Brexit

With just 34 days left to the end of the Brexit transition period deadline, the EU and the UK are racing against the clock to reach an agreement. With the EU stating their readiness to get “creative”, it does come with the disclaimer label of “not under any circumstance”. Read today’s bulletin to find out more on the latest negotiation developments. Additionally, the EU markets watchdog, ESMA, has stated that most financial derivatives will no longer be able to trade on UK venues once the Brexit transition period ends. Readers can also view the details on Microfinance Ireland’s new Brexit Business Loan for small businesses.    Time runs short as EU and UK race against the clock to meet the Brexit deadline The EU’s chief Brexit negotiator, Michel Barnier, is set to travel to London this evening as talks with his UK counterpart David Frost are set to resume following a COVID-19 scare. With just over a month left to go before the end of the transition period, Mr Barnier has said that the "same significant divergences persist". The main issues that need to be resolved remain to be governance, the level playing field, and fisheries. It has also been reported that Mr Barnier will be holding a meeting of fisheries ministers from eight coastal states, including Ireland, later today via video conference. With fisheries being one of three main areas of divergence in the negotiations, this meeting comes at a critical juncture in the Brexit trade talks. “There is a clear difference between being a full member of the Union and being just a valued partner” … Speaking at the European Parliament Plenary session, Commission President Ursula Von der Leyen has stressed that the next few days of the negotiations are going to be decisive, and that while the EU is well prepared for a no-deal scenario, an agreement would be preferred. She has also repeated that the EU are open to being creative to reach an agreement, but it needs to be understood that there is a “clear difference between being a full member of the Union and being just a valued partner”. “Get ready now” While the EU and UK battle it out to reach an agreement on the Brexit front, Irish Government ministers have intensified calls for businesses that have not yet prepared for Brexit to take immediate action. With expected delays and supply chain disruption in the agri-food sector dominating the latest headlines, Minister for Agriculture Charlie McConalogue has expressed concern that a significant number of agri-food, forestry, and fisheries firms who have traded with the UK in the past two years were still not ready for the transition period deadline, and the new customs arrangements coming into effect on 1 January 2021. Mr McConalogue said that these companies had not yet taken the initial step in being prepared for Brexit by registering for an Economic Operators’ Registration and Identification (EORI) number. Tánaiste and Minister for Enterprise, Trade and Employment Leo Varadkar is urging businesses to use available Government supports to mitigate the disruption Brexit will bring to the trading landscape, in addition to the adverse impact of the COVID-19 pandemic. Trading conditions between the UK and EU will change from 1 January 2021. To support this call for readiness, the Institute have outlined the top 10 things to do to prepare right now, whether you trade in goods, and/or services. 10 things to do: Goods   10 things to do: Services   EU market watchdog confines derivative trading for EU firms to within the Union The EU markets watchdog has stated that most financial derivatives will no longer be able to trade on UK venues once the Brexit transition period ends. The European Securities and Markets Authority (“ESMA”) have said in a statement today that firms will be obliged to continue using EU-recognised venues under a rule known as the “derivatives* trading obligation”. Under the rules of the “derivatives trading obligation”, derivatives covered under this requirement must be traded on venues within the EU or in third-country venues that have been granted equivalence. UK trading platforms will not have that recognition when Brexit takes effect at the end of the year. “At this point in time, ESMA does not consider that a change of its approach is warranted,” it said. The UK will have a similar ban on EU27 venues as of 1 January 2021 but has called for mutual recognition of the equivalence of each other’s rules in order to avoid a crucial part of the cross-border financial market becoming unfeasible when the Brexit transition period expires on 31 December 2020. *A derivative is a financial security with a value that is reliant upon or derived from, an underlying asset or group of assets. The most common examples for derivatives are stocks, bonds, commodities, currencies, interest rates, and market indexes. New Brexit loan scheme launched to support small businesses Microfinance Ireland has launched the Brexit Business Loan in order to support small businesses through the current Brexit challenges and protect job creation and sustainment in Ireland. These loans may be used to acquire short-term working capital and/or make required business changes as a result of Brexit. Loans for between €5,000 and €25,000 will be available to companies whose turnover has dropped or is likely to drop by 15 percent or more because of Brexit. Firms with a short term cashflow need due to Brexit will also be able to apply for the loans, which will be available for between six months and three years. Applicants can also use the Brexit Loan Calculator to calculate the monthly repayments. Brexit Bites Danish logistics company, DFDS, has launched a new direct ferry service between Rosslare Europort in Ireland, and Dunkirk in Northern France, giving Ireland landbridge-free access to mainland Europe. GOV.UK – Sign up for webinars or watch pre-recorded webinars about the new rules on trading with the EU from 1 January 2021.  

