In Sept 2024 the UK government announced the launch the Office of Trade Sanctions Implementation (OTSI), within the Department for Business and Trade. Click here also for further information. To equip the office with new civil enforcement powers, on 12 September 2024, the UK government passed the Trade, Aircraft and Shipping Sanctions (Civil Enforcement) Regulations 2024. Click for the explanatory memorandum. OTSI’s enforcement powers came into effect from 10 October 2024. They apply to all UK persons including businesses wherever they are in the world and any person including businesses in the UK or the UK territorial sea. The regulations introduce new civil enforcement powers, including the power to impose monetary penalties, for breaches of aircraft, shipping and certain trade sanctions. The regulations also give the Secretary of State the option to publish reports where a breach of sanctions regulations has occurred. Click for statutory guidance on the Trade, aircraft and shipping sanctions, civil enforcement. This information is provided as resources and information only and nothing in these pages 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 pages. 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 these pages, 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 these pages.    

A revised IGP approved by JIC and each of the Recognised Professional Bodies (RPBs) relating to the control of cases has been issued by each of the RPBs. Introduction of the revised Insolvency Guidance Paper – Control of Cases

Last week’s Autumn Budget and the first for new Chancellor of the Exchequer Rachel Reeves featured £40 billion in tax rises and was announced with the objective of repairing public finances because of £22 billion of “in-year pressures” whilst at the same time establishing a robust foundation for economic growth. However, the April 2025 changes in employer National Insurance Contributions (NICs) will increase the cost of employment for many businesses when combined with the increase in the national minimum and living wage. Smaller employers will be somewhat protected as a result of changes from the same date to the employer NICs employment allowance. The rates of capital gains tax were also increased from Budget Day with the Office for Budget Responsibility (OBR) estimating that this will raise an additional £2.5 billion. And buried in the Budget publications was the news that Making Tax Digital (MTD) for income tax will be extended to unincorporated businesses and landlords with turnover over £20,000 by the end of the current Parliament the precise timing for which will be set out at a future fiscal event. Chartered Accountants Ireland will be challenging the Government on this reduction in the MTD exemption limit. A range of changes to inheritance tax (IHT) were also announced with the aim of ensuring that the wealthiest estates will bear the greatest burden with the scope of agricultural and business property relief to be limited and the news that unused pension funds and death benefits payable from a pension into a person’s estate will be within the scope of IHT in future. The rate of stamp duty land tax on acquisitions of certain residential property in England and Northern Ireland was also increased from 31 October 2024. On the business side, the publication of the previously announced Corporate Tax Roadmap should provide businesses with more certainty and once again confirms that no changes will be made to the current rates of corporation tax, amongst other business taxes areas. The UK’s CT rate is currently the lowest in the G7. A response was also published to the consultation on potential regulation of tax advisers which the Institute responded to earlier this year. The consultation response sets out that from April 2026 the Government will mandate registration of tax advisers who interact with HMRC on behalf of clients. A further consultation will also be published on tackling rogue tax advisers. However, the consultation response is silent on any new measures to regulate the UK tax agent market. HMRC has sent a more detailed email setting out information on the consultation response and is planning a round table meeting later this month to discuss the way forward in more detail. Chartered Accountants Ireland will be in attendance. And finally, the Northern Ireland Executive will receive an additional £1.5 billion in funding in 2025/26 through the operation of the Barnett formula. Read the Institute’s Press Release reacting to the Autumn Budget 2024. The analysis herein is based on the publications of HMRC and HM Treasury. A more detailed analysis of the tax announcements features in the remainder of today’s UK section and will continue in next Monday’s edition of Chartered Accountants Tax News. The Institute’s UK Autumn Budget 2024 page also contains a range of resources. HMRC has also sent an email on the Budget announcements and one specifically for agents. An overview of all the tax legislation and rates announced has also been published.

