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Staying informed about HMRC issues and tax matters is crucial for businesses and individuals alike. This article provides a helpful breakdown of recent developments that may impact you.
HMRC is failing on key performance metrics, including responsiveness, ease, and accuracy, according to the annual HMRC Charter report. The report, which reviewed performance from April 2023 to March 2024, found that ‘Being responsive’ scored the lowest, with a rating of just 2.4 out of 10.
Richard Wild, Head of Tax Technical at the Chartered Institute of Taxation (CIOT), said: “Significant time is lost every day for members, their clients, and HMRC themselves due to delays and inefficiencies in dealing with HMRC.”
He highlighted that the poor scores for responsiveness, ease, and accuracy hinder business operations, delay tax refunds, and mislead taxpayers with incorrect guidance.
HMRC has sent nudge letters to crypto investors suspected of not paying the correct tax on their gains. This move comes as many investors remain unclear about tax obligations regarding crypto assets.
Gary Ashford, Chair of the CIOT’s Crypto Assets Working Group, noted: “Many investors may be unaware that profits from crypto assets are subject to income tax or Capital Gains Tax (CGT), depending on how they’re held.”
Ashford advised that investors who receive a letter should take it seriously and review their crypto activities to ensure compliance.
Following the Bank of England’s base rate cut to 5.0% on 1 August, HMRC has reduced its late payment and repayment interest rates. From 20 August, the late payment interest rate was reduced from 7.75% to 7.5%, and the repayment interest rate was cut from 4.25% to 4.0%.
| Interest type | New Rate (from 20 August 2024) | Old Rate (before 20 August 2024) |
| Late payment Interest |
7.5% |
7.75% |
| Repayment Interest |
4.0% |
4.25% |
| Corporation Tax (underpaid quarterly) |
6.0% |
6.25% |
| Corporation Tax (overpaid quarterly) |
4.75% |
5.0% |
Scrap Fuel Duty Cut, Says RAC
The RAC is urging the government to scrap the 5p fuel duty cut in the upcoming Autumn Budget. The organisation claims UK drivers are not benefiting from the reduction as retailers have not passed on the savings.
Simon Williams, Head of Policy at the RAC, proposed a pay-per-mile tax system to ensure that EV drivers also contribute fairly while preventing fuel retailers from exploiting higher margins.
Freelancers want Chancellor Rachel Reeves to implement a simpler, fairer tax system in the upcoming Autumn Budget. A survey by the Association of Independent Professionals and the Self-Employed (IPSE) found that 80% of freelancers believe tax policies like IR35 are damaging their businesses.
Andy Chamberlain, IPSE’s Director of Policy, said: “The biggest barrier to growth for millions of freelancers has always been the tax system.”
Freelancers hope the Chancellor will simplify the system while balancing the government’s revenue-raising needs.
Record Number of Self-Employed Workers Aged 60 or Over
The number of self-employed people aged 60 or over has reached a record high of nearly one million, according to Rest Less. This group has grown by more than a third over the last decade.
Stuart Lewis, CEO of Rest Less, explained that many older workers find self-employment an attractive option, allowing flexibility and continued engagement in the workforce.
HMRC has updated the advisory fuel rates for company cars, effective from 1 September 2024. These rates apply when reimbursing employees for business travel in their company cars.
| Engine size | Petrol | Diesel | LPG |
| 1400cc or less |
13p/mile |
N/A |
11p/mile |
| 1401cc – 2000cc |
15p/mile |
14p/mile |
13p/mile |
| Over 2000cc |
24p/mile |
18p/mile |
21p/mile |
The advisory electricity rate for fully electric cars remains at 7p per mile.
HMRC’s Employer Bulletin for August 2024 includes essential updates for employers, covering topics like electronic payment deadlines, P11D submissions, and High Income Child Benefit Charge support.
Employers are encouraged to review this guidance to stay compliant with current tax obligations.
Keeping a close eye on developments in HMRC issues and tax matters empowers you to make informed decisions and navigate the tax landscape with confidence. Contact our experts for advice on any business-related matters.
For further details and professional advice, users should consult the detailed legislation or seek professional advice.
The Suffolk Chamber of Commerce is urging the government to reform the Research and Development (R&D) tax relief system to prevent negative impacts on small businesses. The Chamber’s report highlights issues with HMRC’s strict compliance regime and delays in processing claims.
“Every right-thinking person applauds the crackdown in fraudulent claims but HMRC appears to be going to extremes in its definition of the term.” – Steve Elsom, Chair of the Chamber’s R&D Tax Reliefs Task and Finish Group
An error by HMRC may cause some low-income self-employed workers to miss out on state pension entitlements due to rejected voluntary Class 2 National Insurance contributions. This issue affects contributions made for the 2022/23 tax year.
“The issue is unique to the year in question and our advice to those who might be affected is to first check to see whether they have received a refund from HMRC.” – Antonia Stokes, LITRG Technical Officer
UK taxpayers spent a total of 800 years on hold to HMRC in the 2022/23 fiscal year. The National Audit Office (NAO) attributes this to funding cuts, job reductions, and a push for online tax management. The average wait time to speak to an adviser was nearly 23 minutes.
“HMRC’s telephone and correspondence services have been below its target service levels for too long.” – Gareth Davies, Head of NAO
Nearly 300,000 self-assessment taxpayers filed their returns in the first week of the new tax year, with 70,000 filings on the first day. HMRC encourages early filing to avoid stress and aid in budgeting.
“Filing your self-assessment early means people can spend more time growing their business and doing the things they love rather than worrying about their tax return.” – Myrtle Lloyd, HMRC’s Director General for Customer Services
HMRC’s pilot for Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) is now operational. Accountants, agents, and individuals can participate in the pilot, which targets self-employed individuals and landlords with annual incomes over £50,000. Starting 6 April 2026, these groups must sign up for MTD for ITSA.
Participants must maintain digital records and submit quarterly updates to HMRC via compatible software. Currently, five software products are available for private beta testing: 1 2 3 Sheets Ltd, Intuit QuickBooks Online, Sage Accounting, SE Reports, and Self Assessment Direct.
“Choosing the right software is a critical decision. Software products do need to comply with HMRC’s minimum functional standards but these are quite minimal. This means there will be very significant differences between products.” – Caroline Miskin, Senior Technical Manager at ICAEW
HMRC has updated its guidance on travel expenses for remote workers. Travel from home to a permanent workplace is considered ordinary commuting and is not eligible for tax relief. However, travel costs from home to a temporary workplace may qualify for tax relief.
“Even though it may have been accepted that the employee’s home is a workplace it does not necessarily follow that they’ll be entitled to tax relief for the cost of travel between their home and a permanent workplace.” – HMRC
HMRC has introduced an online service for voluntary NICs payments, simplifying the process for customers to fill gaps in their National Insurance records and potentially increase their State Pension. The enhanced Check your State Pension service now includes an end-to-end digital solution.
“The State Pension is the foundation of income in retirement which is why we have introduced this new online tool to help simplify boosting it for those who are able to.” – Paul Maynard, Minister for Pensions
HMRC’s latest Employer Bulletin covers various topics, including PAYE Settlement Agreement payments, reporting expenses and benefits for the tax year ending 5 April 2024, mandating the payrolling of benefits in kind from April 2026, PAYE tax calculator, basis period reform, and claiming tax relief on work-related expenses.
For detailed information and professional advice, consult the relevant legislation or seek professional guidance.
New advisory fuel rates for company cars took effect from 1 June 2024. These rates are applicable to employees using a company car and include specific rates for petrol, diesel, LPG, and fully electric cars.
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