In Irish tax developments, the CCAB-I represented it members at the recent meeting of TALC Collections and addressed members issues regarding delays in response times at a meeting of TALC MyEnquiries.  On the UK front, the rate of interest for late payment of taxes is increasing again and read about what to expect now that HMRC’s light touch approach to compliance with the IR35 off-payroll working rules has come to an end. In International news, the OECD publishes its annual report on global tax administrations. Ireland At a recent meeting of TALC Collections the Institute, under the auspices of CCAB-I, made representations on behalf of its members, including issues filing non-compliant non-resident landlord tax returns. Where members experience delays in response times, Revenue recommend agents make contact using the “exceptional contacts” facility, following representations made by the Institute, under the auspices of CCAB-I, at a recent meeting of TALC MyEnquiries UK     3. HMRC’s interest rate for late payments of tax increases following the Bank of England interest rate rise.     4. HMRC’s IR35 light touch compliance approach has ended but system must be operated effectively and fairly says PAC. International       5. The OECD recently published its annual report, “Tax Administration 2022”, comparing trends across tax administrations in 58                   advanced and emerging economies. Keep up to date with all the latest Irish, UK, and international tax developments through Chartered Accountants Ireland’s Tax Newsletter. Subscribe to the Tax News by updating your preferences in MyAccount.

On 3 June 2022 the European Commission announced its sixth package of sanctions against Russia. Further details are now available  on the Institute’s webpage on sanctions. One of the measures is that the provision directly or indirectly of certain business-relevant services such as accounting, auditing including statutory audit, bookkeeping and tax consulting services, business and management consulting, and public relations services to the Russian government, as well as to legal persons, entities or bodies established in Russia are now prohibited. The relevant legal acts, a Decision 2022/884 and a Regulation 2022/879 have been published in the Official Journal. The recitals to Regulation 2022/879 provide a little more detail of the services which fall within the sanctions. They state that “......accounting, auditing, bookkeeping and tax consultancy services cover the recording of commercial transactions for businesses and others; examination services of accounting records and financial statements; business tax planning and consulting; and the preparation of tax documents….” Exemptions to the EU sanction are provided. There is an exemption for provision of services that are strictly necessary for the termination by 5 July 2022 of contracts which are not compliant with the Article (i.e now prohibited by the sanction) which were concluded before 4 June 2022 or of ancillary contracts necessary for the execution of such contracts. Exemption is also given for services that are strictly necessary for the exercise of the right of defence in judicial proceedings and the right to an effective legal remedy. An exemption is given for services for the exclusive use of entities established in Russia but owned, solely controlled, or jointly controlled, by an entity in an EU Member State. Derogations (which would have to be sought) are provided for services necessary for humanitarian purposes. The provisions are somewhat vague. For example, the wording on the applicable date is not entirely clear though it seems that the services are banned with a deadline for cessation of activities ,the provision of services that are strictly necessary, of 5 July 2022. Strictly necessary services are not defined either. On 24 June 2022 the EU Commission updated its FAQs to include an FAQ document on prohibition of certain business relevant services. You can click here to read the FAQs on sanctions on certain business relevant services. In the UK a ban on professional services exports to Russia was announced by the UK government  on May 4th.No further details have been publicly announced although we understand that legislation is being prepared on those sanctions. We will provide further information when available. Please see links below for some recent news items on this issue: European Commission press release on Sixth package of sanctions Arthur Cox, solicitors Linklaters Responses to the Russia/Ukraine Crisis – Sanctions Update No.3 Reed Smith This news item is provided as resources and information only and nothing in the news item  purports to provide professional advice or definitive legal interpretation(s) or opinion(s) on the applicable legislation or legal or other matters referred to in the news item. If the reader is in doubt on any matter in this complex area further legal or other advice must be obtained. While every reasonable care has been taken by the Institute in the preparation of the news item we do not guarantee the accuracy or veracity of any resource, guidance, information or opinion, or the appropriateness, suitability or applicability of any practice or procedure contained therein. The Institute is not responsible for any errors or omissions or for the results obtained from the use of the resources or information contained in the news item. Chartered Accountants Ireland can accept no responsibility for the content on any site that is linked to/from the Institute website. Links are provided in good faith for the potential support of members and students.

