Tax

Jonathan Ginnelly outlines the main stamp duty considerations for those acquiring commercial property in the Republic of Ireland. The stamp duty rate on non-residential property in the Republic of Ireland was increased to 6% in Finance Act 2017. Since this rate increase, stamp duty has become a real and significant cost when it comes to property acquisitions and, in some cases, it can be a deal-breaker. While stamp duty is a cost for the purchaser, the increased rate will inevitably have an impact on the purchase price paid to the vendor so as to manage the overall cost of the acquisition. Specific provision was also introduced to ensure that the increased rate also applies to certain property holding entities, such as companies, which might have been used to transfer property indirectly to avail of lower stamp duty rates. In addition to introducing the higher rate of stamp duty on non-residential property, Finance Act 2017 introduced a new provision to allow for a partial repayment (up to two thirds) of the stamp duty paid for land that is to be developed for residential purposes. This article will look at where the 6% rate can apply to property holding entities and provide a brief overview of the refund scheme for relevant residential developments. Property holding entities Where property is held through a company (including foreign companies), a partnership or an Irish Real Estate Fund (IREF), the higher rate of stamp duty (6%) can apply on the transfer of shares, interests or units of such entities. The higher rate should only apply in the following circumstances: Where the property was acquired by the entity with the sole or main objective of realising a gain on disposal; Where the property was, or is, being developed with the sole or main objective of realising a gain on disposal when developed; or Where the property was held as trading stock. Where one of the above conditions is met, the higher rate will apply on the transfer of shares, interests or units – but only where such a transfer results in a change of control, either directly or indirectly, over the immovable property. In addition, any contract or arrangement resulting in a change of ownership and control which might not ordinarily be ‘stampable’ will also be subject to the higher rate. Where minority interests are being transferred, such that control does not change, the higher rate should not apply. However, attempts to transfer several minority interests to a person or persons acting in concert will not escape the provisions. The provision should not apply to shares in companies that hold property where the property was not acquired for the purpose of realising a gain on disposal, for development purposes, or held as trading stock. For example, companies owning and operating a hotel or nursing home, or property rental companies (where the property was acquired for the purpose of generating rental income) should not be caught by the provision. Stamp duty refund scheme To encourage the development of residential property, a refund scheme was introduced in tandem with the increased rate to effectively reduce the 6% rate by two-thirds where the land acquired is to be developed for residential use. When a greenfield site or a site with existing non-residential property is purchased for development, this would not be considered “residential” property at the date of acquisition and, as such, is subject to the 6% rate. However, post-acquisition, a refund of up to two-thirds of the stamp duty paid may be available where the property is to be developed into residential units. Such developments can be carried out in either a single phase or in multiple phases. The refund (subject to a number of conditions) is available once construction operations on the residential development have been commenced pursuant to a commencement order issued by a relevant building authority. A phased development will have a number of commencement notices attaching to the various phases of construction. The key points to remember are: The first phase of construction operations must commence within 30 months of the date of execution of the instrument of transfer; The refund for a phased development can be claimed on a phased basis, or on completion of the entire residential development; On a multi-phase development, separate commencement notices will be required for each phase; There is a two-year time frame for completion. This two-year period runs separately for each phase; and If the residential development is not carried out in a phased manner, the full two-thirds refund can be claimed following commencement of construction operations – but the entire development must be completed within two years of the commencement notice. A refund claim for each phase can be made after the issuance of the relevant commencement notice and once construction operations have commenced. The refund will be for the proportionate amount of stamp duty relating to that phase. In a multi-phase development, there could be a number of phases commencing and finishing at various stages throughout the overall development. It is important to bear in mind that the 30-month time period in which the developer must commence construction runs from the date of execution of the instrument of transfer. If the development is carried out in phases, the legislation states that the construction operations in respect of the first phase must be commenced within 30 months of the date of the instrument of transfer. The last commencement notice and respective construction operations must commence before 31 December 2021 in order to fall within the scope of the relief. As such, the latest possible date for completion of qualifying construction works is 31 December 2023. Given the very specific timeframes involved, any development needs to be carefully managed to ensure all relevant dates are complied with. If any condition or timeframe is breached, a claw back of the refund can arise, leaving the taxpayer open to additional costs such as interest. Practical issues in claiming the refund Since the introduction of the refund scheme, certain practical difficulties have arisen in the refund application process. The stamp duty return may be filed by the solicitor dealing with the property conveyance, for example. However, when it comes to the refund scheme, taxpayers may opt to use the services of their tax advisor. In such cases, the advisor must liaise with Revenue to have the stamp duty records for that particular case transferred to the advisor’s ROS certificate. This can take some time to arrange, resulting in delays in the issuance of refunds. Where there are critical cash flow issues with a development and the taxpayer is relying on the stamp duty refund for financing purposes, early engagement with the tax advisors and Revenue is advisable. In conclusion, given the growth in property prices over the last number of years, the increased stamp duty cost now constitutes a significant part of the financing of acquisitions and developments. Accordingly, care should be taken to ensure that acquisitions and related development operations are structured so as to avail of the residential refund scheme where appropriate.   Jonathan Ginnelly is Tax Director at Grant Thornton Ireland.