Some capital gains tax (CGT) rates were increased from Budget Day and the rate of both Business Asset Disposal Relief (BADR), and Investors’ Relief (IR) will be increased in two stages starting from April 2025. A range of significant changes will also be made to inheritance tax (IHT) which will see IHT extended to death benefits payable from a pension into a deceased’s estate, in addition to changes to both business property relief (BPR) and agricultural property relief (APR). Previously announced changes, including the abolition of the CGT and income tax non-domicile regime from 6 April 2025 which will be replaced with a new residence-based regime, were also confirmed.  The territoriality of IHT will also move to a residence-based regime as planned. CGT rate increases For disposals made on or after 30 October 2024, the lower rate of CGT increased from 10 percent to 18 percent, whilst the higher rate increased from 20 percent to 24 percent.  These new rates align with the residential property CGT rates which remain unchanged. Carried interest is a performance-related reward received by a small population of fund management executives. From April 2026, carried interest will be taxed fully within the income tax framework, with bespoke rules to reflect its unique characteristics and a 72.5 percent multiplier applied to qualifying carried interest that is brought within charge. As an interim step, the two CGT rates for carried interest will both increase to 32 percent from 6 April 2025. The Government will also consult on introducing further conditions of access into the regime. CGT BADR and IR As a result of the newly increased rates of CGT, BADR and IR will both increase from 10 percent to 14 percent from 6 April 2025 and to 18 percent from 6 April 2026 to allow business owners time to adjust to the changes. The lifetime limit (LL) for BADR will remain at £1 million. In contrast, the LL for IR reduced from £10 million to £1 million for all qualifying disposals made on or after 30 October 2024. Chartered Accountants Ireland has previously questioned the policy need for IR and its high lifetime limit. The Government has also stated that it is committed to creating a positive environment for entrepreneurship and will work with leading entrepreneurs and venture capital firms on how policy supports that, including the role of existing tax schemes. A commitment was also made to make it easier for start‑ups and scale‑ups to access external sources of financial support. This includes, as already legislated for, extending the Enterprise Investment Scheme and Venture Capital Trust schemes to 2035. Non-UK domiciled status As previously announced, the non-UK domiciled regime, and thus the remittance basis of taxation for CGT and income tax, is being abolished from 6 April 2025. The remittance basis will be replaced with a residence-based regime. Individuals who opt-in to the regime will not pay UK tax on foreign income and gains (FIG) for the first four years of tax residence. Current and past remittance basis users will be able to rebase personally held foreign assets to the assets 5 April 2017 market value on a disposal, subject to certain conditions. Overseas Workday Relief will be retained and reformed, with the relief extended to a four-year period and the need to keep the income offshore removed. The amount claimed annually will be limited to the lower of £300,000 or 30 percent of the employee’s net employment income. The Temporary Repatriation Facility (TRF) is being extended from two to three years until 5 April 2028, expanding the scope to offshore structures, and simplifying the mixed fund rules to encourage individuals to spend and invest their FIG in the UK. The TRF will enable the individual to designate and remit at a reduced rate of tax any foreign income and gains which arose prior to 6 April 2025. This includes unattributed foreign income and gains held within trust structures IHT measures and reliefs IHT thresholds (£325,000 nil rate band, £175,000 residence nil rate band, and the £2 million residence nil rate band taper) will remain frozen at their current levels for a further two years beyond April 2028 until April 2030. Significant reforms to both APR and BPR were also announced. From April 2026, the first £1 million of combined qualifying agricultural and business assets will be entitled to 100 percent relief from IHT with the rate of relief reduced to 50 percent for amounts in excess of £1 million. The rate of BPR will also be reduced to 50 percent for shares designated as “not listed” on the markets of a recognised stock exchange, such as AIM. However, from 6 April 2025 the scope of APR will be extended to land managed under an environmental agreement with, or on behalf of, the UK government, devolved governments, public bodies, local authorities, or approved responsible bodies. As previously announced, the new IHT residence-based regime will commence from 6 April 2025. This includes ending the use of offshore trusts to shelter assets from IHT and scrapping the planned 50 percent tax reduction for foreign income in the first year of the new regime. From 6 April 2027 unused pension funds and death benefits payable from a pension into a person’s estate will be subject to IHT purposes. In doing so the Government aims to restore the principle that pensions should not be a vehicle for the accumulation of capital sums for the purposes of inheritance. £52 million is also being invested to digitalise the IHT service from 2027/28 with the aim of providing a modern, easy-to-use system for making returns and paying IHT.

It was again confirmed that there will not be any increases in the basic, higher, or additional rates of income tax, or employee National Insurance Contributions (NICs). The freeze on certain personal tax thresholds will also end from 6 April 2028. The treatment of some double cab pick-ups will change from vans to cars and the proposed household income system to assess the high-income child benefit charge will not proceed. Some tax thresholds to be defrosted The freeze on the income tax and employee national insurance thresholds will not be extended beyond 2027/28, meaning that from 2028/29 taxpayers can expect the thresholds to again begin to increase in line with inflation. However, as many of these thresholds will have been frozen since 2020/21, fiscal drag means that the tax burden has and will continue to rise because there have not been any inflationary increases. From 6 April 2025, the employee NICs Lower Earnings Limit (LEL) and the Small Profits Threshold (SPT) will both increase by the September 2024 CPI rate of 1.7 percent. The LEL will be £6,500 per annum (£125 per week) and the SPT will be £6,845 per annum. For those paying voluntarily, Class 2 and Class 3 NICs rates will increase from the same date by the same amount. The main Class 2 rate will be £3.50 per week, and the Class 3 rate will be £17.75 per week. Double cab pick-up vehicles to be treated as cars Following a Court of Appeal judgement, double cab pick-up vehicles (DCPUs) with a payload of one tonne or more will be treated as cars for certain tax purposes. The previous Government had planned to do so from 1 July 2024 as announced last February but did a U-turn on this after representations from industry. From 1 April 2025 for Corporation Tax, and from 6 April 2025 for Income Tax, DCPUs will be treated as cars for the purposes of capital allowances, benefits in kind, and some deductions from business profits. The existing capital allowances treatment will apply to those who purchase DCPUs before 6 April 2025. Transitional benefit in kind arrangements will apply for employers that have purchased, leased, or ordered a DCPU before 6 April 2025. They will be able to use the previous treatment, until the earlier of disposal, lease expiry, or 5 April 2029. High Income Child Benefit Charge (HICBC) reform to household income not proceeding The Government will not proceed with the reform announced in the Spring Budget 2024 to base the HICBC on household income. According to the Budget publications, this is because it would have come at a significant fiscal cost of £1.4 billion by 2029/30. However, to make it easier for all taxpayers to get their HICBC right, employed individuals will be able to pay the HICBC through their tax code from 6 April 2025, and Self-Assessment returns will be pre-prepopulated with Child Benefit data for those not able to do so. Starting rate for savings unchanged This will remain unchanged in 2025/26 at £5,000 and although this will allow individuals with less than £17,570 in employment or pensions income to receive up to £5,000 of savings income tax free, this does not take into account higher interest rates on savings income in recent years. Taxable status of Statutory Neonatal Care Pay The Government will legislate in Finance Bill 2024/25 to clarify the income tax treatment of Statutory Neonatal Care Pay which will ensure the payment is liable to income tax to ensure consistency with the tax treatment of other statutory maternity and paternity pay schemes. Employment related securities changes From 6 April 2025, the notice an employer must provide to an employee under a Share Incentive Plan regarding the possible effect of deductions from salary on entitlement to social security benefits and statutory payments must refer to statutory neonatal care pay. This will be legislated for in Finance Bill 2024/25. Further loan charge review to be commissioned A further independent review of the loan charge will be commissioned to help bring the matter to a close for those affected, whilst ensuring fairness for all taxpayers. Further details about the review will be set out by the Exchequer Secretary in due course.  Company car tax (CCT) rates for 2028/29 and 2029/30 announced The Government announced the rates for CCT for these tax years. CCT rates will continue to strongly incentivise the take-up of electric vehicles, while rates for hybrid vehicles will be increased to align more closely with rates for internal combustion engine vehicles in order to focus support on electric vehicles. The changes are as follows: Appropriate Percentages (APs) for zero emission and electric vehicles will increase by 2 percentage points per year in 2028/29 and 2029/30, rising to an AP of 9 percent in 2029/30. APs for cars with emissions of 1 – 50 g of CO2 per kilometre, including hybrid vehicles, will rise to 18 percent in 2028/29 and 19 percent in 2029/30. APs for all other vehicle bands will increase by 1 percentage point per year in 2028/29 and 2029/30. The maximum AP will also increase by 1 percentage point per year to 38 percent for 2028/29 and 39 percent for 2029/30. This means for vehicle bands with emissions of 51 g of CO2 per kilometre and over, APs will increase to 19 percent – 38 percent in 2028/29 and 20 percent – 39 percent in 2029/30. Qualifying care relief From 6 April 2025, qualifying care relief, the amount of income tax relief available to foster carers and shared lives carers will increase by the September 2024 CPI rate of 1.7 percent.