The Institute, under the auspices of CCAB-I, made representations on behalf of members at last week’s meeting of TALC MyEnquiries. Revenue provided updates including reply timeframe analysis, contact issues, technical issues and future system developments and enhancements. Where members experience delays in response times Revenue recommend agents make contact using the “exceptional contacts” facility.

The Institute, under the auspices of CCAB-I, made representations on behalf of members at last week’s meeting of TALC Collections.  Amongst the issues discussed, Revenue provided updates on debt warehousing, non-resident landlords and agent access to Customs & Excise printouts, and asked members to remind taxpayers to update their bank details on ROS if moving accounts from Ulster Bank or KBC. Debt Warehousing Scheme Revenue reminded the forum that it is vital that taxpayers availing of debt warehousing file all returns, even Nil returns, and pay current taxes as they fall due, otherwise the benefits of debt warehousing will be revoked. Revenue confirmed that while non-filing of VAT RTDs and other informational returns does not revoke the benefits of debt warehousing, if other returns are also outstanding, informational returns will be included in correspondence notifying taxpayers of their obligations. Revenue will not be writing to taxpayers who submitted their outstanding returns by 30 April 2022 to confirm their warehoused debt as the ROS screens should provide all the relevant information. In October, Revenue intends to contact taxpayers if their Period 2 ends on 31 December 2022  advising them of the end of that phase and asking them to provide a payment schedule. Revenue reiterated that taxpayers must engage with Revenue before Period 2 ends to outline their plans to pay the warehoused debt. Should a Phased Payment Arrangement (PPA) be required it must be applied for through the normal online channels, with caseworker approval. It is also possible to pay off the debt early. In terms of PPAs, Revenue confirmed that both warehoused and non-warehoused debt can now be consolidated within the same PPA and also clarified that the requirement to pay a down payment of 25 percent or 40 percent (depending on tax clearance status) applies to warehoused debt. Revenue wished to remind taxpayers that they would take a flexible and pragmatic approach depending on the case.  Non-resident landlords – strict legislative approach for 2021 Following representations by CCAB-I and other bodies last year, Revenue provided a work-around to enable the submission of the ROS Form 11 for the 2020 tax year for non-resident landlords who had not appointed a collection agent and where the tenant had not withheld tax.  At the time, despite the legislative position, Revenue agreed to provide a workaround given the difficulties being experienced in filing returns.   However last week, Revenue re-iterated its position that a concessionary measure similar to that permitted for filing 2020 ROS Form 11 returns will not be in place for the 2021 tax year. It is Revenue’s opinion that taxpayers should have had sufficient time to arrange their affairs to ensure the appropriate measures were in place for 2021. Revenue advised that if issues arise whereby non-resident landlords have neither appointed a collection agent nor arranged for the tenant to deduct tax at source for 2021, such cases should contact Revenue, and they will be dealt with on a case-by-case basis. Revenue stated that they would ensure that internal manuals advising case workers on how to deal with such cases would be reviewed and updated if necessary. Revenue acknowledged practitioners’ concerns that chargeable persons are not being permitted to file income tax returns and accepted the difficulties and arduous administrative requirements applicable to such landlords under the legislation but stated that it is its duty to implement the legislation. We will keep members updated via Chartered Accountants Tax News. Update bank details on ROS Revenue has asked us to remind readers to update their bank details for both online payments and repayments where they have changed banks as a result of Ulster Bank and KBC exiting the market. Revenue noted that there may be a need to update the details under more than one tax head and across several platforms. Revenue will also include a reminder in the June ROS Pay & File bulk issue. Customs & Excise Agent Access Following a request by the Institute, under the auspices of the CCAB-I, Revenue confirmed that agents should be able to access clients’ Customs & Excise weekly print outs for imports on ROS by the third quarter of 2022. Agent RTSO Payments access In light of representations made to Revenue, and its increased focus on employee share scheme compliance, Revenue acknowledged the need to improve the facility for agents to set up payment of Relevant Tax on Share Options (RTSO) on ROS. It intends to implement the required IT improvements in 2023.

Revenue’s Tax and Duty Manual on the Code of Practice in Determining Employment Status has been updated to insert a link to the revised code published in 2021.