The digital VAT quarterly deadline bites for the first time. On 7 August, the first quarterly return deadline for businesses mandated to meet the requirements of Making Tax Digital (MTD) for VAT will arrive for those businesses with a VAT return period that ended on 30 June 2019. Businesses must use MTD for submitting VAT returns if they are VAT-registered and have taxable turnover exceeding the VAT registration threshold (currently £85,000). The first return period beginning on or after 1 April 2019 must meet the requirements of MTD. Some more complex businesses have been given an extension until 1 October 2019. Not only does the business have to use functional compatible software to submit VAT returns, but the business must also now keep and preserve certain digital records. A year-long ‘soft landing’ period will apply during which HMRC will accept the use of ‘cut and paste’ as a digital link, but only if a digital link hasn’t been established between software programs. Now that the first returns are with HMRC, what will its response be? We’ve heard that HMRC will apply a light touch approach if a business “does their best to comply” with the core requirements; only in those instances will no filing or record-keeping penalties be issued. What will this light touch approach look like and for how long will it last? These questions are yet to be addressed. We would like to hear how your first MTD submission went. Contact leontia.doran@charteredaccountants.ie to tell us. Leontia Doran is UK Taxation Specialist at Chartered Accountants Ireland.

Paul Smith breaks down the three most significant changes in the latest edition of Revenue’s R&D tax credit scheme guidelines. In a recent Oireachtas debate, Deputy Mary Butler asked the Minister for Business, Enterprise and Innovation: “What is being done to ensure we reach the EU average spend? Will Ireland meet the 2020 target to spend 2.5% of GNP on research and development annually?” To which the Minister replied: “It is unlikely that many European countries will reach the target of 2.5%. Where Ireland stands and how well we are doing, we can only go on the European and global statistics we get. Under the heading, Excellent Science, a report from Science Foundation Ireland (SFI) noted that Ireland is tenth in the global scientific ranking. A few examples of our global rankings in different areas are: second in animal and dairy, immunology, and nanotechnology; third in material science; fourth in agricultural science; fifth in chemistry; and sixth in basic medical research… I have been all over the world and our 18 research centres are recognised as being par excellence throughout Europe and the world. We are doing exceptionally well.” A key part of Ireland’s national development strategy is to develop “a strong economy supported by Enterprise, Innovation and Skills”. The research and development (R&D) tax credit scheme forms part of the overall corporation tax offering aimed at fulfilling this strategy. The primary policy objective behind the tax credit is to increase business in Ireland, as R&D is considered an important factor for increased innovation and productivity. Reflecting these considerations, the Government’s Innovation 2020 Strategy aims to achieve the EU 2020 target of increasing overall (i.e. public and private) R&D expenditure in Ireland to 2.5% of GNP by 2020. The R&D tax credit scheme is administered by the Office of the Revenue Commissioners, which issued its latest guidelines on 6 March 2019. It is almost four years since the previous guidelines were published (April 2015) and in the interim, a number of significant events relating to the wider research, development and innovation (RD&I) landscape have happened: The Knowledge Development Box was introduced in 2015; The updated OECD Frascati Manual was issued in 2015; The Department of Finance reviewed the R&D tax credit scheme in 2016; An R&D Discussion Group was formed in 2017; and The Department of Business Enterprise and Innovation’s Disruptive Technologies Innovation Fund was introduced in 2018. It was expected that the latest guidelines would provide additional clarity on issues set out in previous ones, insight from the increased number of audits, and recommendations for continued best practice. There are 14 changes in all, most of which are relatively minor, and are therefore not discussed in this article. I will instead evaluate the more significant changes and briefly comment on the upcoming Department of Finance review of the R&D tax credit scheme. Change 1: Suggested file layout for supporting documentation An important consideration is that in defending a claim, the burden of proof is on the claimant to evidence their entitlement to tax credits. It should therefore come as little surprise that the principal focus of many audits is on supporting documentation. Although the legislation is silent on the nature of the documentation required to support an R&D tax credit claim, Revenue conducts audits using its own guidelines and provides a copy to the experts appointed to assist Revenue. The guidelines give indications of records that should be maintained to satisfy the science and accounting tests. The latest guidelines have, for the first