s accounting period record and enter the correct filing date on their system.

HMRC has altered its procedural guidance to highlight the issue, publicised it internally and mentioned it on the Business Link.

HMRC expects that to reduce the instances of inappropriate penalty determinations, but some cases may still slip through as this is a manual process carried out by staff under considerable time pressure.

Companies and agents can help HMRC to avoid that by alerting us to returns (either in advance or when filing) for accounting periods which end during a period of account. That, together with HMRC’s procedural changes, should minimise the possibility of companies getting inappropriate penalties.

'Take control and update your records online' - article

In the last issue we gave you details about the enhancements that took place in June for Corporation Tax Online customers and agents authorised to act for them online. This enabled you to update certain records held by us. We also told you that the next enhancement (covering PAYE Online customers/their authorised agents, Self Assessment (SA) Trusts & Partnerships/their agents and agents acting for SA individuals who use the SA Online Service) would take place last autumn. Unfortunately, this will now not take place until spring 2008. More detail about these enhancements will be published closer to that time.

Collection of student loans - important changes to start and stop notices

As part of their employer responsibilities, employers must start and stop the collection of student loan repayments when notified by HM Revenue and Customs (HMRC). Where an employee has been in higher education and is liable to repay a student loan, an employer will be notified to start and stop these loan repayments on a Start SL1 or a Stop SL2 notice. Up until 5 April 2008 employers have to implement a 42-day rule when they receive Start (SL1) and Stop (SL2) notices, but from April 2008 legislative changes come into force which remove this 42-day time constraint. From April 2008 employers will have to start making student loan repayments on the 'first available' pay day following the 'start date' as printed on the SL1 notice. Similarly they will have to stop making student loan repayments on the 'first available' pay day following the 'stop date' as printed on the SL2 notice.

Advisory Fuel Rates

HM Revenue and Customs (HMRC) has recently concluded proposals to simplify the way in which Advisory Fuel Rates (AFRs) are published. The response to the proposals was positive and there was a general consensus that they were a welcome move which would clarify the existing framework and make it easier to implement future changes to the AFRs. HMRC is aware of the need to strike a balance between giving certainty for employers on the level of rates and reimbursing drivers for the cost of fuel.

It was agreed by all contributors that one month’s notice should be given of any change to the rates and that bi-annual reviews are an acceptable compromise. Most contributors also favoured a review of the rates if the fluctuation exceeds 5 per cent, although this will be monitored by HMRC to ensure it does not generate unnecessary rate changes. The timing of the reviews has been discussed in depth but as AFRs are intended to broadly reflect the variances in the cost of fuel, based on recent data, the optimum dates for changing the rates are 1 July and 1 January. HMRC will announce any necessary changes to AFRs on the website on 1 June and 1 December to allow employers the necessary time to implement them.

In summary, HMRC will:

  • review the Advisory Fuel Rates bi-annually with a view to implementing any changes on 1 January and 1 July
  • give one month’s notice prior to any change
  • consider changing the rates if the cost of fuel fluctuates +/- 5 per cent
  • continue to round up or down to the nearest pence, to maintain the balance between drivers reimbursing their employer for fuel used for private journeys and those who claim from their employer the cost of fuel for business journeys.