Revenue has updated guidance regarding individuals described as ‘locums’ engaged in the fields of medicine, health care and pharmacy. The Tax and Duty Manual now refers to the revised Code of Practice on Determining Employment Status published in July 2021. Further detail is available in eBrief 125/22.

Revenue has updated its Tax and Duty Manual reflecting Finance Act 2021 amendments to the scheme of accelerated capital allowances available for gas vehicles and refuelling equipment. The scheme is extended to 31 December 2024 and capital expenditure incurred on or after 1 January 2022 on certain hydrogen vehicles and related refuelling equipment qualifies for the accelerated allowances.

Revenue has updated its Tax and Duty Manual to provide additional clarity for employed persons taking care of incapacitated individuals on the interaction between the tax relief available under sections 465, 466 and 467 TCA 1997. The computational examples throughout the guidance have also been updated to reflect the position for the current year of assessment.

In its 2023 pre-Budget submission, the Institute, under the auspices of the CCAB-I, has called for an overhaul of the personal tax allowance system to enhance those available to younger workers. Also among the asks is parity in the treatment of corporate and individual landlords to stem the flow of available rental property from the market. In a statement following the submission, the CCAB-I said that tax measures that support individuals and make Ireland an attractive place to live and work are critical to protect Ireland’s competitiveness particularly in the current challenging environment.   Read the submission in full here. The submission was covered widely in the media (see In the Media section below).

The Republic of Congo recently joined the international fight again tax evasion becoming the 165th member of the Global Forum on Transparency and Exchange of Information for Tax Purposes. Maria José Garde, char of the Global Forum, commented that “[t]he regular enlargement of the Forum’s membership highlights the importance given to tax transparency by the international community, and the resolve of governments to come together to fight and prevent tax evasion and avoidance." Read the full press release at www.oecd.org.

The OECD published its Analytics Maturity Model report recently. The report is part of the OECD Tax Administration Maturity Model Series and sets out descriptions of capabilities and performance in particular functions or sets of activities carried out by tax administrations across five discrete maturity levels. The intention of this series is to provide tax administrations globally with a tool to allow them to self-assess their current level of maturity and to facilitate consideration of future strategy, depending on a tax administration's unique circumstances and priorities.

The OECD recently published its annual report on global trends in tax administration. Tax Administration 2022 provides data comparing trends across tax administrations in 58 advanced and emerging economies. The report is intended to inform and inspire tax administrations as they consider their future operations, as well as to provide information on global tax administration trends and performance for stakeholders and policy makers. The report is structured around nine chapters that examine the performance of tax administration systems, using an extensive data set and a variety of examples to highlight recent innovations and successful practices. Read the full press release at www.oecd.org.

HMRC’s interest rate for late payments of tax is increasing once again, starting today for quarterly instalment payments of corporation tax, following the recent Bank of England interest rate rise to 1.25 percent. The rate of interest on late payment of most taxes will increase from 3.5 percent to 3.75 percent. The repayment interest rate remains unchanged at 0.5 percent. The increase takes effect as follows:- Today, 27 June 2022 for late quarterly instalment payments of corporation tax; and 5 July 2022 for late non-quarterly instalments payments of corporation tax and other taxes.

HMRC’s light touch approach to compliance with the off-payroll working (“OPW”) rules, commonly known as IR35, ended on 6 April 2022. However, a recent report by the Public Accounts Committee (“PAC”) “Lessons from implementing IR35 reforms” sets out that HMRC needs to demonstrate that the rules can be operated effectively and fairly. The PAC report also stated that “widespread non-compliance” with IR35 tax reforms in central government departments is “not acceptable” after HMRC “rushed implementation of the reforms; provided poor guidance; and public bodies struggled with its tool to assess status”. Prior to 6 April 2022 and except in cases of deliberate non-compliance, HMRC did not impose penalties for OPW inaccuracies before this date. From 6 April 2022, HMRC is expected to begin enforcing the rules leading to recovery of the relevant PAYE and NIC (and any Apprenticeship Levy) which is due either from the fee payer or the end client where the end client did not take ‘reasonable care’ when determining the status of the relevant engagement.

