The Income and Corporation Taxes (Electronic Communications) (Amendment) Regulations 2025
The Income and Corporation Taxes (Electronic Communications) (Amendment) Regulations 2025, effective March 11, 2025, amend the 2003 Regulations.
Key changes include removing an outdated definition, broadening the regulations to encompass penalties under the Finance Act 2021, and adding new provisions specifying conditions for valid electronic information delivery.
These amendments aim to improve efficiency, clarify procedures, and modernize tax communication processes.
Arguments For
Improved efficiency and modernization: The amendments streamline the process of delivering tax information electronically, reducing administrative burden for both taxpayers and HMRC. This leverages technology to improve efficiency and reduce costs.
Clarity and consistency: The regulations provide greater clarity on the conditions for valid electronic delivery of tax information, reducing ambiguity and potential disputes.
Compliance with modern communication methods: The updated regulations adapt to current technology and communication practices, ensuring that HMRC can effectively manage tax communications in a digital age. This ensures compliance with modern communication standards.
Enhanced penalty enforcement: The amendments expand the scope of the 2003 Regulations to include penalties under the Finance Act 2021, improving enforcement and compliance with tax obligations.
Arguments Against
Potential for increased complexity: The amendments introduce new paragraphs and sub-paragraphs, potentially increasing the complexity of understanding relevant tax regulations.
Unforeseen technical challenges: The reliance on electronic communication could expose HMRC and taxpayers to technical issues or unforeseen system failures, leading to delays or errors in processing.
Digital divide concerns: The reliance on electronic communication may disadvantage taxpayers without reliable technology access, limiting their ability to fulfil their tax obligations.
Overregulation: Critics might argue the additional complexity related to conditions for satisfactory electronic delivery is unnecessarily burdensome and represents overregulation.
The Commissioners of His Majesty's Revenue and Customs (HMRC) created these regulations using their authority under sections 132 of the Finance Act 1999 and 135 of the Finance Act 2002.
These Regulations may be cited as the Income and Corporation Taxes (Electronic Communications) (Amendment) Regulations 2025 and come into force on 11th March 2025.
These regulations are officially titled the Income and Corporation Taxes (Electronic Communications) (Amendment) Regulations 2025 and became effective on March 11, 2025.
The Income and Corporation Taxes (Electronic Communications) Regulations 20034 are amended as follows.
The following amendments modify the Income and Corporation Taxes (Electronic Communications) Regulations 2003.
In regulation 1 (citation, commencement and interpretation), omit paragraph (2B).
Paragraph (2B) is removed from Regulation 1 of the 2003 Regulations which covers citation, commencement, and interpretation.
In regulation 2 (scope of these Regulations), in paragraph (1)(a)—
(a) after paragraph (x), omit “or”;
(b) after paragraph (xi), for “; and” substitute “ , or
(xii) paragraph 6, 8 or 16 of Schedule 24, or paragraph 12 or 13 of Schedule 25, or paragraph 7, 9, 16 or 17 of Schedule 26, to the Finance Act 20215, except in relation to value added tax;”.
Regulation 2 of the 2003 Regulations, defining the scope, is amended.
In paragraph (1)(a), the word “or” after paragraph (x) is removed; after paragraph (xi), “; and” is replaced to include paragraphs 6, 8, or 16 of Schedule 24, paragraphs 12 or 13 of Schedule 25, or paragraphs 7, 9, 16, or 17 of Schedule 26, from the Finance Act 2021, but excluding value-added tax.
In regulation 3 (use of electronic communications)—
(a) after paragraph (7), insert—
(7A) Paragraph (7B) applies where—
(a) a person other than the Board uses electronic communications to deliver information to the Board, in a case falling within paragraph (2) or (2A) (“the relevant paragraph”), and
(b) one or more of the conditions mentioned in the relevant paragraph is not satisfied.
(7B) The conditions mentioned in the relevant paragraph are nevertheless to be treated as satisfied—
(a) if the Board is satisfied that the situation mentioned in paragraph (7A)(b) is not so significant as to undermine the purpose of the relevant paragraph, namely the delivery by approved electronic means of information of the type with which the relevant paragraph is concerned, or
(b) if the person had to make the delivery by a certain time and the Board is satisfied that the situation mentioned in paragraph (7A)(b) is the result of the person’s reasonable attempt to make the delivery by that time or within any extra time allowed for the delivery.
(7C) In paragraph (7B)(b), “extra time” allowed for a delivery means any time, beyond that normally allowed for the delivery, in which the person making the delivery is allowed to do so—
(a) by the Board or an officer of the Board, where they have power to allow such time, or
(b) otherwise, by or under any enactment, and includes any time at which the person is treated, for the purposes of any enactment and by reason of having an excuse (however described) for not having made the delivery, as not having failed to make the delivery or as not being liable to the consequences of such a failure;
(b) omit paragraphs (8) and (9).
Regulation 3 (use of electronic communications) is modified.
New paragraphs (7A), (7B), and (7C) are added, addressing situations where electronic communication conditions aren't fully met.
These new paragraphs clarify when the Board may consider the conditions to be satisfied despite technical issues or shortfalls.
Further, paragraphs (8) and (9) are removed.
In regulation 5 (effect of delivering information by means of electronic communications), in paragraph (1), for the words after “satisfied”, where it first appears, substitute “or, in the case of the conditions mentioned in regulation 3(2) or (2A), are treated under regulation 3(7B) as being satisfied.”.
Regulation 5, dealing with the consequences of electronic information delivery, is amended.
The wording after "satisfied" in paragraph (1) is changed to reflect the new provisions in regulation 3(7B), clarifying situations where conditions might be considered met despite technical issues.
Penny Ciniewicz
Jonathan Athow
Two of the Commissioners for His Majesty's Revenue and Customs
14th February 2025
These regulations were signed by Penny Ciniewicz and Jonathan Athow, two Commissioners of His Majesty's Revenue and Customs, on February 14, 2025.