HMRC will no longer send out letters in the post advising taxpayers of self assessment repayment notifications, claiming they simply caused confusion
The change was announced on 7 December and came into effect immediately affecting notifications about all Bacs self assessment repayments.
This will affect tax advisers and individual taxpayers. Instead of a letter, HMRC will send out a digital confirmation although this will not start immediately as the IT system has to be updated to handle the change.
In an update to accountants and tax advisers, HMRC said: ‘We’re changing how we let you and your clients know we’ve issued a SA Bacs electronic repayment. There is no change to the repayment process itself, so customers will still receive any monies owed to them through their bank as normal.
‘We’ll no longer send a letter informing you or your client of an SA repayment. We often find these letters arrive after the repayment has been made leading to confusion and increased contact from customers.
‘We are making improvements to our IT systems in relation to SA repayments, so we are also temporarily pausing digital notifications from 7 December 2023 while we do this. We’ll let you know when these notifications are reinstated.’
HMRC has clearly judged that the volume of calls about repayment issues is too high and sees this as an area where it can reduce costs. The end of letter communications should reduce pressure on limited resources in call centres, while also saving on the cost of producing letters and postage.
Accountants and individual taxpayers will still be able to view repayment transactions through HMRC online services. The information will be available in agents accounts, where agents can review transactions for their clients. Individuals will be able to access their HMRC online account to review any transactions and can also sign up to receive digital notifications, although this service is currently suspended.
The end of repayment letters was announced at the same time as HMRC seriously curtailed the use of self assessment helplines in the run-up to the tax return season. This will see HMRC call handlers only dealing with the most complex enquiries, while all callers will be met with a message stating that the majority of queries can be handled online on HMRC’s website. They will also be sent a text message, if they have called on a mobile, advising them where to find the information requested.
The reduction in helplines will also hit accountants, with the agents dedicated line handling only the most complex queries during the self assessment season, while HMRC call handlers will not deal with any PAYE-related questions until February.
Accountancy bodies criticised the move, pointing to a major resource issue at HMRC, which has seen a number of service cuts in recent months.
John Barnett, chair of CIOT’s technical policy and oversight committee said: ‘We are concerned that in practice many of their customers will be unable to navigate HMRC’s digital services and will simply give up.
‘Previous trials to limit calls to complex queries, or diverting people to online services, have proven either troublesome or inconclusive.’
Digital platforms like eBay, Vinted and Airbnb will have to report seller data to HMRC from January giving the tax authority access to unparalleled information, warns Miruna Constantin, tax manager at RSM
Are you one of the millions of UK individuals selling second hand clothes on digital platforms? Whether you’ve been caught by the Marie Kondo urge to declutter and detoxify your wardrobe, or have a side hustle on platforms such as Vinted, Vestiaire Collective, eBay or Etsy, HMRC will be keen to find out more about potential untaxed income.
Vinted has over 8m registered sellers in the UK with some users claiming they have turned selling second hand clothing into a full-time job and thanks to new information powers HMRC will start to know about that income.
From 1 January 2024, digital platforms will have to start collecting seller data and pass that over to HMRC to match against taxpayers’ records to make sure people report the right information on their tax returns.
The measures also impact those renting out properties on Airbnb (among other platforms) or people selling their services online, and these platforms have been warned to brace themselves against landing in hot waters with HMRC.
The first reporting deadline for online platforms will be 31 January 2025 and to meet these requirements they will need to implement new ways of collecting seller information so that HMRC can match and verify it against taxpayers’ records to make sure individuals are correctly reporting their income on their tax returns.
There will be hefty fines and penalties for failing to submit reports or submitting ‘inaccurate, incomplete, unverified sellers’ records’ so the platforms will be incentivised to ensure they meet their reporting obligations.
If you are an occasional seller receiving no more than £1,700 for fewer than 30 sales in a reporting period, your information is not required to be provided to HMRC. However, that doesn’t mean you do not have any tax reporting obligations.
Depending on whether you have a profit-seeking motive (for example, some online platform users buy premium items from outlets and then sell them at a profit online), the number of transactions you make, or the nature of the assets you sell, your little side hustle might be seen as trading.
In this case a self-assessment tax return will need to be filed with HMRC and income tax and National Insurance contributions paid accordingly. If you make sales of £1,000 or more in a year, you will need to consider whether a tax return is required.
The good news is the information collected by platforms must be shared with HMRC as well as with sellers, which should help taxpayers get their affairs right. It could however bring a whole new raft of unaware individuals within HMRC’s reach and could make some taxpayers think twice about their wardrobe spring clean.
Considering the fast approaching deadline, digital platforms need to be ready to start collecting information in the New Year, but HMRC should also take steps to ensure that sellers are aware of the potential tax implications they may face and educate them appropriately.
In the busiest period of the tax year, HMRC plans to significantly reduce access to the self assessment helpline, prioritising only complex queries from Monday
Without prior warning, HMRC has confirmed that from 11 December until 31 January, it will redirect the majority of callers to the self assessment helpline to online services, telling taxpayers to find their own answers to queries about tax returns.
HMRC said that call centre advisers will focus on answering ‘priority queries’, described as ‘those that cannot be easily dealt with online’, as well as supporting the small minority of callers who require extra support or cannot use online services.
However, HMRC has not explained how these priority calls will be ranked and dealt with during this period.
The sudden announcement, with only four days’ notice, follows the abrupt three-month closure of HMRC helplines over the summer and the decision that helplines would be cut by 30% by the end of 2024 to allow staff to be reallocated to jobs in other parts of HMRC.
In the same period last year, HMRC received 1.2 million calls, more than one fifth of the total calls received in the 12-month period.
