The CIOT has responded to HMRC’s consultation on draft regulations which set out the detail of additional data-gathering powers under FA 2024 s 36 which are expected to come into force from April 2025. Key observations include:
Requirement for employers to report the total number of worked hours paid for each employee: it is unclear why and for what purposes HMRC are collecting this information. Gathering this additional data and providing it to HMRC will place significant extra administrative burdens on some employers.
Owner-managers to report dividends from their own companies separately from other UK dividends: limiting this requirement to directors of close companies is a welcome clarification in the draft regulations, rather than bringing all limited company shareholders within scope. One concern, however, relates to the term ‘percentage of the person’s shareholding’ which is not defined and would benefit from further explanation, ideally in the regulations themselves. The CIOT also suggests that HMRC should produce guidance, with examples, to help taxpayers work out what percentage to put on their return.
Reporting the start and end dates of self-employment: HMRC should provide appropriate guidance in the tax return accompanying notes and on GOV.UK to help taxpayers identify the dates their business started and ended, as these may not always be clear cut. The rules will also need to cater for taxpayers who may not have needed to report the start date of a trade (e.g. if their income was under the £1,000 trading allowance in its early years).
The CIOT has responded to HMRC’s consultation on draft regulations which set out the detail of additional data-gathering powers under FA 2024 s 36 which are expected to come into force from April 2025. Key observations include:
Requirement for employers to report the total number of worked hours paid for each employee: it is unclear why and for what purposes HMRC are collecting this information. Gathering this additional data and providing it to HMRC will place significant extra administrative burdens on some employers.
Owner-managers to report dividends from their own companies separately from other UK dividends: limiting this requirement to directors of close companies is a welcome clarification in the draft regulations, rather than bringing all limited company shareholders within scope. One concern, however, relates to the term ‘percentage of the person’s shareholding’ which is not defined and would benefit from further explanation, ideally in the regulations themselves. The CIOT also suggests that HMRC should produce guidance, with examples, to help taxpayers work out what percentage to put on their return.
Reporting the start and end dates of self-employment: HMRC should provide appropriate guidance in the tax return accompanying notes and on GOV.UK to help taxpayers identify the dates their business started and ended, as these may not always be clear cut. The rules will also need to cater for taxpayers who may not have needed to report the start date of a trade (e.g. if their income was under the £1,000 trading allowance in its early years).