Although no changes will be made to a range of key business taxes as confirmed in the Corporate Tax Roadmap 2024, from 6 April 2025 the rate of employer National Insurance Contributions (NICs) will increase for all employers, and its 0 percent threshold will reduce. This is targeted to raise £26 billion, though it remains unclear if this takes into account the related tax effects of increasing employer NICs such as reduced employee NICs, income tax, and corporation tax. Transfer pricing is to be reformed, and the UK’s carbon border adjustment mechanism (CBAM) will be introduced from 1 January 2027 as planned. A range of enhancements were announced to the suite of the UK’s creative sector reliefs and the Pillar Two Undertaxed Profits Rule (UTPR), the final part of the G20-OECD Global Minimum Tax agreed by over 135 countries and jurisdictions, will take effect for accounting periods beginning on or after 31 December 2024. Corporate Tax Roadmap 2024 The promised Corporate Tax Roadmap 2024 has been published. This reinforces the previous commitment to cap the Corporation Tax Rate at 25 percent and maintain the Small Profits Rate at 19 percent. Marginal relief will also be maintained at its current rate and there will be no changes to Corporation Tax thresholds. Other key business taxes which will remain untouched are Full Expensing, the Annual Investment Allowance, the rates of R&D tax relief, and the Patent Box regime. In the Institute’s Pre-Budget Submission, we raised the importance of certainty and stability for the UK’s R&D tax relief regime, given its instability and the myriad of changes in recent years. The commitment to preserving R&D tax relief is therefore welcome. Employer NICs The rate of employer NICs will increase from 13.8 percent to 15 percent from 6 April 2025 and the secondary threshold will reduce to £5,000 (previously £9,100) from the same date. The secondary threshold is the level at which an employer is liable to pay employer NICs on each employee’s salary. This will remain at £5,000 until 6 April 2028 and will increase in line with CPI thereafter. To support small businesses with these changes, from 6 April 2025 the employment allowance will increase from £5,000 to £10,500 and the £100,000 eligibility threshold will be removed thus expanding this to all eligible employers. The current employment allowance gives eligible employers with employer NICs bills of £100,000 or less a discount of £5,000 on their employer NICs bill. Employer NICs relief for veterans The employer NICs relief for employers hiring qualifying veterans will be extended a further year until 5 April 2026. This means that businesses will continue to pay no employer NICs up to the annual earnings of the veteran’s upper secondary threshold of £50,270 for the first year of a veteran’s employment in a civilian role. Carbon border adjustment mechanism (CBAM) The Government has published its response to the March 2024 consultation on the introduction of a UK CBAM which the Institute responded to earlier this year. The response confirms that the UK CBAM will be introduced on 1 January 2027, placing a carbon price on goods that are at risk of carbon leakage imported to the UK from the aluminium, cement, fertiliser, hydrogen and iron and steel sectors. Products from the glass and ceramics sectors will not be in scope of the UK CBAM from 2027 as previously proposed. The registration threshold will be set at £50,000, retaining over 99 percent of imported emissions within the scope of the CBAM, while removing over 80 percent of otherwise registrable businesses. Over 70 percent of those removed from the CBAM altogether by this threshold are micro, small, or medium sized businesses.   Creative sector reliefs  As previously announced, from 1 April 2025 film and high-end TV productions will be able to claim an enhanced 39 percent rate of Audio-Visual Expenditure Credit on their UK visual effects costs. UK visual effects costs will be exempt from the Audio-Visual Expenditure Credit’s 80 percent cap on qualifying expenditure. Costs incurred from 1 January 2025 will be eligible. This measure will be legislated in Finance Bill 2024/25.   From 1 April 2025, UK films with budgets under £15 million and a UK lead writer or director will be able to claim an enhanced 53 percent rate of Audio-Visual Expenditure Credit, known as the Independent Film Tax Credit. Expenditure incurred from 1 April 2024 on films that began principal photography on or after 1 April 2024 is eligible. Also from 1 April 2025, the rates of Theatre Tax Relief, Orchestra Tax Relief and Museums and Galleries Exhibitions Tax Relief will be set at 40 percent for non-touring productions and 45 percent for touring productions and all orchestra productions. These rates apply UK-wide. Both these measures have already been legislated for.  R&D tax relief  In addition to a detailed email from HMRC’s R&D Communications Forum, the Government will discuss widening the use of advance clearances in R&D reliefs with stakeholders, with the intention to consult on lead options in Spring 2025. A document has also been published setting out further information on the scale and characteristics of error and fraud up to 2023/24, the policy and operational changes that have been made to address this, and further data on taxpayer experience.   Reform of transfer pricing  A further consultation on reforms to the UK’s rules on transfer pricing, permanent establishments, and the Diverted Profits Tax will launch in Spring 2025. This will include the potential removal of UK-to-UK transfer pricing. A consultation will also be published in Spring 2025 on further changes to the transfer pricing rules which will examine proposals such as:   lowering the thresholds for exemption from transfer pricing for medium-sized businesses whilst retaining an exemption for small businesses, and  introducing a requirement for multinationals in the scope of transfer pricing to report information to HMRC on certain cross-border related party transactions.  Alongside this, a review will be conducted on the transfer pricing treatment of cost contribution arrangements, to ensure that the rules are certain and do not act as a deterrent to investment that brings economic benefits to the UK.   Technical amendments will also feature in Finance Bill 2024/25 to provide certainty that Advance Pricing Agreements are available for financing arrangements covered by the Transfer Pricing rules in line with HMRC’s existing Statement of Practice 1 (2012).   Pillar Two UTPR   The UTPR will be included in Finance Bill 2024/25 and will take effect for accounting periods beginning on or after 31 December 2024. Technical amendments to the Multinational and Domestic Top-up Tax legislation will also be included in the Finance Bill to incorporate the latest international updates and stakeholder feedback.   Repeal of offshore receipts for intangible property   The offshore receipts for intangible property rules will be abolished for income arising on or after 31 December 2024, based on the Government’s view that the Pillar Two UTPR will more comprehensively discourage the multinational tax-planning arrangements that these rules sought to counter. Repeal will be legislated for in 2024/25.   Apprenticeship levy  As previously announced, the government will take steps to transform the Apprenticeship Levy (AL) into a more flexible Growth and Skills Levy by investing £40 million, with the aim of delivering new foundation and shorter apprenticeships in key sectors. The reformed levy will be developed in partnership with employers, providers, and learners.   Skills England will take the time to consult with a wide range of partners to ensure that levyfunded training meets the needs of employers, providers, and learners, and secures good value for money. Disappointingly, no mention was made of how this will be taken forward in Northern Ireland where the AL is a devolved function. 

