On Feb. 18, UK HMRC amended income and corporation taxes rules.
UK HMRC issued the Income and Corporation Taxes (Electronic Communications) (Amendment) Regulations 2025 (StIn 2025/172), which amend the Income and Corporation Taxes (Electronic Communications) Regulations 2003 (StIn 2003/282).
Purpose
This instrument amends the 2003 regulations in two respects; first, it amends them so that an insignificant technical error, in an electronic delivery to UK HMRC of information to which the 2003 regulations apply, does not completely invalidate the delivery.
The instrument ensures that the significance of any failure to adhere to the technical conditions is taken into account in assessing the validity of an electronic delivery.
Second, it amends the 2003 regulations so that they apply to certain communications for the purposes of Penalty Reform legislation in Finance Act 2021 (FA 2021 (UK)).
Ensures consent-based electronic communications are still issued to Income Tax Self Assessment (ITSA) taxpayers in connection with penalties once Penalty Reform starts.
Amendments
Amends regulation 1 of the 2003 regulations, omitting a definition which is no longer required as result of changes made by these regulations to reg. 3 of 2003 regulations.
Amends reg. 2(1) of the 2003 regulations to widen application of 2003 regulations to include notifications given by HMRC in connection with penalties under FA 2021 (UK) for failure to make returns etc, deliberately withholding information, failure to pay tax.
Amends reg. 3 of the 2003 regulations, replacing paras. (8), (9) with new paras (7A) to (7C), which make provision about the satisfaction of the conditions for the electronic delivery of information for the purposes of regulations 3(2) and 3(2A).
Amends regulation 5 of the 2003 regulations, which provides for consequences of the electronic delivery of certain information; this amendment gives effect to amendment of regulation 3 of the 2003 regulations by regulation 5 of these regulations.
Tax Information and Impact Note
On same date, UK HMRC issued a tax information and impact note (TIIN) on ensuring insignificant errors do not invalidate information sent electronically to UK HMRC and enabling taxpayers to still receive Income Tax Self Assessment penalties digitally.
Noted amendment of 2003 regulations to ensure certain information is part of wider assessment to avoid risk a single insignificant error could automatically invalidate that information, aligning conditions for electronic delivery of information for Income Tax returns, other information in regulation 2(1) as they do for company tax returns.
Measure will also legislate to extend scope of the regulations for penalty reform to ensure Income Tax Self Assessment taxpayers who volunteered to join Making Tax Digital pilot from 2024-25 tax year continue to receive penalty notices electronically.
Effectiveness
The new regulations come into force on Mar. 11, 2025.