Nov 27, 2020
Press release

With only 40 days until the end of the Brexit transition period, businesses in Northern Ireland are being urged to use available information and supports to get ready for the new trading environment that they will face from 1 January 2021. There is still time for businesses in Northern Ireland to implement vital steps to prepare, according to Chartered Accountants Ireland.   A recent survey of accounting professionals in Northern Ireland conducted by Chartered Accountants Ireland, showed that only 2 percent of businesses say they are fully prepared for the changes Brexit will bring in the New Year, with 46 percent saying that they have some measures in place but are in need of more guidance. Commenting, Chair of Chartered Accountants Ireland’s Northern Ireland Tax Committee Alan Gourley said: “Businesses in Northern Ireland will be confronted with a starkly different trading landscape come 1 January. The Protocol on Northern Ireland/Ireland gives businesses some degree of certainty as to the customs controls they will face next year. Businesses must prepare for these changes by enhancing their own customs knowledge and registering for the Trader Support Service which will provide guidance and support for customs processes that will arise for goods moving between GB and NI. We are urging businesses to use all government support available. The UK government has issued practical information to cope with the end of the transition period across a wide range of sectors.” The UK government is encouraging traders, particularly those who have never had to deal with customs formalities, to sign up for the Trader Support Service (TSS) now in order to access guidance and practical support. Chartered Accountants Ireland’s survey showed that 80 per cent of respondents are now aware of the TSS, a significant increase on its last survey (60 per cent) and 30 per cent of respondents are now registered for the scheme, up from a low base of 18 per cent. Despite that, only 38 per cent plan to use the TSS in ensuring their customs preparedness.    Chair of Chartered Accountants Ireland’s Ulster Society Maeve Hunt said:  “Now is the time for businesses to act to ensure that they fully understand the implications of Brexit for their business.  I appreciate that there are still some important matters to be agreed by the UK government and the EU, and guidance is evolving, but now is the time for businesses to be speaking to customers, suppliers and logistics providers about how trade is going to work from 1 January.  There are other important areas, such as data transfer, trade in services and supply chain issues that are not yet subject to an agreement and could also greatly impact the way business currently trades across the border. Businesses need to become fully comfortable on how all these issues might impact their business.” Even though many businesses remain in a holding pattern, it is encouraging to see that there is intention on the part of the large majority to act soon with 92 per cent intending to upskill and enhance their customs expertise, and a further 22 per cent intend to register for the TSS in addition to those that have already done so since October. While clarity is still desired on a range of matters, there are things that businesses can do now to ensure they are prepared, regardless of the outcome of the UK / EU trade discussions. These include:  Critically examine your supply chain and consider your reliance on EU markets for goods and services provision. Contact your suppliers and logistics providers about the continuity of goods and services you need for trade. Register for the Trader Support Service to access all the latest guidance and obtain practical assistance with Customs declarations (if required). Get an EORI number and seek out a customs agent or enhance in-house customs knowledge if required. If you buy from / sell to Great Britain, you will need to identify the commodity codes for the goods you buy or sell. Check whether your current certifications, licences, insurance policies or authorisations will be valid post-Brexit. Companies operating in regulated sectors (such as financial services) may need to take steps such as contacting the relevant regulator. Understand where your data is hosted and how you transfer data across to the EU and whether you can continue to do so Consider the status of your workers, and how you can recruit or move staff within the framework of the new immigration rules of the UK. Seek out government supports available.   ENDS

Nov 27, 2020
Tax

Irish stories this week cover the Revenue Chairman’s appearance before the Public Accounts Committee. The Chairman responded to questions relating to bogus self-employment claims, the tone of Revenue engagement and difficulties facing the self-employed and SME sector in meeting their tax obligations due to COVID-19. In UK developments, HMRC has set out its policy on the tax treatment of virtual Christmas parties, and read HMRC’s updates including COVID-19 compliance checks. While in international tax, the OECD published a report on the activities and achievements in the OECD’s international tax agenda for the G20 leaders.       Ireland Revenue chairman, Niall Cody, appeared before the Public Accounts Committee last week, responding to questions on bogus self-employment claims, the tone of Revenue engagement and the difficulties facing the self-employed and SME sector in meeting their tax obligations due to COVID-19; The CCAB-I made further representations to the Minister for Finance highlighting concerns on the impact of the transfer pricing provisions contained in Finance Bill 2020, which were not abated in Committee Stage Amendments; UK Read about HMRC’s policy on the tax treatment of Christmas parties and what to do if you pay employees early in December; Key messages from recent HMRC meetings are available including important updates on compliance work in respect of COVID-19 supports; and   International The OECD published a report outlining the activities and achievements in the OECD’s international tax agenda for the G20 leaders.

Nov 26, 2020
Professional Standards

The UK Financial Intelligence Unit (FIU) has produced 3 Podcasts on SARS and these are available free online.  We strongly encourage you to take time to listen to these useful and informative podcasts. Podcast 1: SARs Frequently asked Questions Podcast 2: How SARs reporters can help combat Modern Slavery and Human Trafficking Podcast 3: What makes a good quality SAR?

Nov 26, 2020

Developments of interest this week are outlined. ROI IAASA has recently issued a paper discussing the audit of accounting estimates. IAASA has this week published an Information Note IFRS 8 Operating Segments – Identification of Chief Operating Decision Maker (CODM). UK Audit firms have implemented additional measures to enhance their evaluation of companies’ going concern assessments, since the start of the Covid-19 pandemic, according to a Review of completed audits by the Financial Reporting Council (FRC). The FRC has commended all the organisations that worked together to develop the recommendations of the Asset Management Taskforce’s Investing with Purpose report. The government and the FRC have this week published letters to the accounting and audit sectors setting out the UK framework for audit and reporting at the end of the transition period. International The IASB has published PTU/2020/5 IFRS Taxonomy 2020 — 'General Im­prove­ments and Common Practice — IAS 19 'Employee Benefits'. The IASB has issued an analysis of their work plan since it was last revised in October. The IFRS Foun­da­tion has released a pub­li­ca­tion that shows how existing IFRS re­quire­ments require companies to consider cli­mate-re­lated matters when their effect is material to the financial state­ments.  