Technical Roundup 1 November Welcome to the latest edition of Technical Roundup which is published on the first and third Friday of every month. In developments since the last edition, the European Securities and Markets Authority, in its annual European Common Enforcement Priorities Statement for 2024, has highlighted its areas of enforcement focus in 2025.  The Pensions Authority have published updated guidance for determining assumptions used in pension benefit statements, as required under regulation 34(4) of the European Union (Occupational Pension Schemes) Regulations 2021. Read more on these and other developments that may be of interest to members below. Financial Reporting The IFRS Foundation has published its 11th Compilation of Agenda Decisions by the IFRS Interpretations Committee. This covers decisions made in the period from May to October 2024. The IFRS Foundation has published its National Standard Setters October 2024 Newsletter. The International Accounting Standards Board (IASB) has issued its October 2024 Newsletter and podcast. The European Securities and Markets Authority (ESMA), in its annual European Common Enforcement Priorities (ECEP) Statement for 2024, has highlighted its areas of enforcement focus in 2025. This includes some areas of focus under the topics of financial statements, sustainability statements and ESEF reporting. The European Securities and Markets Authority (ESMA) has published a survey on legal entities identifiers, aiming to gather evidence on the impacts of including alternatives for reporting or record keeping requirements. The European Financial Reporting Advisory Group (EFRAG) is calling for technical experts in accounting and financial reporting to join its Financial Reporting Technical Expert Group which provides technical advice to the EFRAG Financial Reporting Board. The International Public Sector Accounting Standards Board has issued Exposure Draft (ED) 92, Tangible Natural Resources which is open for public comment until 28 February 2025. The UK Endorsement Board (UKEB) has published its two annual reports covering the year to 31 March 2024, including its report to the Secretary of State and its report to the FRC. UKEB has issued its Draft Comment letter on the IASB’s Exposure Draft — Equity Method of Accounting—IAS 28 Investments in Associates and Joint Ventures. This letter is open for public comment until 20 November 2024. UKEB has also published a Draft Endorsement Criteria Assessment (DECA) on the potential use in the UK of the IASB’s Annual Improvements to IFRS Accounting Standards – Volume 11. Accountancy Europe has issued its October 2024 Newsletter. The IASB has released a podcast hosted by Executive Technical Director Nili Shah featuring IASB Vice-Chair Linda Mezon-Hutter and IASB Member Bruce Mackenzie discussing the deliberations held during the October 2024 IASB meeting. Sustainability On 6th November, Chartered Accountants Ireland will host a free, 1 hour webinar on the CSRD. This will be the final webinar in our three-part series covering the CSRD. In this webinar, Derarca Dennis, Partner, EY and Chartered Accountants Ireland's Deirdre Moran will review some of the practical challenges that companies have faced in preparing to comply with the CSRD, matters to consider when developing and implementing a sustainability strategy, and the role of the Board. The Executive Committee of the World Economic Forum (WEF) and the International Business Council (IBC) have published a statement in which they welcome the progress towards establishing a global baseline of consistent and comparable sustainability information based on the ISSB standards. The International Sustainability Standards Board (ISSB) has released a podcast hosted by ISSB Chair Emmanuel Faber and ISSB Vice-Chair Sue Lloyd discussing the latest developments around the ISSB. In its recently published article on Medium, the Global Reporting Initiative (GRI) discuss why, as greenwashing scrutiny intensifies, legal teams must safeguard ESG integrity across all claims Accountancy Europe has issued its October 2024 Sustainability update. Economic Crime and anti-money laundering The Advisory Council against Economic Crime and Corruption was established by Government in 2022. The Irish Dept of Justice launched a consultation in October 2024 on developing a strategy for the Advisory Council to combat Economic Crime and Corruption. They are seeking the public’s views on what should be addressed in the strategy to combat economic crime and corruption. In October 2024 and to mark Anti-Slavery Week 2024, the National Crime Agency in the UK announced a Private Public Partnership to tackle sexual exploitation. The NCA announced that 31 financial institutions, law enforcement agencies and government departments have joined forces to tackle sexual exploitation. Click here to read more. Click to read the latest SARs in action from the UKFIU. It includes a feature on the Egmont Group of FIUs which works to enhance member capabilities and to improve secure information sharing, training, and best practice internationally. The magazine also provides information on The Joint Money Laundering Intelligence Taskforce where the Public Private Cryptoasset Forum has been developed as a new threat group within JMLIT+, with the intention of building links with the UK registered and regulated Cryptoasset industry, identifying opportunities for partnership and bringing members of the industry further into partnership work. The Institute’s Professional Standards Dept. has published its AML Supervision Report 2023/2024 which summarises AML supervisory activities in both jurisdictions, ROI and UK for the period April 2023 – April 2024. Please see the report for case studies on AML including deficiencies identified and how they were rectified. The report identifies emerging risks including crypto currency, the increasing prevalence of artificial intelligence and the continued potential for post-Covid fraud. Issues arising from the Ukraine crisis also remain in focus. The report examines what compliant means and most common findings on monitoring visits and desk-based reviews. Other Richard Moriarty reflects on his first year leading the FRC in an 'In Conversation' podcast episode, hosted by Kate O'Neill, Director of Stakeholder Engagement and Corporate Affairs. Accountancy Europe is promoting the topic of the attractiveness of the accountancy profession through online campaigns, events and blog articles. A recent online story is regarding the work done by the Norwegian Institute of Public Accountants (NIPA) to improve the image of auditors and attract new talent. The Corporate Enforcement Authority held its second annual conference on Thu 17 October. Representatives from our technical team attended and please click to read a summary of the discussions at the conference some of which might be of interest to our readers. Click here to go to the CEA pages where you can find copies of slides and speeches made available after the event. Readers may be interested in the October 2024 UK judgment in the case of  Standard Chartered Plc and others. Upon the cessation of publication of LIBOR, the issue in the case was whether a replacement rate to LIBOR should be implied in a legacy contract. The court implied a term into the contract for a replacement rate and held that an implied term that shares should be redeemed and the contract unwound was untenable. Click to read an interview on the European Commission website with Mairead McGuinness European Commissioner for Financial Stability, Financial Services and the Capital Markets Union on her mandate, where she thinks most progress was made, and how she sees the future of finance. The Pensions Authority have published updated guidance for determining assumptions used in pension benefit statements, as required under regulation 34(4) of the European Union (Occupational Pension Schemes) Regulations 2021. Charity Trustees’ Week takes place on 11 to 15 November this year to thank trustees across Ireland for their important work in the area of governance and leadership of charities. It is organised in partnership by the Charities Regulator, Boardmatch Ireland, Carmichael, Charities Institute Ireland, Dóchas, Pobal, The Wheel, and Volunteer Ireland.  Click here for further details. Jonathan Reynolds, the UK Secretary of State for Business and Trade, issued a statement on 14 October to announce the publication of a green paper  which outlines plans to deliver Invest 2035: The UK’s Modern Industrial Strategy. He also announced proposed changes to company law. Click for the announcement which proposes changes by year end to reporting requirements and uplift the monetary size thresholds for micro-entities, small and medium-sized companies, as well as making technical fixes to the UK’s audit framework. The Department of Enterprise, Trade and Employment will be hosting a free online event focused on responsible business and the environment at 11am on Wednesday, 6 November 2024. Click for IDA insights article on “What makes Ireland an extraordinary partner for leading global companies” In news on the Funds sector, the Minister for Finance this month published the Report of the Funds Sector 2030 (Review). The review examined Ireland’s funds sector framework to ensure it is up-to-date, taking account of the significant developments in recent years, to support the long term growth in the sector in Ireland. It concluded that Ireland is well placed to grow in the funds and asset management sector. The review also developed a set of recommendations to address the most material issues and to put in place measures that will help navigate the further changes that are coming in a controlled way. Also in Funds news, click to read remarks by Central Bank of Ireland Deputy Governor Derville Rowland “Past, present and future of Exchange Traded Funds’ at an event in October 2024 on Unlocking the Potential for Europe and Ireland. The FCA has published the results of a survey to better understand how firms record and manage allegations of non-financial misconduct. The survey of over 1,000 investment banks, brokers and wholesale insurance firms found that the number of allegations reported increased between 2021 and 2023. In the UK, Companies House has outlined its transition plan for Companies House in relation to the Economic Crime and Corporate Transparency Act 2023 (the Act). The Act will reform the role of Companies House and improve transparency over UK companies and other legal entities. There were certain changes implemented in March 2024 with the next wave of anticipated in winter 2024 and into 2025 as follows: Companies House should be able to: expedite the striking off of companies where the registrar has concluded the company has been formed for a false basis. annotate the register in a wider range of circumstances, such as when a company has a director who has been disqualified but has yet to terminate their appointment on the register, or where Companies House has issued a statutory notice to require more information from a person, but the matter remains unresolved. The transition plan is available here along with our information booklet on the changes already implemented available here.   This information is provided as resources and information only and nothing in the information 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 information. 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 information 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 herein.