The service reduction will also affect accountants and tax advisers who will be told to use online services rather than relying on the agent dedicated line to resolve problems.
HMRC said: ‘Agents who call the ADL and whose queries are not specifically related to SA filing, payments or repayments, including agents with multiple client queries, will be redirected to alternative channels or asked to call back in February.
‘During SA peak, ADL will not be dealing with any PAYE-related calls, however we know that many queries can be resolved quickly and easily online. We encourage agents to consider using tools such as the ‘Income Record Viewer’ or the Where’s my reply tool before contacting us.’
The decision has been heavily criticised by accountants and tax advisers.
John Barnett, chair of CIOT’s technical policy and oversight committee, said: ‘Reducing access to HMRC’s self-assessment helpline is misguided.
‘While we understand HMRC’s desire to prioritise where it puts its limited resources, we are concerned that in practice many of their customers will be unable to navigate HMRC’s digital services, and will simply give up.
‘Previous trials to limit calls to complex queries, or diverting people to online services, have proven either troublesome or inconclusive.’
Glenn Collins, head of strategic and technical engagement at ACCA, described HMRC’s service as ‘unacceptably poor’.
‘The dramatically reduced service will be a worry for taxpayers and financial professionals alike,’ said Collins. ‘At a time when queries around self assessment go up significantly, this move by HMRC once again demonstrates it lacks the proper resources that it desperately needs.
‘ACCA has repeatedly called on the UK government to make significant improvements to the HMRC services, including the availability of HMRC agents to resolve basic issues which is currently not being achieved using the current HMRC online services.
‘We stand by our previous statement whereby we referred to HMRC as having unacceptably poor service. The difficulties experienced by accountants in working with HMRC cannot be overstated, and the reduced service offered by the helplines will surely only further exacerbate poor service levels and cause more frustrations at one of the busiest times of the year.’
The influential Treasury Committee was also critical of the decision, particularly the lack of notice about the service reduction.
Chair of the Treasury Committee, Harriett Baldwin, said: ‘Giving the public less than two working days’ notice of a significant reduction in service, while the deadline for self assessment returns looms, is yet another alarming development for an increasingly pressured government service. I have written to the CEO of HMRC in order to get much-needed answers about what this means for taxpayers.’
HMRC rejects any criticism of the downgrade to helplines and CEO Jim Harra told MPs on the Treasury Committee that the tax authority is fully committed to a move to a digital only approach.
It is convinced that many of the calls to the helpline are for trivial requests and said that ‘around two-thirds of calls to the SA helpline can be resolved far quicker through HMRC’s online services. To make all SA callers aware of the department’s extensive online services, recorded messages supported by SMS texts will be used’.
However, recent figures show that nearly one in five taxpayers were not satisfied with HMRC’s online services and it is difficult to resolve complex queries online. HMRC said that most calls are about basic questions which can easily be resolved online, such as updating personal information, chasing on the progress of a registration and checking a Unique Taxpayer Reference number.
Angela MacDonald, HMRC’s deputy chief executive, said: ’This is a busy time for customers who want to get their taxes sorted. We want to help customers resolve any issues in the quickest and easiest way, which is often through our online services.
‘The vast majority of self assessment customers file their returns digitally, so we’re helping them make the next step to resolving simpler queries through our online services.
‘Our expert advisers will be there to help people with urgent and more complicated queries as well as helping the small number who are unable to access our online services.’
Services on the Agent Dedicated Line will replicate the self assessment offer, with agents also being directed to our digital services for suitable queries.
HMRC is transitioning to a digital-first approach and said it was ‘continuing to improve and expand its online services, increasing their capabilities and ease of use so they become the default option for customers’.
Taxpayers who need support to complete their return for the 2022 to 2023 tax year ahead of the deadline on 31 January 2024 have been told to go to HMRC’s online support. More than 97% of self assessment taxpayers file their tax returns online.
Online fraud accounts for 40% of all crimes reported in England and Wales, with the majority of incidents happening online
Ofcom found that nine out of 10 adults in the UK think they have come across content connected with a scam and 25% admitted to losing money as a result. Many victims said it not only impacted their wallets but also their mental health.
As the online safety regulator, Ofcom has issued a revised Code of Practice to support the Online Safety Act that was passed last month.
The online safety rules ‘make it harder for fraudsters to operate online’ by making online service providers assess the risks of the user being harmed while using their platforms.
With the rate technology is advancing fraudsters are always adapting with the advancements, implementing social media and artificial intelligence (AI) to scam victims into sharing personal details, such as bank account details and addresses.
Under the new guidance, Ofcom has suggested measures for larger service providers that attract a greater level of risk, including the implementation of an automatic keyword search, employing an expert reporting system to contact regulators and law enforcement more easily, and installing a verification system for users.
They should also have to name an accountable person as a user, provide extensive training to content teams to recognise illegal activities, introduce a method of easy reporting for users and safety test recommended content.
The main attention is focused on protecting children against scams. Dame Melanie Dawes, Ofcom’s chief executive said: ‘Regulation is here, and we’re wasting no time in setting out how we expect tech firms to protect people from illegal harm online, while upholding freedom of expression. Children have told us about the dangers they face, and we’re determined to create a safer life online for young people in particular.’
Ofcom are planning on publishing a consultation on online fraud in January.
Michelle Donelan, science, innovation and technology secretary said: ‘Before the Bill became law, we worked with Ofcom to make sure they could act swiftly to tackle the most harmful illegal content first. By working with companies to set out how they can comply with these duties, the first of their kind anywhere in the world, the process of implementation starts today.’