Nov 26, 2020
Audit

Chartered Accountants Ireland have published Technical Alert (TA) 03/2020 to provide a brief outline of the significant changes to this standard and to direct members to additional sources of information and guidance on the implementation of the revised ISA 570.  This TA covers both UK and Ireland versions of the revised standard.  The revised standards strengthen the work effort required by auditors in their evaluation of management’s going concern assessment and there are enhanced reporting requirements for the audit report. These revised standards are effective for audits of financial statements of entities, for periods commencing on or after 15 December 2019 and will have widespread impact on our members.  For many audits that makes December 2020 year ends the first application  

Nov 25, 2020
Audit

Chartered Accountants Ireland have published Technical Alert (TA) 02/2020 to provide a brief outline of the significant changes to this standard and to direct members to additional sources of information and guidance on the implementation of the revised ISA 540.  This includes discussion on the need for preparers of financial statements to engage with their auditors to discuss the accounting estimates included in the financial statements.  This TA covers both UK and Ireland versions of the revised standard.

Nov 25, 2020
Careers Development

What is mentoring? The concept of mentoring is not a new one. The term mentoring comes from Greek mythology and Homer’s Odyssey. When Odysseus went travelling, he asked his trusted friend, Mentor, to care for and guide his son into adulthood. Today the definition of mentoring on Wikipedia ‘is a personal developmental relationship in which a more experienced or more knowledgeable person helps to guide a less experienced or less knowledgeable person.’ Essentially mentoring is an open dialogue which facilitates the transfer of knowledge and wisdom. It is typically a voluntary arrangement and the mentor is usually, but not always more senior. Reverse mentoring is now being increasingly recognised in terms of the benefits of having a younger person mentor a more senior professional, for example in the area of technology. In most cases mentoring takes the form of face-to-face conversations between two people and the discussions are shaped by the development needs of the mentee. The meetings allow not only the transfer of knowledge and experience but also of ideas, options and opportunities. Great possibilities can emerge from mentoring. The levels of interest in mentoring have been growing internationally. Companies and individuals alike have identified that they can benefit from the valuable learning and insights of those who have life and career experiences behind them. The benefits to be gained from mentoring have been experienced and recognised not just in the world of business but also in academia and education, sport, politics, medicine and many other areas. In the world of film and literature mentoring is often a key theme. ‘Tuesdays with Morrie’ and ‘Dead Poet’s Society’ are just two films that come to mind. What’s in it for you? Mentoring is a two way learning process and there are immense benefits to be gained for both the mentee and the mentor. ‘If I have seen further it is by standing on the shoulders of giants’ - Isaac Newton. Mentee perspective A mentor is someone whose hindsight can become your foresight. Mentoring will help you see things that you may not have recognised in yourself. This will enable you to identify your strengths and weaknesses and generally improve self-awareness. The quickest way to succeed is to learn from people who have been successful. Various studies have shown that being mentored is linked with achievement. The mentor can provide the mentee with valuable insights that they may otherwise not obtain. Mentees can gain an unbiased opinion and overview. This can be enlightening and help them to see themselves and their careers from a completely new perspective and enable them to unveil new possibilities. Mentoring provides the mentee with a forum in which to relax and open up whilst dealing with the real issues that are on their mind. These issues may not be addressed otherwise and major career ‘roadblocks’ can be removed. Mentoring is a powerful intervention. Many mentees report a boost in their confidence levels following a meeting with a mentor. This can in turn lead to an improvement in motivation and performance levels. If sustained, these new levels of drive may result in career progression or promotion. Mentees often gain an increased understanding of an area, sector or discipline. This new information allows them to consider new areas and explore other options, broadening their horizons and providing them with more possibilities. Mentor perspective There is a huge amount of satisfaction to be gained from the mentoring process and from being able to ‘give something back’. This can prove motivational and can reinvigorate the mentor’s own enthusiasm, recognising the difference they can make and the value they can add. The mentor too will learn from the process and it can often provide them with a new perspective on different areas, other generations or developments. It affords the mentor the opportunity to build on their experience and to enhance their communication and leadership qualities. The relationship often allows the mentor time to reflect on broader issues and to gain some perspective themselves. Choosing a mentor Choosing the right mentor is pivotal to the process. One option is to consider, ‘Who are the people in your life that could potentially act as your mentor? Ask yourself the following questions: Who has managed to get the very best out of me? Who has inspired and motivated me in my life? Who do I look up to, respect and trust? The other option is to consider using the structured Career Mentor Programme provided by Chartered Accountants Ireland. The Chartered Accountants Ireland Career Mentoring Programme The Career Mentor Programme was established by Chartered Accountants Ireland to provide members with access to a panel of carefully selected members. These members are a valuable resource due the experience, leadership skills and intellectual capital they have acquired throughout their varying careers. The role of the Career Mentor is to provide advice and guidance to other members in relation to their career development. The mentor has no obligation to assist mentees in job searches. The Career Mentoring Programme is a process for the informal transmission of knowledge, social capital, and the psychosocial support perceived by the recipient as relevant to career or professional development. It is an unofficial, voluntary, mutually-agreeable, and self-selected interaction between Chartered Accountants. It takes place when the mentee needs advice, guidance and support. The mentors are willing to freely share their own experiences and skills with the mentee. "It was a fantastic experience to speak to somebody with such knowledge, insight and passion for their role. He was extremely helpful and very generous with his time, giving me close to two hours. It really was very beneficial and something that I personally found very enlightening." - John Farrell Qualities to look for in a mentor The mentor you choose has to be right for you. Your choice of mentor can have a huge influence on how successful the relationship and process is for you and what benefit you obtain from it. Critical mentoring competencies include: Being a good listener and knowing how to give effective feedback. High levels of self-awareness Knowing how to help with goal setting and planning. Helping you to test the reality of your goals Knowing when to give and conversely when not to give advice. Providing constructive feedback and insights The ability to build trust, instil confidence and motivate people. Strategic questioning abilities. The ability to communicate professional experiences effectively. An effective mentor will: Offer challenging ideas and wise counsel Help build your self-confidence Offer inspiration Listen to career problems and offer encouragement Confront negative behaviours and attitudes Trigger self-awareness Provide knowledge of the career area sought Mutual Reward The most productive mentor/mentee relationships are those that result in a reciprocal exchange of knowledge. The mutual benefit results in a more equal and open relationship and this in turn can lead to a higher quality discussion, ideas and knowledge exchange. Conclusion Mentoring is a very positive and empowering process and experience which benefits not only the mentees but also the mentors and organisations. Mentoring is generally provided on a pro bono basis and provides the opportunity to give something back and create a legacy. Having a good mentor can significantly boost your career prospects and growth potential. So what are you waiting for? Find that mentor now!  