Data use is skyrocketing, raising ethical concerns beyond regulatory compliance. Colm McDonnell explores how embedding digital ethics ensures fairness, transparency, and accountability in organisations Data has become an integral part of modern life, and its usage is growing exponentially. From businesses to governments, organisations are collecting, storing, and analysing vast amounts of data to gain insights, make decisions, and develop new products/services. However, with great power comes great responsibility. The more data organisations process, the bigger the spotlight on them, not only to ensure regulatory compliance but also to focus on the significant ethical concerns resulting from data collection and its use. Furthermore, the growing use of technology, including artificial intelligence (AI) and robotics, stems concerns about the extensive use of data and the potential for misuse. What is digital ethics? Doing the right thing, regardless of legislation, takes you into the field of ethics. Organisations usually focus on various regulatory obligations that they must comply with, but organisations also have a responsibility to their stakeholders, including their employees, customers, vendors, and investors. This goes beyond regulatory compliance. Accountability can be complex to define and demonstrate, often leading organisations to set out some principles they should adhere to such as privacy, fairness, non-discrimination, transparency, and more, while processing data. Embedding digital ethics into an organisation involves promoting the moral values of the organisation through the alignment of data processing practices and processes with those values. Digital ethics refers to a set of principles and moral values that guide the responsible and ethical use of data. The following eight guiding principles define an approach to AI and digital ethics. Code of digital ethics All organisations should establish a code of digital ethics that sets out their commitments to ethical data practices. Digital ethics by design should be considered right from the outset of any product development, product enhancement or any proposed processing of data. Periodic training and awareness programmes should be rolled out to promote awareness of ethical data processing practices. This will eventually build a culture of trust, transparency, and safety within the organisation. Human oversight and determination Organisations must make sure AI systems do not take the place of human accountability and responsibility. There needs to be human oversight and safeguards in place to prevent misuse of data. There should be cross-functional stakeholder collaboration and effective governance. Proportionality, do no harm, safety and security AI systems should only be used as much as is required to accomplish a valid goal. Risk assessment should be utilised to prevent any potential harm from these types of applications. Fair and transparent algorithms Organisations must ensure that their decision-making and algorithms are fair and impartial. This can be achieved through ongoing monitoring and periodic testing. Transparency and explainability Data should be collected and used with transparency, so individuals understand how their data will be utilised thereby allowing them to make informed decisions about whether to share their data. Further, where deemed necessary, before collecting data, organisations should seek consent from individuals. This consent should always be freely given and be fully informed. Inclusion Unconscious or conscious bias can affect inclusivity in an organisation. Organisations should take the necessary steps to ensure the processing of data does not result in or hide discrimination or bias. Vulnerable data subjects who are the most susceptible to negative consequences of processing require additional consideration. Autonomy, freedom, respect, privacy, and dignity Individuals must be able to make their own decisions, take their own actions, and make their own choices. Processing of data should not constrain human beings in how they want to live their lives. Autonomy for individuals to control how their data is processed should be ensured. The processing of the data should be respectful of human values. Specifically, when the processing is carried out through AI, the outcome should not dehumanise individuals. Sustainability AI innovations should be evaluated to consider their effects on the environment and their ability to sustain through periods of time. These innovations should align with the organisation’s sustainability goals. Colm McDonnell is Partner of Risk Advisory at Deloitte