time, introduced a “suggested” file layout for supporting documentation. This should be of benefit to existing claimants who have inadequate record-keeping and who are considering upgrading their systems and processes to be audit-ready. It may also be of benefit to potential claimants who are assessing what must be done to prepare a robust claim and, in time, defend it – the adage being that “your first step to claiming is also your first step to audit”. Revenue also benefits by potentially standardising the audit process and its inherent costs. At a recent audit this author attended, the Revenue inspector commented: “If we knew then what we know now, there may have been less need for the audit”. With Revenue’s increased adoption of e-auditing, a standardised R&D file structure could reduce the time and cost of on-site audits for both Revenue and claimants. Although the suggested file layout has advantages, it could be costly and administratively difficult for claimants to adopt. Furthermore, although the words “suggested” and “non-obligatory” are used, we can but assume that in time it could become a de facto requirement. This raises the question as to whether claimants would be disadvantaged in not using it or in having an incomplete file. In addition, claimants frequently receive an Aspect Query (Revenue’s R&D questionnaire, comprising 23–25 questions) into their claim in advance of a full audit. In answering the Aspect Query, a report setting out one’s entitlement to claim is typically furnished. That report is often laid out in the same format as the Aspect Query and although additional questions may be raised, the reports are not generally rejected by Revenue. Therefore, if reports in the Aspect Query format are broadly acceptable to Revenue, a suggestion is for Revenue to consider amending its Aspect Query rather than asking claimants to amend their processes. The R&D tax credit was introduced to defray the cost for claimants in the carrying on of R&D activities. There is no tax credit for the costs of record-keeping or file management. Change 2: Eligibility to claim for sub-contracted R&D activity The guidelines have reversed Revenue’s position that “outsourced activity must constitute qualifying R&D activity in its own right”. In the past, outsourced activities needed to be the R&D of the company carrying on the activities. With this change, they now must be the R&D of the claimant. This is constructive as it considers entitlement to tax credits from the claimant’s standpoint and reflects the reality of sub-contracting where the claimant lacks specific expertise and requires outside assistance to support its in-house R&D activity. The positive impact of this change will be the confidence it gives claimants to include sub-contracted activities that may previously have been omitted from claims, as the claimant could not determine whether the outsourced activities constituted R&D when performed by the contracted party. Change 3: Materials used in R&D activities, which may be subsequently sold R&D tax credit/relief schemes in other jurisdictions (such as Canada, Australia and the UK) have a legislative requirement to deduct from claims saleable products resulting from R&D activities. In Ireland, there is no such legislation, but the 2015 guidelines introduced this requirement without worked examples. The latest guidelines have updated the wording to read “where it is reasonable to consider that there will be a saleable product” and have provided three examples. Revenue is effectively placing the onus on the claimant to assess, based on a “reasonable to foresee” test, whether the materials were utilised “wholly and exclusively in the carrying on by the company of R&D activities”. This assessment seems to be at odds with the legislation, wherein other than a requirement to make a deduction for expenditure met by grant assistance, there is no reference to eligible expenditure having to be reduced for income from the sale of materials or saleable product derived from R&D. In the author’s opinion, whether materials have a post-R&D resale value should not detract from the fundamental and legislative reason for which their cost was incurred – namely, to carry on R&D activities. Guidelines do not make the law, and are but an aid to its interpretation. Department of Finance Review The Department of Finance has a duty of care over public expenditure and this year, in co-operation with the Office of the Revenue Commissioners, it will conduct its triennial review of whether R&D tax expenditure remains fit for purpose. The R&D tax scheme benefits not only claimants, but wider society also through development, employment, education and so on. However, the R&D headline cost figures do not reflect the full cost of the scheme to the Exchequer. It will be a full review (unlike 2016, which was economic only) and will cover four pillars – relevance, cost, impact and efficiency – to determine if the scheme remains valid. It will be conducted along two strands: A cost-benefit analysis (statistical in nature); and A tax policy unit analysis, involving a public consultation. It is encouraging that since the last review:  There has been no change in the R&D legislation; The