Revenue has published updated guidance on the Film Corporation Tax Credit with the introduction of a new section on claiming the enhanced tax credit for lower budget films, or as it is also known – the ‘Scéal uplift’. The guidance addresses the EU State Aid transparency requirements as well as removing obsolete details. The tax credit was introduced by Finance Act 2024 and applies to lower budget qualifying film productions certified on or after 20 May 2025. It is available, subject to certification by the Minister for Culture, Communications and Sport, for live action or animated feature films, with qualifying expenditure below €20 million. To qualify, certain key creative roles must also be carried out by Irish or EEA nationals or ordinary residents.

Revenue has updated its guidance for non-resident students who are exercising a short-term employment in the State to replace information previously included in paragraph 3 with a link to the guidance on PAYE exclusion orders.

In part one of this series looking at the key changes to UK tax legislation which took effect due to the commencement of either the new Financial Year 2026 from 1 April 2026 or the new tax year 2026/27 which began yesterday, April 6, we focused on Making Tax Digital (MTD) for Income Tax and measures affecting tax agents. In part two we take a look at key changes to the capital taxes, income tax, corporation tax, and capital allowances. Inheritance Tax (IHT) Reliefs From 6 April 2026, 100 percent IHT relief for both Agricultural Property Relief and Business Property Relief are capped at a combined £2.5 million allowance per individual. Qualifying agricultural and business assets that exceed this threshold now receive 50 percent relief, resulting in a potential effective IHT rate of 20 percent (40 percent IHT rate x 50 percent unrelieved). However, each individual’s £2.5million allowance, or any amount of this which is unused, is transferable between spouses and civil partners, which essentially then can provide 100 percent relief on qualifying assets worth up to £5 million. This significant policy change was announced in the 2024 Autumn Budget and has been the subject of much criticism. Since that announcement, Chartered Accountants Ireland has consistently lobbied the UK government for a range of mitigations to the original policy which culminated when our UK Tax Manager, Leontia Doran, delivered oral evidence last October to the House of Lords Finance Bill Sub-Committee inquiry into these changes which you can view on parliamentlive.tv (4.55pm onwards). Business Asset Disposal Relief (BADR) and Investors’ Relief (IR)  As a result of the increased rates of CGT which took effect from Autumn Budget Day on 30 October 2024, BADR and IR, which previously provided a reduced 10 percent rate of CGT on qualifying business disposals, increased from 10 percent to 14 percent from 6 April 2025. Both have now further increased to 18 percent from 6 April 2026. The lifetime limit (LL) for each remains unchanged at £1 million. As a result of the increase to each of these, their benefit has now been reduced to a saving of 6 percent compared to the maximum CGT rate of 24 percent, or £60,000 if the individual’s full LL is available on the relevant transaction. Dividend income tax rates To more closely align the rates of income tax on passive income with earned income, the dividend income tax rates increased for basic and higher rate taxpayers by 2 percent from 6 April 2026. The basic rate rose from 8.75 percent to 10.75 percent, whilst the higher rate increased from 33.75 percent to 35.75 percent. There is no change to the additional rate, which remains at 39.35 percent, nor has there been any change to the £500 dividend allowance. Although dividends generally continue to be more tax efficient as a form of cash extraction from a company compared to employment income, this increase reduces the tax benefit and therefore necessitates a fresh review of company profit extraction strategies. Corporation Tax (CT) The flat rate CT late filing penalties doubled from 1 April 2026 (the associated tax geared penalties for late filing are unchanged). These are now as follows for late CT returns: Up to three months late: £200 penalty increased to £1,000 for the third consecutive late return, and More than three months late: £400 penalty increased to £2,000 for the third consecutive late return. Although the rates of CT are unchanged in the Financial Year 2026, the increased higher rate of dividend tax has resulted in an associated increase in the rate of Section 455 tax which is payable by companies on loans to participators/associates of participators. This has therefore now increased to 35.75 percent. Other changes to CT, which took effect for accounting periods beginning on or after 1 January 2026, include:  The exemption of UK-to-UK transactions from transfer pricing if there is no risk of tax loss,  Changes to the definition of ‘permanent establishment’ to align with that of the OECD’s Model Tax Convention, and The repeal of the diverted profits tax which has now been replaced with a new charging provision for unassessed transfer pricing profits.  Capital allowances From 1 April 2026 for companies and 6 April 2026 for unincorporated businesses, the main rate of writing down allowances (WDAs) was reduced from 18 percent to 14 percent. As a result, a hybrid rate applies for accounting periods straddling 1/6 April 2026. This reduction has been introduced to finance the new 40 percent First Year Allowance (FYA) for main rate expenditure incurred on or after 1 January 2026. HMRC has updated its guidance on issues that may affect how to file a company tax return which now includes the new 40 percent FYA. According to HMRC, it will update its Corporation Tax online service in April 2027 for the new FYA. To claim this new allowance before then, the following boxes on form CT600 should be completed: boxes 725 or 750 for claim amounts, and box 760 for qualifying expenditure.

