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Tax

This week read about Revenue’s upcoming RCT bulk rate review. In the UK, HMRC are ramping up Brexit preparations and guidance. In International news, the European Commission has reported that the EU VAT Gap has decreased.   Ireland Revenue will be carrying out an RCT bulk rate review starting 14 September. Read more Revenue has published a new Tax and Duty Manual covering the changes to the 2019 CT1 return. Read more UK Read the latest update on Making Tax Digital Our UK Brexit update features online webinars, grants to provide support for customs training and an online tool   International The European Commission has reported a decrease in the EU VAT Gap, as member countries lost almost €137 billion in VAT revenues in 2017.

Sep 13, 2019
Tax

This week, read about the latest Brexit developments as the UK parliament is suspended for five weeks. Also on the Brexit front, read about the leaked UK no-deal planning document, and the Irish Cabinet’s decision to prepare Budget 2020 on the assumption of a no-deal Brexit.   UK Parliament suspended and law preventing no-deal Brexit is passed Earlier this week, the UK House of Commons has successfully passed emergency laws preventing the UK from leaving the EU without a deal. Also, the UK Parliament is now suspended for five weeks and will reconvene with a queen’s speech on 14 October. Meanwhile, to continue bilateral discussions on Brexit, Taoiseach Leo Varadkar met with UK Prime Minister Boris Johnson in Dublin earlier this week. While discussions are at an early stage, they have both voiced their shared commitment to securing a suitable Brexit deal between the UK and the EU. They also discussed the restoration of power-sharing in Northern Ireland institutions in a joint statement following the meeting. Additionally, the EU has subsequently confirmed that they are willing to revisit a deal with the possibility of a Northern Ireland-only backstop. Operation Yellowhammer: Document outlines worst case no-deal Brexit scenarios The previously leaked UK no-deal Brexit planning document, Operation Yellowhammer, was made public yesterday.  The report is available to read online, and outlines ten possible no-deal Brexit scenarios. The scenarios range from, warnings of potential unrest in Northern Ireland, road blockades, job losses and disruption to the agri-food sector, to reduced flow of cross-Channel goods and the potential for disruption to electricity supply. Budget 2020 based on no-deal Brexit assumption, says Minister Donohoe As preparing for a no-deal Brexit in Ireland was made a top priority by Cabinet last week, Finance Minister Paschal Donohoe has reassured the public that Cabinet has agreed to base the upcoming Budget 2020 on a no-deal Brexit assumption. Taoiseach marks May 2020 as potential date for next general election Speaking at a Fine Gael party meeting in Cork yesterday, Taoiseach Leo Varadkar has indicated May 2020 as his preferred date for the next Irish general election. Mr Varadkar said that date should be suitable as either a Brexit deal would be in place by then, or the Government would have "guided the country through the worst" of a no-deal Brexit. Phil Hogan appointed as EU’s next Trade Commissioner Phil Hogan has been confirmed as the EU’s next Trade Commissioner. He will also be taking the lead as chief trade negotiator on the EU’s post-Brexit trade deal with the UK, as well as Mercosur and the EU’s trading relations with India, the US and China. Brexit preparedness resources Brexit Customs Level 1 and 2 – CPD course Chartered Accountants Ireland, in association with the Irish Exporters Association, has launched a brand new continuous professional development (CPD) course - Brexit Customs Level 1 and 2 in both the Republic of Ireland and Northern Ireland. This course provides participants with insights into how to manage their dealings with EU/International customs efficiently and explores areas such as goods classification, origin, valuation and transit.  