Nov 23, 2020
Tax

The OECD Forum on Tax Administration (FTA) has published a report on Advancing Gender Balance in the Workforce: A Collective Responsibility. This report, developed by the FTA's Gender Balance Network, sets out a range of policies and practices undertaken by tax administrations and their national governments to advance gender balance in the workforce.

Nov 23, 2020
Tax

As part of the ongoing work of the OECD/G20 Inclusive Framework on BEPS, the OECD secretariat is now seeking public comments on the 2020 review of BEPS Action 14, Mutual Agreement Procedure. The public consultation document seeks input on proposals for the 2020 review of the Action 14 Minimum Standard. The consultation is seeking input on the following items: Experiences with, and views on, the status of dispute resolution and suggestions for improvements, including experiences with mutual agreement procedures in those jurisdictions that obtained a deferral. Additional elements to strengthen the Action 14 Minimum Standard. Additional elements to strengthen the MAP Statistics Reporting Framework. The consultation is open for feedback until Friday, 18 December 2020.

Nov 23, 2020
Tax

As part of the BEPS Action 14 Minimum Standard and the wider G20/OECD tax certainty agenda to improve the effectiveness and timeliness of tax-related dispute resolution mechanisms, the OECD has released the latest mutual agreement procedure (MAP) statistics covering 105 jurisdictions and almost all MAP cases worldwide. The BEPS Action 14 Minimum Standard adopted in 2015 by the members of the OECD/G20 Inclusive Framework on BEPS seeks to improve the resolution of tax-related disputes between jurisdictions and includes a peer review mechanism to monitor the compliance of member jurisdictions with this minimum standard. The 2019 MAP Statistics show the following trends: The number of cases is increasing, driven by a number of factors, including increased globalisation as well as growing confidence in and knowledge of the MAP process. The number of cases closed is also increasing, albeit at a slower pace. The outcomes of the MAPs are generally positive, for example, around 85 percent of the MAPs concluded for transfer pricing cases in 2019 fully resolved the issue (compared to 80 percent in 2018), which reflects an improvement in the collaborative approach taken by competent authorities. Similar to 2018, only 2 percent of the MAP cases were closed without finding a mutual agreement. Cases are still taking a long time to be resolved, on average, MAP cases closed in 2019 lasted for 25 months.

Nov 23, 2020
Tax

The OECD has published a report to the G20 leaders outlining the activities and achievements in the OECD’s international tax agenda. The report covers areas such as addressing the tax challenges arising from the digitalisation of the economy and tax certainty issues. For more information you can read the report here.

Nov 23, 2020
Sustainability

A new report by the OECD outlines how greater global co-operation and a strong, targeted policy action is needed for a sustainable recovery from the COVID-19 crisis. The report outlines how governments need to plan now for the recovery while continuing to live with the virus. The OECD also identifies the need for stronger co-operation between governments in a number of areas including in the taxation of multinationals as the economy becomes increasingly digitalised. For more information you can read the report here.