Revenue has published updated guidance in paragraph 3.1 on the EU Mandatory Disclosure of reportable cross border arrangements to reflect amendments  arising from the transposition of Council Directive (EU) 2023/2226 (DAC8).  Paragraph 3.1 sets out the specified information to be provided to Revenue for each reportable cross‑border arrangement. The update confirms that an abstract summary of the business environment is no longer required in respect of reportable cross-border arrangements. Instead, a description of the relevant arrangements, along with any additional information that would assist a competent authority in assessing potential tax risk should be provided.

Revenue has published updated guidance on the Outbound Payments Defensive Measures. The new guidance provides additional detail and clarification on the application of the measures, including information on the ‘association’ test. The updated sections of the guidance are as follows: A new section 3.4.2 has been included concerning the application of the association test for Irish partnerships, New examples relating to associated entities and Irish partnerships are included in sections 3.4.3 and 3.4.4, Section 3.4.5 now includes updates concerning association via individual(s), and new examples are also included, Section 3.8 includes updated guidance and examples to confirm that Net CFC Tested Income tax (NCTI) under US tax law is regarded as similar to the controlled foreign company charge for the purposes of the outbound payment defensive measures, The text relating to the examples in section 5.1.2 and in section 5.1.4 have been updated, and A new section 5.1.5 has been included with examples concerning Investment Limited Partnerships. Several other minor amendments have been reflected throughout the guidance.

Revenue has published updated capital acquisitions tax (CAT) guidance on Business Relief to reflect the Finance Act 2025 amendments to sections 100 and 101 of the Capital Acquisitions Tax Consolidation Act 2003. New examples have been included in the guidance to reflect the relevant amendments.

Readers may recall that when the old Advance Corporation Tax (ACT) regime was abolished in 1999, this necessitated regulations to ensure that any unrelieved surplus ACT balances carried forward by companies could still be accessed via the ‘shadow ACT’ rules. Regulations have now been laid before Parliament to amend these rules. The former ‘shadow ACT’ rules involved a notional calculation of ACT paid on distributions made after 5 April 1999. The Government says that these rules have served their purpose. However, in recognition that some companies still have significant balances of unrelieved surplus ACT, the current regulations, which cancel all remaining shadow ACT balances, also allow companies to speed up utilisation of their remaining unrelieved surplus ACT balances.

Revenue has updated its guidance on tax relief available for qualifying health expenses to provide further clarifications, including information relating to the Common Conditions Service. The examples in the guidance have also been refreshed to reflect the increased standard rate bands and tax credits for 2025. The relevant updated sections are as follows: Paragraphs 2.2 and 3.2 have been updated to advise that, as a Revenue Administrative practice, tax relief will be available on charges incurred on the Common Conditions Service (CCS) pending the introduction of legislation formalising the position. Further details regarding this can be found in our earlier newsletter item. Clarification is provided in paragraphs 3.4 and 3.7 that an entitlement to tax relief on running costs associated which medical equipment or travel and accommodation costs, necessarily incurred in the provision of healthcare may apply as determined on the full facts and circumstances of the individual’s case. In this regard tax relief for such expenditure is not limited to those health conditions for which a flat rate amount is available as set out in paragraph 3.7.3. Paragraph 7 has been updated to outline how claims may be verified to ensure expenses incurred are in relation to 'healthcare' within the meaning of section 469 TCA 1997. Paragraphs 9.6, 11 and appendix 1 have also been updated in this regard. Paragraphs 9.3 and 9.4 have been updated to clarify that an individual may be eligible to claim tax relief on the maintenance costs referrable to the keeping and use of a trained dog. Although a flat rate is available in respect of such expenditure, tax relief is not limited to the flat rate referred to in the respective paragraphs. Paragraph 9.5 has been updated to provide clarity on tax relief available in respect of in vitro fertilisation (IVF) and other forms of assisted human reproduction (AHR).   A decision tree has been added to aid taxpayers in determining if the medical expenses an individual incurs qualify for tax relief under section 469 TCA 1997.

In this week’s detailed miscellaneous updates which you can read more about below, HMRC has advised us that from April 2026 employment expenses and gift aid will be removed from the tax codes of some taxpayers if HMRC’s data shows that they are unlikely to be accurate or relevant. In other news this week: In a recent Agent Update, HMRC has published tips for making a valid claim for overpayment relief, The Tax Law Review Committee of the Institute of Fiscal Studies has published Tax and disability in the UK: review of trusts and other savings options which examines the existing disability trust regime in the UK for putting aside savings in respect of eligible disabled people, The latest schedule of HMRC Talking Points live and recorded webinars for tax agents are available for booking. Spaces are limited, so take a look now and save your place, and finally, Check HMRC’s online services availability page for details of planned downtime and the online services affected. Removal of employment expenses and gift aid from tax codes From April 2026, HMRC has begun to remove employment expenses and gift aid from the tax codes of some taxpayers if HMRC data indicates that including these in the taxpayer’s tax code is likely to be inaccurate or irrelevant. HMRC has advised us that employment expenses of over £120 are being removed from the person’s tax code from 2026/27 if at least one of the following criteria is met:  The person has no current pay as you earn (PAYE) income, There has been an employment gap of a full tax year since employment expenses were claimed, No self-assessment (SA) tax returns have been filed since 2021/22 where there are indicators that the expense should have been resubmitted via self-assessment, and The employment expenses included within the tax code are greater than those included in their 2022/23 SA tax return.  Higher rate gift aid relief will be removed from the taxpayer’s tax code where:  the same amount of relief has been included in their tax code for at least three tax years, and no SA tax returns have been filed for at least three years.    HMRC says that any taxpayers who believe they are incorrectly impacted by these changes should submit a claim via the usual processes to ensure they still claim the tax relief they are entitled to. 