Brexit Customs Level 1 and 2 will run in the morning and evening respectively, and participants can book either the morning, or afternoon session, or both. Courses are being run in Belfast, Derry, Dublin and Newry. This course is suitable for accountants, and other business professionals, who have limited knowledge of customs. Attendees can be working in practice, finance, procurement, supply chain, operations or freight forwarding. No previous experience or knowledge of customs is required. Interested parties can visit the CPD programmes page of our website to learn more and register for the course.   Clear Customs – Essential customs training The Irish government have launched the Clear Customs initiative to help businesses and intermediaries develop the capacity to complete customs administration post-Brexit. As a part of the initiative led by Skillnet, businesses have been offered two main supports: An essential customs training programme delivered nationwide over six weeks providing skills necessary to make customs declarations Customs Financial Support payment to assist with the costs of hiring or assigning new staff to customs roles. The payment can be up to €6,000 per employee that completes the training programme – up to a maximum of 10 employees. Expressions of interest for the customs training programme and Customs Financial Support payment must be made via the Skillnet Ireland website before 20 September 2019. Readers should note to meet the following eligibility criteria that businesses will need: an EORI number from Revenue. Read our guidance on how to apply for an EORI number; a CRO number; to be registered with the Company Registration Office and incorporated in the Republic of Ireland at the time of application; to provide freight, haulage, logistics services to, from or through the UK, or; Are providing customs intermediary services; and are currently directly engaged in the import/ export, or are facilitating the import/export, of goods to, from or through the UK and which will require new or increased customs clearance capacity. HMRC – Customs funding The UK government have announced additional funding to support businesses with the costs of making customs declarations. Businesses based in, or with a branch in, the UK can apply for funding ahead of the UK leaving the EU. Grants can be used to support: training costs for businesses who complete customs declarations, or who intend to in the future funding for IT improvement, which is available to small and medium sized employers who are currently involved in trade as an intermediary Applications can be made online, with the grant being offered within 30 days of applying.    Customs workshops Local Enterprise Offices are running customs workshops throughout the country from August to October to provide businesses with a better understanding of the potential impacts and customs procedures to be adopted when trading with a country outside of the EU.  These courses are open to all businesses. You can read the course outline here. To see locations, dates and how to book, go to this link. Irish Government Brexit Supports The Department of Business, Enterprise and Innovation have released several Brexit preparedness supports, including the Brexit preparedness checklist, the Brexit Loan Scheme and the Getting Business Brexit Ready guide. For the full range of supports for businesses, visit the Department’s website. Read all our updates in our Brexit web centre and our page dedicated to no-deal Brexit planning.