Nov 23, 2020
Tax UK

The traditional Christmas party might be the ghost of Christmas past with virtual parties now the ghost of Christmas present. But what is HMRC’s view on the tax treatment of the virtual Christmas party? Happily, we have confirmation that the party may qualify for the well-known £150 per head exemption for annual parties and similar annual functions. The view from HMRC is set out below together with some guidance on paying employees early in December. “Having considered the scope of section 264 ITEPA03 (annual parties exemption), we are pleased to confirm that the exemption will apply to the costs associated with virtual parties in the same way that it would for traditionally held parties. Therefore, the cost of providing food, entertainment, equipment and other expenses which may be incurred in hosting a virtual event, will be exempt, subject to the normal conditions of the exemption being met. It is important to note that the intention of the exemption is to allow for costs of provision which are generally incurred for the purposes of the event itself, and that the event, along with any associated provision, is available to employees generally. We will be updating our GOV.UK guidance shortly. We know that some employers pay their employees earlier than usual over the Christmas period, for example the business may close for Christmas and New Year. If you do pay early, please report your normal payment date on your Full Payment Submission (FPS). For example: if you pay on 18‌‌‌ ‌December 2020 but your normal payment date is 31‌‌‌ ‌December 2020, please report the payment date as '31‌‌‌ ‌December 2020'. In this example the FPS would need to be sent on or before the 31‌‌‌ ‌December. Doing this will help protect your employees’ eligibility for Universal Credit, because reporting an early payment could affect further entitlements. For further information, please refer to the Employer Bulletin – 87, which will be published in early December 2020.”  

Nov 23, 2020
Tax UK

This week’s update looks at an important deadline for the job retention scheme and eligibility for the self-employed income support schemes if you’ve stopped trading. HMRC has also commenced post-payment compliance checks in respect of the Eat Out to Help Out Scheme and guidance has also been published as follows in respect of the scheme: Repay Eat Out to Help Out Scheme payments; and Eat Out to Help Out Scheme: receiving payments you were not entitled to Job retention scheme – 30 November deadline The deadline for submitting claims under the job retention scheme for periods that ended on or before 31 October is still 30 November 2020. Underclaims for periods up to and including 31 October must also be corrected by the same date. Readers are reminded that a different time limits applies where an employer needs to correct an overclaim. This must be done within 90 days of Royal Assent to Finance Act 2020 (22 July 2020) or 90 days of receipt of the grant, whichever is the later. Failure to notify HMRC of an overpaid grant may result in the imposition of interest and a penalty as well as repaying the excess grant. Amounts still due to HMRC will then be recovered through a special income tax charge on the employer. In order to act for your client in scenarios where HMRC conduct a check on their entitlement to claim CJRS, agents must be appointed for income tax purposes as recovery is made via an income tax charge. Guidance on how to pay all or some of your grant back if you’ve overclaimed, or if you do not need the grant and want to make a voluntary repayment is also available. Job retention scheme – annual PAYE schemes Under the extended CJRS scheme, it would appear that annual PAYE scheme employers may now be able to claim, subject to meeting the relevant conditions. They were previously unable to do so as CJRS up to 31 October 2020 required a payment of earnings in 2019/20 which had been reported on a RTI submission made on or before 19 March 2020. The extended CJRS is available for periods from 1 November 2020 onwards, for employees who were employed on 30 October 2020, as long as the employer has made a RTI submission to HMRC between 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee.  Self-employed income support scheme – cessation of trade A form is now available to use if you received an email from HMRC, asking you to confirm if you’ve stopped trading so that HMRC can check if you were eligible for the grant. Self-employed income support scheme – third grant We also expect guidance on eligibility for the third grant to be published this week and HMRC is telling us that applications for the third grant will open from next week. Claimants who fail to respond to HMRC when contacted about this will not be able to claim further grants.

