Highlights from the broader tax news for the week ending 27 September 2023, including: student loan deductions and payrolled benefits; enhancements to HMRC’s use of open banking; and changes to probate phone lines.
Issue with student loan deductions and payrolled benefits in kind
HMRC has identified that a small number of student loan borrowers have been overcharged student loan repayments on their self assessment tax return. This has happened because for self assessment taxpayers, HMRC calculates student loan repayments using the total PAYE income declared on the return. However, student loan deductions are not due on payrolled benefits that are not subject to class 1 NIC. Details of what HMRC is doing to correct this can be found in Agent Update 112. Details of the steps to take when completing the next self assessment return to avoid this issue can be found in the guidance Tell HMRC about a student or postgraduate loan in your tax return.
Paying HMRC using open banking – enhancement
HMRC would like to promote the use of its ‘Pay by Bank Account’ service which is available from online filing services. The service makes use of opening banking technology.
Previously the only option was to make immediate payment. This made it unattractive if the return was filed in advance of the due date for payment. HMRC is now enhancing the service to make it possible to schedule payment for a future date (which is not beyond the due date).
The feature is live for the following regimes:
- Employers’ PAYE;
- PAYE settlement agreement;
- PAYE late payment or filing penalty; and
- Class 1A NIC.
The service will be available soon for:
- Capital gains tax;
- Self assessment;
- Simple assessment;
- Corporation tax;
- VAT one stop shop;
- Soft drinks industry levy; and
- Plastic packaging tax.
Changes to probate phone lines
From Monday 2 October, HMRC will no longer offer a dedicated probate phone line. If a person has a probate query, they should contact the HM Courts and Tribunals Service probate phone line. If a person has an inheritance tax query, they should contact HMRC.