Sep 13, 2019
Tax

Revenue will carry out a bulk rate review (“BRR”) of all subcontractors in the eRCT system this coming weekend.  In advance of 14 September, subcontractors and agents should address any compliance issues which would cause their deduction rate to increase in this review.  The last such review by Revenue was in April.  Many members told us after the April review that rates were increased, mainly due to a number of outstanding VAT RTDs and some subcontractors had tax withheld at the 35 percent rate on invoices that had been issued. In a note from Revenue they tell us that: “Subcontractors or their agents should ensure that they are fully compliant, throughout the previous 3 years, with their pay and file obligations. Please note that ‘a self-review’ may be carried out in ROS which will identify any compliance issues which need addressing before the BRR is run.   Further information on the rate determination can be found in the Tax and Duty Manual Part 18-02-05.  This includes an Appendix on the RCT self-review screens. After the BRR is run (on 14/9/19), principal contractors paying subcontractors on rates of 20% or 35% will be obliged to make deductions on any invoice issued.” You are reminded that the VAT RTD is an annual return and failure to file any outstanding RTDs may result in a higher RCT rate.  We reported on the Revenue RCT reminders and the VAT RTD in February and also on the April BRR.   

Sep 09, 2019
Tax

Revenue tell us that they will be writing to taxpayers who were sent a paper Form 11 to advise them that if the paper return is filed before end-September Revenue will calculate the self-assessment.  Revenue has provided us with a sample of the letter text.  The sample text as provided by Revenue is as follows: 2018 Income Tax Return Dear [First Name] According to our records, as of the end of August you have not filed your 2018 Income Tax return. You do not need to do anything if you have already either: submitted your 2018 return in the last few weeks, or made arrangements to have your return completed and filed on your behalf. This letter is to remind you that when completing your tax return, you must calculate your own tax, USC and PRSI liability and make your self-assessment for the year 2018. The benefit of early filing If you complete and submit your tax return on or before 30 September 2019, you will not have to calculate your liability nor complete the self-assessment section. Revenue will make your self-assessment for you. Early filing of your 2018 tax return does not mean you pay any liability earlier. You will still have until 31 October 2019 to pay any balance of tax due for 2018 and your preliminary tax for 2019. The benefit of filing through ROS If you file your tax return through the Revenue Online Service (ROS): the deadline to file your return and pay and tax due is extended to 12 November 2019, and your income tax, USC and PRSI liability will be calculated for you. You can register for ROS via www.revenue.ie. If you are considering filing online, you should register for ROS as soon as possible. More information on your obligations can be found on www.revenue.ie, please select Self-assessment and self-employment / Filing your tax return. Yours faithfully District Manager

Sep 09, 2019
Tax

Revenue has published a new Tax and Duty Manual covering the changes to the 2019 CT1 return.  One of the main changes is the ability to change the company’s accounting period on ROS and this is detailed in the updated manual.  Company details, trading results, rental income, capital gains, film relief, and property based incentives have all been updated in the 2019 return.   This manual may be helpful to you when preparing and filing the 2019 CT1.  The CT1 for accounting periods ending in 2019 is available for filing through ROS online and ROS offline, since 23 March 2019.  Revenue’s Tax and Duty Manual contains information on the CT1 with screen shots of the relevant ROS screens. The manual is published on the Revenue website. 

Sep 09, 2019
Tax

The Department of Finance published a Feedback Statement on Ireland’s Transfer Pricing Rules.  This statement is in response to submissions made under the public consultation earlier this year.  The Feedback Statement sets out proposed legislative changes being considered for Finance Bill 2019.  The new provisions could apply from 1 January 2020.  According to the Feedback Statement, the main proposed legislative changes are: Incorporate the 2017 OECD Transfer Pricing Guidelines in Irish legislation. Section 835D of the Taxes Consolidation Act 1997, provides that the basic rules on transfer pricing are to be construed in accordance with OECD guidelines. Bring arrangements, the terms of which were agreed before 1 July 2010, within the scope of transfer pricing rules for chargeable periods commencing from 1 January 2020.  Introduce enhanced transfer pricing documentation requirements from 1 January 2020. Bring SMEs within the transfer pricing rules where the total consideration for the related-party cross-border transaction is more than €1 million or the value of assets is more than €25 million. Transfer pricing documentation requirements for SMEs will be tailored depending on their size, with an exemption from transfer pricing documentation requirements for small enterprises and reduced and simplified transfer pricing documentation requirements for medium enterprises.  Commencement of this provision will be subject to Ministerial Order. Extend transfer pricing rules to non-trading transactions. Certain domestic transactions will continue to be outside the scope of the rules. Extend transfer pricing rules only to capital transactions above a certain material threshold, for example €25 million. The application of transfer pricing principles in connection with the attribution of profits to branches will be considered at a later stage.   Chartered Accountants Ireland, under the auspices of CCAB-I, responded to the consultation on Ireland’s Transfer Pricing Rules in April.  You can read this submission on our website.  Read the Department of Finance Feedback Statement.  

Sep 09, 2019
Tax

Revenue’s Tax and Duty Manual - Share Schemes Chapter 9, which deals with the Key Employee Engagement Programme (KEEP), has been updated to reflect the changes to the definition of a “qualifying share option”.  The changes to the definition at section 128F 1(d) of the Taxes Consolidation Act 1997 were introduced by section 11 Finance Act 2018 but were subject to Commencement Order as EU approval was required.  The Commencement Order (S.I. 424/2019) is signed and gives effect to the changes from 1 January 2019. You can read the changes to section 128F 1(d) highlighted on TaxSource.   