Nov 23, 2020
Tax UK

This Institute regularly engages with HMRC on matters of interest to our members. Below is set out some key messages from recent meetings. Virtual Communications Group This group meets each month. At the most recent meeting on Monday 16 November various matters of interest were discussed including several in respect of the COVID-19 supports in addition to some important guidance and updates on HMRC’s compliance work in this area:- HMRC are seeking to resolve the issue which prevents anyone with an Irish passport who cannot otherwise verify their identity from setting up a government gateway ID – this has been a lobbying matter for this Institute in recent months; Updated guidance on the COVID supports will in future examine what happens if a business takes the opportunity to refresh/refurbish its premises etc. when closed; An update was received from the Making Tax Digital team giving more information on when HMRC moves all businesses from the VAT mainframe onto a different system starting in April 2021; and A letter is being sent to mid-sized businesses in the construction sector inviting feedback on ways HMRC can provide support. Responses have also been received as follows to a number of COVID support scheme compliance queries:- “What happens on compliance? For example, if claimants have received a grant and they have ceased trading? Anyone not entitled to a grant should notify HMRC as soon as possible to avoid a penalty. You should also pay back any grant amounts that you are not entitled to. More information is available on gov.uk: https://www.gov.uk/guidance/tell-hmrc-and-pay-the-self-employment-income-support-scheme-grant-back. HMRC has begun post-payment compliance checks to recover money paid out with the focus on those who claimed despite having ceased trading. More information is available on gov.uk:  https://www.gov.uk/government/publications/tell-hmrc-if-youve-stopped-trading-and-review-your-eligibility-for-the-self-employment-income-support-scheme. Anyone receiving an email from HMRC had until 20 November to avoid a penalty. Around 100,000 people were contacted about claiming SEISS who had told us on previously filed tax returns that they had stopped trading. We provided them with information about SEISS, including the eligibility criteria, in case they had restarted trading but had not needed to notify us yet. We did not want to exclude anyone from the opportunity of applying for the grant. We have recognised in our approach the need to get money to people ASAP and therefore invitations to claim were made to this group, along with details of eligibility criteria so customers could make a declaration as to whether they were eligible. We always intended to conduct follow up compliance activity for the scheme. Can agents be informed of how much SEISS has been paid out to a client so they can put it on their clients’ tax return? SEISS grants need to be returned as taxable income on 2020/21 tax returns due to be filed by 31 January 2022.  HMRC will publicise this nearer the time.  Clients should inform their agents (who complete their SA return for them) that they’ve received a SEISS grant, just like they do for the rest of their trading income.  How will HMRC ensure people include SEISS grants on their returns? Specific boxes will be included on 2020/21 tax returns for claimants to return information on their SEISS grants. HMRC are working with their IT partners to identify how the SEISS grant amounts can be pre-populated. All return boxes include guidance, and this is available via pop-up prompts when returns are completed online. HMRC will publicise the need to include SEISS grants on 2020/21 tax returns nearer the filing date of 31 January 2022. Anyone not including these grants in the relevant return may have the SEISS amounts corrected or could face an enquiry or penalty for filing an incorrect return.   What penalties will my client get if they didn’t know when they claimed they’d made a mistake, HMRC send a letter prompting them, and then they act to put it right after the deadline for notifying but before the repayment deadlines? If notification of liability to the income tax charge is made to HMRC before the end of the notification period, there is no penalty; If someone notifies after the end of the notification period, then a Failure To Notify (FTN) Penalty is applicable. These FTN penalties are the same FTN penalties that have applied since the regime was introduced by Sch 41, FA 2009, with the following exceptions: Where the claimant received a CJRS / SEISS / EOTHO payment knowing they weren’t entitled at that time, then the failure is treated as being deliberate and concealed, and the deliberate and concealed penalty scale will be applicable; For CJRS this “treated as deliberate and concealed” also applies to payments where the claimant knowingly has not used the monies to pay the costs intended (e.g. to pay their staff) within a reasonable period of time. This “treated as deliberate and concealed” is a new measure introduced by the Finance Act 2020, sch 16, para 13; There is no reasonable excuse for deliberate behaviour in relation to FTN penalties – this has always been the case since introduction of the FTN penalty regime in 2009; Where the claimant made a genuine error, and did not know at the time, then their behaviour is non-deliberate, with the usual penalty scales detailed in FS11 applying; Reasonable excuse can apply to non-deliberate FTN which would reduce the penalty to nil; An unprompted disclosure of a non-deliberate FTN, notified within 12 months of the tax being due, and full reduction for quality of disclosure would result in a nil penalty; and For non-deliberate failures, if the related income tax charge is paid before the due date, then the Potential Lost Revenue will be nil, and therefore the penalty amount will be nil. So ample opportunity to reduce the penalty amount to nil if the failure is non-deliberate in nature. Will HMRC issue an assessment with the payment reference number?  What drives the assessment? Is this something HMRC will issue automatically, or just if someone who has notified has not paid within 30 days? Or is the assessment mechanism for when HMRC spot an error that has not been notified to them? Everyone who has claimed CJRS/ SEISS / EOTHO has a responsibility to ensure their claims are accurate and repay any money they were not entitled to. No one who has tried to do the right thing has any need to be concerned, as long as they work with us to put it right [see CJRS repayment pages] - HMRC offers claimants the opportunity to declare errors and repay overclaims. By virtue of Paragraph 9, Schedule 16 of FA 2020 powers HMRC can recover amounts incorrectly claimed and not repaid by issuing an assessment, including amounts notified and not repaid within 30 days and where HMRC identify an error that has not been notified.” Representative Body Steering Group A query was raised in respect of delayed processing of paper CGT returns. HMRC has now confirmed that anyone affected will be given additional time to pay and won’t suffer because of a delay in processing their returns. As of Friday 9 November, there were 1,845 cases on hand, the oldest being 78 days old.  There is small amount of resource available each day to work through these cases. HMRC is to provide an estimate of how long the backlog will take to clear; The deferral of self-assessment payments on account was also discussed. The relevant HMRC team is keen to make it clear that only those adversely affected should benefit fromdeferral. Comms will be sent out to ensure that taxpayers and agents are aware that they need to deal with deferrals and TTP arrangements in good time for January – deferral guidance was updated last month; and At the request of this Institute, a temperature check will be taken in the December 2020 meeting in respect of the 2019/20 self-assessment deadline. This Institute continues to lobby for automatic suspension of 2019/20 late filing penalties for a period of three months.