OECD-compliant Knowledge Development Box scheme has come into operation; Ireland is ranked tenth in the 2018 Global Innovation Index; Ireland is ranked ninth in the 2018 European Innovation Scorecard; and Ireland is ranked fourth in the OECD Tax Database in terms of R&D tax incentives (tax and grants). Conclusion The expectations of the latest guidelines have largely been met, and hopefully the R&D Discussion Group will function as a collaborative forum to influence future updates.Yes, there is increased focus on supporting documentation, but broadly, the status quo remains. For now, you could say of the RD&I landscape in Ireland and the R&D tax credit guidelines respectively: “You rock. You rule!” The big three The three significant changes to Revenue’s R&D tax credit guidelines of which claimants should be aware are as follows: Change 1:  Suggested file layout for supporting documentation. The layout will benefit existing claimants who have inadequate record-keeping and who are considering upgrading their systems and processes to be audit-ready. A standardised R&D file structure could also reduce the time and costs of on-site audits for both Revenue and claimants. Change 2:  Eligibility to claim for sub-contracted R&D activity. The guidelines have reversed Revenue’s previous position that “outsourced activity must constitute qualifying R&D activity in its own right”. This is constructive as it considers entitlement to tax credits from the claimant’s standpoint and reflects the reality of sub-contracting, in that the claimant lacks specific expertise and requires outside assistance to support its in-house R&D activity. Change 3:  Requirement to deduct the cost of materials used in R&D and having resale value. The guidelines update the wording and provide three examples regarding saleable materials used in R&D activities. Revenue is effectively placing the onus on the claimant to assess, based on a “reasonable to foresee” test, whether the materials were utilised “wholly and exclusively in the carrying on by the company of R&D activities”. Paul Smith is Senior Tax Manager, Global Investment & Innovation Incentives (Gi3), at Deloitte.

Although 2019 has been a busy year to date, you can expect more activity and a bumper Finance Act in the second half of the year.   There seems to be no let-up in developments across the global tax world, with the first half of the year likely to be trumped by an even busier second half. It is not possible to cover everything, but let’s look at some of the key developments so far and what is coming down the tracks. Interest deductibility Earlier in the year, the Department of Finance completed its consultation phase in respect of changes to interest deductibility (and hybrid) rules. Following ATAD1 (EU Directive), Ireland is obliged to amend regulations governing interest deductibility, with interest capped at 30% of EBITDA subject to certain conditions. It looks increasingly likely that the new legislation will be introduced well before the initially proposed date of 2024, with its inclusion in October’s Finance Bill now a possibility (and effective 1 January 2020). Transfer pricing A consultation process also took place earlier in the year in respect of transfer pricing (TP). We can expect significant changes in this year’s Finance Bill to our existing TP regime. It is almost guaranteed that TP will be extended to non-trading transactions such as the provision of interest-free loans, which are currently outside the ambit of the TP legislation. What is not so clear-cut is whether TP will also be extended to small- and medium-sized enterprises (SMEs), which would place an extra administrative burden on smaller companies with potentially little additional tax revenues raised. It is possible that a compromise solution will be reached, with the new rules extending to SMEs but with more relaxed documentation conditions, as is the case in some other countries. For companies already within TP, the introduction of 2017 OECD TP guidelines into Irish legislation will see more onerous documentation requirements, with both a master file and local file required at the head office and local country subsidiary level respectively. Transfer pricing audits are also likely to be a more prominent feature of our tax landscape in the future. Digital taxes The good news is that the European Union (EU) has, for the moment, dropped its Digital Services Tax proposals – although several member states have unilaterally introduced their own such taxes (for example, the UK, France and Austria). However, the digitalisation challenge has instead been picked up by the OCED which, in February, launched a public consultation on ‘Addressing the Tax Challenges of the Digitalisation of the Economy’. This consultation seeks to build on previous reports on the area and agree on a consensus-based, long-term solution between OECD members by the end of 2020. The OECD’s proposals potentially go much wider than just digital companies, with the concept of “marketing intangibles” bringing many more companies within scope. While there is as yet no clear consensus amongst OECD members as to the best way forward, many countries favour the concept of linking value creation to the