Sep 09, 2019
Tax

Revenue guidance, Company Incorporation - Economic Activity, outlines the circumstances when a Revenue Statement under section 140 of the Companies Act 2014 will be considered.  This guidance is updated to clarify that Revenue will not, in general, issue a Statement where a company has an EU or EEA resident director.

Sep 09, 2019
Tax

In his Sunday Business Post column Dr Brian Keegan, Director Advocacy and Voice, writes on the HMRC’s automatic issuing of EORI numbers to UK businesses and the UK government’s plans for a no-deal Brexit. In the Irish Examiner Brian gives his opinion on the EU VAT Gap report.

Sep 09, 2019
Tax

The seven module Diploma in Taxation started on Saturday 7 September with participants attending class in Pearse Street for a lecture and collaborative, facilitated case studies. There is still capacity in this group so if you would like to sign up there is time to catch up in time for module two. The programme is also available by fully online learning meaning you can access content from wherever you are in the world. There is still time – book your place today.

Sep 09, 2019
Tax UK

Last week HMRC was awarded a total settlement of £4.1 billion from HM Treasury for 2020/21, including £382 million for work on Brexit. Work on Brexit has ramped up recently with numerous important updates now being published on a daily basis. We recommend you sign up for updates if you haven’t already done so and keep up to date by reading our latest Brexit bulletin.   The UK Government has also announced that £16 million will go towards support for businesses and fund the training of thousands of customs experts for trading post-Brexit. The Irish Government has already launched the Clear Customs initiative to help businesses and intermediaries develop the capacity to complete customs administration post-Brexit.  A get ready for Brexit tool has also been published which is intended to assist businesses and individuals to navigate to the content that is relevant to them to prepare for leaving the EU on 31 October.  The UK Government’s latest message is that the UK will be leaving the EU on 31 October whatever the circumstances. When the UK leaves the EU there will be immediate changes to the way UK businesses trade with the EU that may impact your business. HMRC are holding live “Getting Ready for Brexit” webinars on various dates and times starting tomorrow, Tuesday 10 September. Choose a date and time that suits you to take part.   This live webinar provides an overview for UK businesses involved in the movement of goods between the EU and the UK. Find out what you need to know to keep importing and exporting, including:  why it’s important to apply for an Economic Operator Registration and Identification number (EORI); what Transitional Simplified Procedures are; how to prepare to make customs declarations; what Entry Summary Declarations are; and how to pay the correct Customs Duty and VAT.  You’ll have the opportunity to ask questions during the webinar using the on-screen text box. HMRC will also provide useful links to regularly updated information at the end of the webinar. HMRC has also published updated Regulations and legislation guidance necessary to ensure the UK’s Customs, VAT and Excise regimes will function in a no-deal Brexit.

Sep 09, 2019
Tax UK

HMRC recently sent the below update on Making Tax Digital (“MTD”) which sets out its approach to enforcing compliance in the first year of MTD. Update from HMRC “The government has confirmed a light touch approach to penalties in the first year of implementation of MTD VAT. Where businesses are doing their best to comply, no filing or record keeping penalties will be issued.  The department’s main priority is to support taxpayers to transition to MTD smoothly, so it will not penalise businesses, instead we will send them a letter encouraging them to join without further delay [where businesses failed to sign up in time for their first MTD filing deadline].  We are trialling two different approaches based on compliance and behavioral insight. For each approach, there are two versions of the letter – one includes a disclaimer for businesses where the information we hold suggests their taxable turnover may be below the VAT registration threshold.    Following feedback on the letter issued to monthly filers, we have amended the letter to make the disclaimer more prominent – it is now at the outset.  Sanctions will remain possible in cases of deliberate non-compliance, and in order to safeguard VAT revenue.”  

Sep 09, 2019