Nov 23, 2020
Tax UK

If you need help with customs and move goods between Great Britain and NI or bring goods into NI from outside the UK, you might find the Trader Support Service (“TSS”) helps. We hear from representatives of a consortium selected by the UK government to deliver the TSS about what it can do and how you can register for the service. The latest weekly TSS newsletter is also available in addition to a recording and slides from last week’s Ulster Society TSS webinar and answers to Q&As on the day. “An Introduction to the TSS Writes Shanker Singham, Frank Dunsmuir, and Kevin Shakespeare – The TSS Consortium Traders across the UK should not lose sight of the fact that the NI Protocol (NIP) becomes effective on 1 January 2021, regardless of whether the UK and EU reach a deal.  Unlike GB’s external borders, where there will be a phased approach to customs controls with transitional processes in place for up to six months, the GB-NI boundary must be fully operational for 1 January 2021. In part, to recognise the difficulty that full implementation of the NIP may cause some traders who don’t think of themselves as involved in international trade because they buy and sell entirely within the UK, the government has created the Trader Support Service, which is free, at the point of use service for traders. The TSS is intended to fill a gap for NI traders who would otherwise have to pay customs declarations to trade across the GB/NI boundary. When the NIP is implemented on 1 January 2021, many things will change for people and firms who sell goods into NI from GB.  They will need to fill in customs declarations and may need to pay duties if their goods are at risk of entering Ireland through the porous NI/Ireland border which is a key aspect of the NIP. Precisely how duties, and potential rebates of those duties will operate is a matter for the UK and EU negotiations in the Joint Committee which the NIP set up, so it is not possible give total clarity on this point now. The most important thing for traders is that they register on the TSS portal (at tradersupportservice.co.uk ).  TSS cannot help those traders with customs declarations, or indeed with the wider training and education that the TSS offers without knowing details about the trader. So registration is critical if you wish to use this service. You may not think of yourself as a trader in the sense of international trade if you have only traded between GB and NI. You might be a company in Derry buying tools from a supplier in Wales. You might maintain a UK-wide computer distribution chain. In both cases, even though you might never have engaged in international trade, you will now need to put in place some of the processes typically associated with international trade in respect of your GB to NI movements.  So how will specific trader journeys change?  There will be changes for goods moving between GB and NI: For goods moving from NI to GB, the NIP generally provides for unfettered access. In practical terms, this means that there will not be any new tariffs, checks or controls except for a narrow category of controlled goods. Broadly, this means goods that are subject to treaties of which the EU is a member (such as CITES, or the Kimberley Process Certification Scheme governing the trade in rough diamonds), or goods where EU and UK rules, such as export controls, may differ. In these limited cases, export declarations will be required.  For goods moving between NI and Ireland there will be no new processes, tariffs or controls, but any process that exists now will continue in the future. Many traders trade goods between GB and NI via the Holyhead to Dublin route because it makes more logistical sense. They will still be able to do so in the future, but there will be some important differences.  First, they will need to use transit  procedures through the Irish portion of the route; and, secondly, their goods (if they are agri-food products or products to which SPS rules apply) will be subject to applicable SPS checks at border control posts or other authorised venues. Any trade between NI and the rest of the world will continue to be subject to customs procedures as they are today. Goods imported from the rest of the world may be subject to either UK or EU tariffs, depending on their intended final destination. TSS will help with doing customs declarations for traders by using simplified customs processes and under the customs facilitations and authorisations which TSS has.  TSS will also educate and train traders, not only in the specific customs declarations and how they will work, but also on wider issues related to the movement of goods from and to NI. This includes SPS and regulatory issues where checks will be needed because NI is in the EU’s regulatory zone for SPS and technical regulations under the NIP. The most important thing at this time is to register so that TSS is aware of you and can onboard your data so that declarations can be made on your behalf.  Once you register you can also avail of the numerous training courses which the TSS provides. Registration is also the only way that you can be auto-enrolled for an XI EORI number which will be important for trade.  Registration is easy and free.  About seven thousand traders have already registered. Don’t get left behind!”

Nov 23, 2020
Tax UK

HMRC and the UK Government continue to publish updates on COVID-19 related issues. When using a form or publication going forward or contacting HMRC, check you are using the most recent version or up to date way of contact which may have changed due to the pandemic. A further Treasury Direction in relation to the Coronavirus Job Retention Scheme and Job Retention Bonus has been laid; HMRC has published a briefing setting out how it intends to continue to support taxpayers and the economy during the pandemic over the coming months; A report from the National Audit Office has been published which examines the implementation of the Coronavirus Job Retention and Self-Employment Income Support schemes; Parents whose salaries are being partially paid by the new coronavirus support schemes will continue to be eligible for 30 hours free and tax-free childcare support even if their income falls below the minimum threshold requirement; HMRC has published guidance on the taxation of unplanned UK workdays where an individual was unable to leave due to COVID-19 travel restrictions; The Government has introduced a new access review process for businesses applying for funding from its COVID-19 Corporate Financing Facility which is open to businesses deemed to be investment grade equivalent as at 1 March 2020, and who make a material contribution to the UK economy; Check temporary changes to the time limit and rules for notifying an option to tax land and buildings; Read the guidance on import duty and VAT on protective equipment, relevant medical devices or equipment brought into the UK from non-EU countries during the pandemic; and The Government are investing £134 million in UK businesses to support innovative green businesses during the coronavirus pandemic and to encourage a green recovery.