On Wednesday, the Chancellor of the Exchequer, Rachel Reeves announced the Labour government’s first Autumn Statement. The government has set out to restore balance in the public finances, however businesses are concerned that they will bear the burden of this rebalancing act. While the need to balance public spending is key to the government’s decisions, the innovative tax policies needed to drive long-term growth and sustainability are not evident in the package announced this week. Chartered Accountants Ireland is particularly concerned that the increase in employers’ National Insurance will not be sustainable for many businesses. While the allowances may provide some protection for the most affected businesses, it is adding to businesses’ already bulging employment costs. You can read our coverage of this week’s Autumn Statement in our Special Tax Newsletter which issued on Wednesday evening. You can also read our press release which issued following the Budget announcement.

As businesses navigate a new landscape, the CSRD challenges them to comply, but also to seize the opportunity for growth through sustainability, writes Dave O’Shaughnessy Embarking on a new era of transparency and accountability, the European Corporate Sustainability Reporting Directive (CSRD) is set to revolutionise the way large and publicly listed companies disclose their environmental, social, and governance (ESG) practices. Phase 1 of the CSRD targets large companies meeting at least two of these criteria: over €50 million in net turnover, more than €25 million in balance sheet totals, or an average of 250 employees annually.   This directive unfolds progressively through to 2029, with the goal for entities to measure, understand, and communicate their ESG impacts in a transparent, consistent, and comparable way. The scope of the directive, in terms of the amount of data needed and the specific requirements, including presentation, digital tagging, comparative data analysis, and digital submission, is broad and detailed. There are more than 800 individual data points within CSRD, of which almost 200 are mandatory.  CSRD incorporates quantitative and qualitative metrics, to measure the impacts, risks, and opportunities of upstream, own-operations and downstream activities, based on a thorough double materiality assessment. Moving beyond compliance Companies now have the chance to extend their vision beyond mere compliance requirements by leveraging the wealth of data and analytics at their disposal to unlock a multitude of untapped opportunities. Preparation and presentation of comprehensive ESG reports provide organisations with actionable insights about their business that they did not previously have. Organisations are increasingly recognising that a well-defined sustainability strategy is essential for long-term success. As they develop and refine these strategies, the need for technology that not only supports but also enhances their sustainability goals becomes clear. These strategies should be adaptable and scalable, evolving in tandem with the organisation’s growth and sustainability ambitions. By integrating advanced data management systems, organisations not only meet their ESG reporting needs but also provide a platform for performance monitoring and management, as well as scenario modelling to shape future initiatives. The right technology is a catalyst, propelling organisations towards their sustainability objectives and unlocking new opportunities for responsible growth. For assurance, it’s essential to have systems in place that can accurately track and document ESG initiatives, allowing for third-party verification. This helps to confirm that the reported data is complete, accurate, and consistent with relevant standards and frameworks. Assurance processes also provide stakeholders with confidence that the organisation’s ESG disclosures are trustworthy and that it is committed to transparency and accountability. Delivering value through technology Scalable, adaptable, and flexible technology should provide the backbone of every organisation’s ESG strategy. Organisations require a technology solution that will streamline the data integration process and automate the collection, collation, analysis, and reporting of ESG data for relevant reporting frameworks. Implementation of a comprehensive data management system will not only help companies streamline data integration and automate ESG data handling for reporting frameworks but also meet their ESG reporting and assurance requirements.  A 2023 NASDAQ research report that interviewed 150 global sustainability, finance, and legal executives found that investment in ESG software is helping to improve organisational collaboration, mitigate risks, and meet ambitious ESG and sustainability goals. One of the predominant challenges that we are seeing for many organisations relates to value chain reporting. The need to share detailed, potentially sensitive, data between value chain partners, from raw material extraction to end-of-life disposal and recycling certainly brings an added level of complexity. Value chain reporting requirements for scope 3 emissions and on social areas, such as child labour and modern slavery, challenge the traditional definition of an organisation’s boundaries. As well as the processes and systems needed to capture accurate and reliable data, the related governance and cultural implications of this fundamental shift are complex and challenging.  To meet these challenges, companies need to leverage technology that is adaptable to different frameworks including all the necessary integration capabilities with internal systems. A future-proof solution that meets today’s reporting and ESG management needs, while also incorporating additional evolving regulatory requirements and others that may follow, is needed. Looking beyond reporting CSRD is in force and although the new sustainability reporting requirements may seem vast and onerous, the opportunity it provides to look beyond reporting and to explore new and innovative options is compelling. The need for an ESG reporting solution that is adaptable, scalable, and integrated is clear. Dave O’Shaughnessy is Sustainability Reporting Partner at EY