The latest tax gap data for 2020/21 has been published in HMRC’s annual ‘Measuring Tax Gaps’ report. The tax gap measures the difference between the amount of tax that should, in theory, be paid to HMRC, and what is actually paid. The tax gap is 5.1 percent in 2020/21 or £32 billion. According to HMRC, the 2020/21 tax gap estimates are affected by COVID-19 and therefore subject to more uncertainty than usual so there is the possibility of future revisions. Key findings are as follows:- The tax gap for Income Tax, National Insurance contributions and Capital Gains Tax is 3.5 percent (£12.7 billion) in 2020/21, which is the biggest share of the total tax gap by type of tax; and The VAT gap, which is the second biggest share of the total tax gap by tax type, decreased from 8.5 percent (£12.5 billion) in 2019/20 to 7 percent (£9 billion) in 2020/21. The tax gap publication excludes estimates of error and fraud in the COVID-19 support schemes. Updated estimates of COVID-19 error, and fraud will be published in HMRC’s annual report and accounts for 2021/22.  The tax gap report also breaks down the tax gap by taxpayer group however, as some judgement and assumptions are involved, the report explains that these estimates are subject to uncertainty, which cannot be accurately quantified. According to the 2020/21 report, small businesses accounted for 48 percent (£15.6 billion) of the tax gap, whereas wealthy taxpayers and individuals accounted for the smallest share of the tax gap at 5 percent (£1.5 billion) and 8 percent (£2.5 billion) respectively.  

Last week, HMRC launched one of two expected consultations as part of its project on raising standards in the tax advisers’ market. The current consultation “Raising standards in tax advice: protecting customers claiming tax repayments” aims to address concerns previously raised by taxpayers and stakeholders, including Chartered Accountants Ireland, about repayment agents. Views are being sought on how HMRC can protect and inform people who use specialist repayment agents to claim a tax refund. The consultation will run for 12 weeks to 14 September 2022. You can share your views by emailing repaymentsconsultation@hmrc.gov.uk or completing a survey. Specifically, views are being sought on:- Restricting the use of assignments, where the legal right to a repayment transfer from a taxpayer to an agent; Introducing measures designed to ensure taxpayers see material information about a repayment agent’s service before entering into a contractual agreement; and Requiring repayment agents to formally register with HMRC.

In this week’s EU exit corner, we bring you the latest guidance updates, news and publications relevant to EU exit. See also the most recent EU exit bulletin which features every Friday in Chartered Accountants eNews. The first meeting of a new HMRC forum also took place last week which will be examining the impact of future EU VAT changes for VAT registered businesses in Northern Ireland. Chartered Accountants Ireland is a member of the forum and will keep members updated. Miscellaneous updated guidance etc. The latest guidance updates, news and publications relevant to EU exit are as follows:- Search the register of customs agents and fast parcel operators; Get someone to deal with customs for you; Separation Agreement Joint Committee between the UK and EEA EFTA states: joint statement from the third meeting; UK-EEA EFTA Separation Agreement: Joint Committee; Notices made under the Customs (Import Duty) (EU Exit) Regulations 2018; Specialised Committee on Citizens’ Rights: agenda; Export or move livestock and poultry; Export horses and ponies: special rules; EU Settlement Scheme: applicant information; EU Settlement Scheme: community support for vulnerable citizens; Specialised Committee on Citizens’ Rights; and Customs declaration completion requirements for Great Britain.

This month’s tidbits cover a new HMRC manual on the residential property developer tax and the latest guidance in several areas.

HMRC’s latest schedule of webinars is now available for booking. Spaces are limited, so take a look now and save your place. HMRC’s has also made available a YouTube video which contains an overview of how to report COVID-19 support payments and grants on Company Tax Returns, what happens if you’ve claimed too much and the records that must be kept. If you have any questions, please send them to team.agentengagement@hmrc.gov.uk prior to the webinar, including the title of the webinar in the ‘Subject’ line of your email. HMRC will answer as many as possible on the day. Making Tax Digital for VAT: register here This webinar will provide some of the basics of Making Tax Digital for VAT. This includes what has changed, using software and keeping digital records, plus an introduction to penalty reform. From April 2022, these requirements apply to all VAT-registered businesses, to include those that have a turnover below the VAT threshold.

Do you use HMRC online services? Don’t be caught out by the planned downtime to some services. HMRC are warning about the non-availability of specific services on the HMRC website, a range of services are impacted. Check the relevant page for information on planned downtime.