Revenue has published its Protected Disclosures Annual Report for 2025 which outlines  information on both the internal and external protected disclosures received by Revenue in 2025. The publication notes a continued year‑on‑year increase in external disclosures relating to possible tax or duty non‑compliance. Internal disclosures come from current or former Revenue staff and relate to potential wrongdoing within the organisation, while external disclosures are made by workers outside Revenue concerning potential tax, duty, or customs‑related wrongdoing. In 2025, four reports were received for consideration under Revenue’s internal policy on protected disclosure reporting in the workplace. In respect of the four reports received in 2025, assessments have been completed and follow-up procedures are ongoing, all of which are at an advanced stage. During 2025, follow up procedures in respect of four reports, which were received prior to 2025, were finalised. In three of these instances the assessment and detailed follow-up determined that there was no evidence of a relevant wrongdoing. In the fourth instance, the detailed follow up and recommendations from the Protected Disclosures Group, resulted in a strengthening of internal procedures. External protected disclosures are reports made by workers who are employed by a business, individual or organisation, other than Revenue, that contain information about potential wrongdoing related to tax, duty or customs controls. In 2025, a total of 1,743 reports were received through Revenue’s external protected disclosures channels, up from 930 reports received in 2024. After an initial assessment was completed for all 1,743 reports received in 2025, 241 reports were assessed as meeting the criteria to be considered as a protected disclosure. The publication indicates that compliance interventions opened on foot of the receipt of protected disclosure reports received yielded over €1.5 million in additional taxes and/or duties for the Exchequer in 2025. Commenting on the publication, Revenue’s Director of Internal Audit, Leeann Kennedy said “It has always been the case that Revenue welcomes all reports of information regarding suspected tax non-compliance or tax evasion. Revenue continues to demonstrate a clear commitment to its obligations under the Protected Disclosures Act by making it as easy as possible for workers to report information about potential tax related wrongdoing that they have encountered in a work-related context”.

In this week’s cross-border trading corner, we bring you the most recent Trader Support Service bulletin and the latest Brexit and Beyond newsletter from the Northern Ireland Assembly EU Affairs team. HMRC has also sent an update for businesses on the UK UK-EU SPS (Sanitary and Phytosanitary) agreement and HMRC has also sent comms on CERTEX validation and errors, including information for traders. Update for businesses on the UK UK-EU SPS agreement Readers may have already be aware that on 19 May 2025, the UK government and the European Union (EU) agreed to pursue a SPS agreement. This, together with the Windsor Framework, aims to make it easier, cheaper, and more predictable for goods to move not just between the UK and the EU, but also within the UK itself, including smoother movements from Great Britain to Northern Ireland. This agreement covers the trade, production, and movement of plants, animals, and their products, food and feed safety, broader nutrition-related areas such as food supplements, fortified foods, food for specific groups, nutrition and health claims, and nutrition labelling, wider agrifood rules related to food labelling, organics, key agri-food marketing standards, and compositional standards, in addition to the regulation of pesticides and biocides. More information has been published by Defra here: UK-EU SPS Agreement - Information for Businesses - GOV.UK This includes who these changes will apply to and when, the benefit of the changes, what these will mean for businesses, what businesses can do now to start getting ready, and the launch of a Call for Information to understand the impact of the agreement and what further support businesses need in order to prepare.   The Government will continue to update businesses as this progresses.

Last week, the Institute’s Head of Public Policy, Grant Sweetnam attended the inaugural Annual Savings and Investment Forum held at the Central Bank. The Tánaiste and Minister for Finance, Simon Harris T.D. addressed the Forum announcing his intention to introduce an Investment Account for Ireland. The Government intends to legislate for the Investment Account this year and for accounts to be offered from 2027. Savings and investment accounts form a fundamental pillar in Europe's Saving and Investment Union proposals to increase levels of investment among citizens. In Ireland, nearly €170 million in household deposits is held in low return deposit accounts which diminish in terms of purchasing power over time. The savings and investment account proposed by the Tánaiste is similar in nature to the Swedish model which was first introduced in 2012. Simplicity is central in the proposal with a proposed annual flat rate of tax to be applied and administered entirely by the financial provider rather than the individual investor. As a result, investors have no reporting obligations and individual transactions are not taxed. At the Forum a strong emphasis was placed on financial literacy. Improving understanding and confidence among individuals will be critical to increasing participation in capital markets over the long term. The Institute made the point that without financial literacy, the savings and investment accounts will not be as successful as they can be. The Tánaiste also indicated that the roadmap on taxation of investment products will be published in the coming months.