The introduction of Enhanced Reporting Requirements on 1 January 2024 has resulted in increased scrutiny of the taxability of employee benefits and expenses, writes Jillian O’Sullivan We have seen a shift in Revenue focus during PAYE interventions not only to matters within scope of Enhanced Reporting Requirements (ERR) reporting but also to staff entertainment. It is, therefore, critical that employers now consider whether they are required to submit a PAYE Settlement Agreement (PSA) application before the 31 December deadline. This process enables employers to account for income tax, Universal Social Charge (USC) and PRSI due on taxable employee benefits and expenses that have not been accounted for via the PAYE system during the year, to ensure payroll tax compliance is managed appropriately. What is a PAYE Settlement Agreement? Many employers provide benefits and expenses to employees, such as staff entertainment, vouchers and other gifts. Unless these benefits and expenses fall within the terms of specific tax exemptions or Revenue concessions, they are liable to payroll taxes on a real-time basis. PSAs are an administrative arrangement that allows employers to pay taxes on behalf of their employees on benefits and expenses that are ‘minor and irregular’ in nature in one annual settlement on a grossed-up basis. Deadlines A written application must be submitted to Revenue by 31 December 2024 for the PAYE year 2024. Taxes due under the agreement must then be paid over by 23 January 2025. Included PSA items The benefits or expenses to be included must be non-cash, minor in nature and amount, and irregular with regard to the frequency the benefits or expenses are provided. Examples of taxable items that could be included in a PSA are: Staff entertainment; Staff lunches/drinks/meals; Staff awards and prizes; and Staff gifts where the small benefit exemption has otherwise been utilised, e.g. wedding, birthday, baby, Easter and Christmas gifts. Get proactive With the increasing scrutiny by Revenue on payroll tax compliance, it is essential for employers to proactively assess their obligations regarding PSA. Ensuring that all taxable employee benefits and expenses, including staff entertainment and gifts, are accounted for can help avoid potential penalties and maintain good standing with Revenue. The 31 December deadline for PSA applications for the 2024 PAYE year is a critical date that employers should not overlook. By meeting these requirements and preparing well in advance, businesses can streamline their tax processes, reduce administrative burdens, and foster a compliant and transparent work environment. Jillian O’Sullivan is Corporate Compliance Partner at Grant Thornton

Professional Standards Department is pleased to publish its AML Supervision Report 2023/24. This Report summarises our AML supervisory activities in both jurisdictions, ROI and UK for the period April 2023 – April 2024.

The government has identified a significant ‘tax gap’ across the UK economy. The tax gap is the difference between what should be collected (based on taxpayer data) and what is actually collected. Over the next five years, the government is expanding HMRC’s resources in an aim to bring in an additional £6.5 billion per year in tax revenue. The plan to bridge the tax gap includes a commitment to overhauling HMRC’s IT system. It is proposed that this will improve HMRC’s debt management system by ensuring tax debt is settled faster, making the overall organisation more productive. The government announced that an additional 5,000 compliance staff will be recruited, while 1,800 debt management staff will be maintained and recruited. Taxpayers can also expect digitalisation to simplify interaction with HMRC allowing taxpayers to self-serve and manage their own tax affairs.

The government announced that it is capping the headline rate of corporation tax at 25 percent, the lowest across the G7. It has committed to maintaining the capital allowances system, preserving the R&D tax relief, and developing a new process for increasing tax certainty in advance of major investments. In our letter to the Exchequer Secretary to the Treasury ahead of today’s Budget, we raised the importance of certainty and stability for the R&D tax relief, given the myriad changes in recent years. As such, it is welcome to see a commitment to preserving the R&D tax relief. Offshore trusts The government announced that transitional arrangements will be introduced to tackle offshore trusts which are used to shelter assets from inheritance tax (IHT). The details of how these measures will operate will be discussed in due course once those details become available. Carried interest The tax treatment of carried interest will be reformed by increasing the capital gains tax (CGT) rate on such interest to 32 percent. From April 2026, a revised regime will apply which will have bespoke rules reflecting the characteristics of the relevant reward. VAT on private schools The government has maintained its commitment to introduce VAT on education and boarding services provided by private schools. From 1 January 2025, VAT of 20 percent will apply to charges for services provided by private schools in this regard.

The government has taken the decision to increase employers National Insurance contributions by 1.2 percent to 15 percent from 6 April 2025. The secondary threshold will reduce to £5,000 (previously £9,100). The secondary threshold is the level at which an employer is liable to pay National Insurance on each employee’s salary. The government has increased the Employment Allowance to £10,500 (previously £5,000). The allowance will also be extended to all eligible employers by removing the £100,000 cap. This means that businesses will be able to employ up to four workers on the National Living Wage on a full-time basis without a liability to employers’ National Insurance arising. The government has not raised employee National Insurance at this time. This will ensure that the tax burden on individual workers is not increased further (we note that the tax burden has increased due to lack of indexation of the tax bands relative to inflation). The income tax and National Insurance contributions thresholds will be unfrozen from 2028-29 onwards.