customers’ location. If ultimately consensus is reached that sees a portion of profits allocated to where consumers sit, this will undoubtedly dilute the benefit of our 12.5% corporate tax rate. We can expect further developments in this vital space over the coming months as negotiations progress. More recent consultations  In recent weeks, the Department of Finance has launched separate consultation phases in respect of Entrepreneur Relief, EIIS, research and development (R&D) tax credits and the KEEP (share option) scheme. While there is a different rationale for each consultation, the fact that they are taking place indicates that we may see changes in the future. The legislative provisions governing EIIS and KEEP in particular have proved problematic for taxpayers attempting to access the reliefs. The Department is also looking  closely at Entrepreneur Relief. While further changes to this relief may be made, it is optimistic to believe that the €1 million lifetime limit will be increased to €10 million, certainly in the immediate future. The R&D tax credit was the subject  of a previous review, which showed that the credit was working as intended with the additional jobs created by the credit trumping the cost to the Exchequer of funding the credit. The Department is now seeking to reaffirm this finding and determine whether the relief remains fit for purpose. Unwinding of “Double Irish” structures Grandfathering provisions for so-called Double Irish structures will come to an end on 31 December 2020. As a result, intangible assets currently held in tax havens have in recent times been “on-shored”, in many cases to Ireland. We expect this to continue for the remainder of the year and next year, with many groups keen to execute the migration before the law changes in the countries where the intangible assets currently sit. Due to the mechanics of the tax relief for intangible assets, any such acquisitions should see additional tax revenues flow to the Exchequer. Indeed, with intangible assets increasingly aligned with substance, additional payroll taxes may also accrue in due course. The US tax reform package has, in many cases, made it more expensive for groups to house their intangible assets outside the US. Notwithstanding this, we expect to see further significant migrations of intellectual property to Ireland. Minimum tax rate in Europe? In recent European Parliament election debates, the notion of a minimum corporation tax rate (18%) across the EU was raised. The abolition of the right to veto any tax changes has also been mooted. While both of these ideas are likely to get more air time for the remainder of the year, for the moment, we would assess the likelihood of either happening as remote. So in summary, a lot has happened already this year, and we can expect at least as much activity in the second half with a bumper Finance Act likely to wrap up the year. Paschal Comerford FCA is a Tax Director at Grant Thornton. Peter Vale FCA is Tax Partner at Grant Thornton.

It seems to be the season of public consultations on tax matters in the Department of Finance, with four launched in the month of May alone. This brings the total to 14 in the past two and a half years. While some areas under the current review such as transfer pricing and the R&D credit haven’t been scrutinised by way of consultation in recent years, others have been examined and re-examined and then examined again. One such example is the Employment and Investment Incentive (EII) scheme, which was introduced in Ireland in 2011. The relief, which offers a tax break of up to 40% in investments in certain corporate trades was explored in 2014, 2015 and 2018 – and now again in 2019. Over the years, many professional bodies, including this Institute, have consistently made the same points in its responses, seeking solutions to problems in schemes such as the EII – many of which have yet to be solved. In considering the most recent wave of consultations, it is apparent that in order to secure proper engagement with the consultative process, respondents need tangible evidence that their comments and suggestions are being listened to and acted upon. Departments cannot continue to seek and re-seek answers to the same questions without acting on some of the solutions proposed by respondents. Acknowledging that there have been some minor amendments to the EII scheme as a result of the last three reviews, these changes haven’t addressed some of the main concerns with the scheme. These include the restrictions that block access to the relief for many potential investors and the penalties if self-certification when claiming the relief is incorrect. Tax consultations in Ireland might help identify problems with the various reliefs, but there is little tangible evidence of any of the problems being solved – or, in some cases, even addressed – in response. One improvement to the process could be the introduction of a code of consultation principles, similar to the one that operates in the UK, which provides undertakings on time limits, responses and actions. Otherwise, what’s the point of having a public consultation?   Cróna Clohisey ACA is Manager, Tax & Public Policy, at Chartered Accountants Ireland.