Nov 23, 2020
Tax

Earlier this month HMRC published its Annual Report and Accounts for 2019/20 alongside quarter two 2020-21 performance data and the new Charter. The NI Tax Committee of this Institute responded to the Charter consultation in August and recommended that the wording on the important role agents play in supporting taxpayers be strengthened in the revised Charter. This was taken on board by the Government and is reflected in the newly published Charter. The following message accompanied the earlier mentioned publications. “Our Annual Report shows us building on our strong track record in collecting the money that pays for the UK’s public services and giving financial support to people – while responding to new and urgent priorities, such as the UK’s exit from the EU and the initial onset of the COVID-19 pandemic. You can read the Annual Report on GOV.UK The report reveals that £636.7 billion was collected in tax revenue last year from around 45 million individual taxpayers and five million businesses. That’s £100 billion more than just five years ago. Most of our COVID-19 work took place after the financial year covered in this report. It is inevitable we will see an impact from COVID-19 on some of our performance figures for 2020-21. Our quarter two performance results show that, while many customers are using HMRC’s online services to get the information they need, between July and August, HMRC received 7.3 million calls from customers to the helplines. The department aimed to maintain consistently high levels of customer service but it has been clear that since the start of the pandemic this wouldn’t always be possible. HMRC’s enhanced digital services give customers more of the support they need, without having to contact the helplines. Customer satisfaction for digital services was 86.6 percentage points in the second quarter of 2020 to 2021, almost 4 percentage points higher than the best quarterly result in 2019 to 2020. You can read all the data on GOV.UK. What is evident in the months ahead, is the need for HMRC to continue: supporting businesses and individuals through COVID-19 and beyond guiding businesses through the end of the UK’s transition period and helping them prepare for the biggest border change for more than 40 years encouraging customers to complete their Self Assessment tax return ahead of the 31 January 2021 deadline even if they can’t afford to pay in one go collecting tax debts from those who can afford to pay to tackle serious fraud and criminal attacks on the tax system, while increasing wider activity to make sure customers pay the right tax. It is a careful balance between bringing in revenue for the UK’s public services, maintaining a fair and level playing field for all and prioritising customer support to protect viable businesses.  After six months of consultation, HMRC has today published its updated charter which sets out its commitment to the highest standard of customer service.  You can read the Charter on GOV.UK.”

Nov 23, 2020
Governance, Risk and Legal

This week was Charity Trustees’ Week and every year it is a very timely opportunity to acknowledge the valuable contribution of volunteer trustees and celebrate the excellent work they do on charity boards and subcommittees. Giving is part of the Irish psyche, with Ireland ranked 5th in the most charitable countries in the world. This level of generosity is a testament to the commitment of trustees to build public trust in the charities sector through good governance and oversight of strategy to achieve charitable purpose, as well as working with stakeholders to deliver value for money and make a positive impact for all beneficiaries.  This week also saw the Good Governance Awards take place yesterday and this year they attracted the largest number of entrants to date, highlighting the commitment of charities to setting and maintaining high standards of governance.  As a body founded to act for the public benefit, Chartered Accountants Ireland is pleased to add our voice to others in commending trustees for their invaluable contribution to the charity sector and our society. The Institute celebrates the commitment of many of our 28,500 members to the charity sector as managers, employees, trustees, professional advisors, volunteers, regulators and, of course, as donors. We also acknowledge the role of beneficiaries (the raison d’être of charities) and members of the public for their important role in holding charities accountable and providing feedback on how charities can improve services and delivery. 2020 has been a very challenging year for charities due to the Covid-19 pandemic and many have had to radically adapt how they provide services and achieve their charitable purposes.  Many trustees have had to be more generous in their commitment, perhaps at a time when there were other increased demands from their businesses, employers or at home.  This year trustees have overseen the crisis management of some profound challenges for the charities sector, for example: Pressure on Fundraising - According to recent analysis by Benefacts in the first quarter of 2020, at least €0.9 billion was raised by charities in Ireland through fundraising and donations. This highlights the significance of fundraising to charities. Although fundraising on social media has been successful in some cases, it has not been possible for many charities to replace their large traditional fundraising drives involving face-to-face interaction. Christmas 2020 will be a critical time for charitable donations. Maintaining Existing Services - Additional costs of maintaining existing services with Covid-19 precautions are a burden, for example the cost of PPE. For those charities that rely on government funding and that are subject to an annual funding commitment from Government, rather than a multi-annual funding model, planning is restricted by the increased levels of uncertainty the Covid-19 crisis has entailed. Trustees have also to be commended, along with charity management, employees and volunteers, for stepping up and fulfilling a need in society for key services during this pandemic. We have seen many positives for the charity sector during 2020, including: A greater appreciation of the work of charities, for example, meals on wheels, supports to vulnerable groups and the broader healthcare and education systems delivered by and supported by many charities and volunteers. This should lead to more government support and greater empathy and understanding from the public. An increased ability of charities to progress the agenda of the sector on a number of policy fronts to government, for example highlighting deficiencies in services for some sectors of society, making recommendations for improving philanthropy and providing greater incentives for giving through tax reform on relief for donations. Members of the accounting profession are held in high regard by charity and not-for-profit boards and there is strong demand in the sector for trustees with accounting, finance and governance expertise.  We encourage members of Chartered Accountants Ireland with an interest in the sector to get involved and make a difference. Members of our profession have always been accountable and are held to a high standard in the application of their professional knowledge.  We would like to remind members that Chartered Accountants Ireland is here to support you in your role with various expert publications including guides and toolkits as well as courses and member support services. The voice of the sector is represented by charity and not-for profit groups in both the Republic of Ireland and Northern Ireland in addition to advocacy work undertaken on behalf of members engaging with regulators and standard setters. Finally, on behalf of the Council of Chartered Accountants Ireland, its Chief Executive and staff, we congratulate all involved in Charity Trustees’ Week 2020 and acknowledge the important work of this vital sector all year round.  Paul Henry President, Chartered Accountants Ireland  

Nov 20, 2020