Nothing can ruin a summer like getting caught with unreported taxes. Renee Dawson has provided a short guide to some common pitfalls in employment taxes. As we start a new tax year, it is an opportune time for employers to review employment taxes for the year ahead and identify any weaknesses in tax reporting processes. This article aims to highlight some common areas where employers can inadvertently fail to report employment taxes accurately. Staff entertainment All payments made to or on behalf of employees should be reviewed. Are employers funding staff entertainment, which falls outside the scope of HMRC exemption of £150 per employee for annual events? The supply of meals to staff when working late or the funding of team events can lead to an employment tax liability. Employers should consider applying for a PAYE Settlement Agreement with HMRC for the 2019/20 tax year to remove the need to declare on forms P11D.  Trivial benefits The provision of vouchers to employees at Christmas should be reviewed in conjunction with HMRC trivial benefits exemption. This exemption allows employers to provide non-cash gifts of up to £50 per employee tax-free as long as the gift is not an incentive or reward for service and is provided to all employees. Any vouchers provided to employees exceeding £50 or as an incentive or reward must be either returned on form P11D or included in a PSA. Termination payments Following the changes to the taxation of termination payments in April 2018, employers must comply with the new rules regarding Post-Employment Notice Pay (PENP) whenever an employee leaves without working a full notice period for whatever reason. The notice period must be confirmed using the PENP formula and pay as you earn (PAYE) and national insurance contributions (NIC) applied. This is due to change from 6 April 2020, when ex-gratia payments in excess of £30,000 will be subject to employer’s NICs. If the termination qualifies for £30,000 tax exemption under S 401 ITEPA 2003, any excess payment over this amount is subject to tax only and is still NIC free. This, however, is due to change from 6 April 2020, when payments in excess of £30,000 will be subject to employer’s NICs. Cash allowances Many employers are unaware of the full extent of the changes to salary sacrifice introduced in April 2017. Now called Optional Remuneration, the changes removed the tax advantages with the exception of pensions, childcare vouchers and cycle-to-work schemes. However, Optional Remuneration also introduced new rules where the employee has a choice of a benefit or a cash alternative. The most obvious example of this is a cash allowance in lieu of a company car.  Where there is a clear choice available, the employee who chooses the car will be taxed on the actual car benefit calculated according to the car list price and CO2 or the cash foregone, thus removing any taxable benefit in selecting a green CO2 friendly car.  Director current accounts Employers should aim to closely monitor any director current accounts to establish if there is a reporting requirement. Many directors regularly use their current account for cash withdrawals and clear the outstanding balance prior to the accounts year-end by payment of a dividend. However, many employers do not realise that, even though the account has been cleared at year-end, a significant overdraft exceeding £10,000 during the year could lead to a benefit in kind reporting obligation.  Temporary subsistence rules Care should be taken when employees are working away at a temporary location. Employers should monitor the 24-month rule for travel and subsistence costs under temporary workplace rules. If it is known from the outset that the assignment will exceed 24 months, the payments will be taxable from day one, or if it becomes apparent during the course of the secondment tax should be applied from that date.  Many employers will choose to place employees in rental accommodation rather than a hotel. This can cause issues for tax, especially if the amounts involved exceed £2,500 per annum.  HMRC requires the employee to complete a tax return to disclose the benefit and then make a contra-business expense claim to negate the benefit.  Off-payroll working Any gross payments made to individuals working off-payroll should be treated with caution. Payments to an individual who claims to be self-employed should be scrutinised to determine the status based on the tests such as control, integration, substitution and financial risk, and you should ensure that a contract of service does not apply to make the arrangement one of employment.  However, if the individual is operating through the intermediary of a personal service company (PSC) and provides services to an engager in the private sector, the risk lies mainly with the PSC rather than the engager, at present. From April 2017, for PSCs operating in the public sector, the burden of responsibility rests clearly with the engager making the payment to the PSC. The roll-out of this legislation to businesses in the private sector will take place on 6 April 2020. It is worth pointing out that the PSC will be taxed as an employee but will not benefit from any employment rights.  In advance of the new rules to come into effect on 6 April 2020, employers should review all engagements with PSCs. HMRC have introduced a new interactive tool called CEST (check employment status tool) to assist with this review. All payments made outside payroll should be reviewed on an individual case by case basis. This presents a risk for employers and potentially increased costs with the employer’s NICs.  The new tax year brings a fresh opportunity to review all employment tax reporting obligations and the systems in place to ensure you are fully compliant with HMRC. Happy new tax year!   Renee Dawson is Tax Senior Manager at BDO Northern Ireland.