As expected, the government has increased the capital gains tax (CGT) rates and maintained the freeze on personal tax thresholds (although it has not been extended). There have been significant changes announced in inheritance tax (IHT) which will see IHT extended to death benefits payable from a pension into a deceased’s estate, as well as changes to both business property relief and agricultural relief. The government also announced the abolition of the non-domicile regime with effect from April 2025. The remittance basis of taxation for non-domiciled persons will be replaced with a residence-based regime. Personal tax thresholds The freeze on personal tax thresholds on income tax and national insurance will not be extended, meaning that from 2028/29 taxpayers can expect the thresholds to again increase in line with inflation. As the thresholds remain frozen, it means that the actual tax burden on workers is increasing because of the effect of inflation. Capital gains tax rate increases The lower rate of CGT is set to increase from 10 percent to 18 percent, with the higher rate increasing from 20 percent to 24 percent. These new rates will align with the residential property rates which remain unchanged. CGT Business Asset Disposal Relief In support of entrepreneurship, the government has announced an increase in Business Asset Disposal Relief (BADR) to 14 percent from 6 April 2025 and 18 percent from 6 April 2026. The lifetime limit for Business Asset Disposal Relief (BADR) will remain at £1 million. Inheritance tax changes The freeze on the IHT thresholds will be extended for a further two years until April 2030. According to the government this means that 90 percent of estates each year will not pay inheritance tax. In a significant move, the government will introduce legislation charging IHT on unused pension funds and death benefits payable from a pension into a person’s estate. This change will apply from April 2027. Agricultural property relief and business property relief The government has announced significant reforms of both agricultural property relief and business property relief. From April 2026, the first £1 million of combined agricultural and business assets will be entitled to 100 percent relief from IHT. The change will see the rate of relief reduced to 50 percent for amounts in excess of £1 million. Non-domicile residents The concept of non-domicile residents will be abolished from April 2025. The remittance basis of taxation for non-domiciled individuals is to be replaced with a residence-based regime.

Reacting to today’s Budget, Chartered Accountants Ireland says that small businesses have borne the heaviest burden in the attempt to repair the UK’s finances and the innovative tax policies needed to drive long-term growth and sustainability are not in evidence today. Commenting, Janette Burns, Chair of the Institute’s Northern Ireland Tax Committee noted: “In a rush to repair the funding gap in public finances and keep pre-election promises not to raise tax on working people, the hike in employers’ national insurance contributions (NIC) as well as a rise in the minimum wage means small businesses, many of whom are already struggling, will face increased labour costs. Although some businesses will be partially protected by increased allowances, the 1.2% rise in employer NIC is unlikely to be sustainable for many. “Increasing the rates of CGT was anticipated but the concern remains; a higher rate brings with it the risk of deterring investment and is likely to lead to reduced economic activity across many sectors which could ultimately slow the tax take. “On the business tax side, maintaining the corporation tax rate of 25 percent gives much needed certainty to business leaders. Chartered Accountants Ireland continues to support a reduced rate of corporation tax for businesses operating in and from Northern Ireland and believe that this would raise productivity, increase incomes, and unlock the economic potential in the region.” Gillian Sadlier, Chair of Chartered Accountants Ireland Ulster Society, said: “The extent to which the various measures announced in today’s Budget will lead to real growth across the UK economy remains to be seen. Ultimately, businesses are the drivers of growth and what this Budget has done is increase their overheads. “There were some smaller innovative measures that the government could have announced which would have cost relatively little. For example, we would have liked to have seen an increase in the £90,000 VAT registration threshold to reduce the administrative burden on small businesses and to enable growth. In terms of innovation, a commitment to review the rules around the research and development credit to make it best in class internationally would also have been welcomed.    “The commitment to significantly increase HMRC’s headcount is positive but there must be a definitive drive to improve customer service levels, which have deteriorated in recent years.” ENDS

Institute recognised as one of the 25 most innovative organisations using AI and automation at UiPath AI25 Awards   Award comes as Institute becomes first Professional Accounting Body to roll out full Adaptive Learning for students  Chartered Accountants Ireland has been recognised for its use of robotic process automation (RPA) to enhance the student enrolment experience with an award at the UiPath AI25 Awards. The awards recognise organisations using AI and automation to increase productivity; transform customer experiences; deliver substantial return on investment; and support corporate, environmental, social, and governance (ESG) initiatives.  Chartered Accountants Ireland is the largest professional body on the island of Ireland, representing over 38,400 members and educating 6,600 students. Each year, from June to September, the Institute processes enrolment and exemption applications from over 2,000 students seeking to commence the ACA programme to become a chartered accountant. Chartered Accountants Ireland has the largest share of new student registrations in the Republic of Ireland and is the fastest growing professional accounting body in Ireland and the UK. The Institute’s automation solution has significantly reduced the processing time of applications from weeks at peak times, to only hours. This automation ensures that exemption approvals reach candidate students and their training firms faster than ever before. The award winners were selected by a panel of expert judges.  Ian Browne, Director of Education, Chartered Accountants Ireland said  “We are proud to receive this global recognition from UiPath for our integration of AI and automation into what are complex enrolment and exemption processes. This award demonstrates our continued dedication to delivering innovation and excellence to the accounting profession in Ireland, from the moment that aspiring chartered accountants engage with our team for the first time as student applicants.  “These technologies will continue to play a crucial role in shaping the future of accounting, and the work our members do in every area of the economies on this island and around the world, and we are committed to staying at the forefront of this transformation.” Bobby Patrick, Chief Marketing Officer at UiPath said “We are pleased by the overwhelming quality of AI25 entries we received from customers globally. These 25 companies exemplify the transformational impact of AI and automation, having effectively demonstrated and executed new opportunities to advance innovation and improve productivity.  “We are proud to support customers with their AI and automation journeys as they take full advantage of UiPath's platform to deliver transformational outcomes with fast time-to-value. We look forward to continue leading unprecedented innovation with the next chapter of automation which combines robots, AI agents, and humans.” This application of RPA is just one example of the Institute’s use of technology to reframe the delivery of education and assessment for the next generation of accountants. Seven years ago, Chartered Accountants Ireland commissioned extensive research into the future of the accountancy profession and the needs of employers. A future educational strategy was subsequently agreed.     Chartered Accountants Ireland’s early adoption of online education delivery, drawing on automation and AI as far back as 2019, enabled it to move delivery entirely online in March 2020, with minimum disruption to the student learning experience.  Just this month, the Institute's new learning platform was launched, introducing Adaptive Learning to students for the first time. Chartered Accountants Ireland is the first Professional Accounting Body to roll out full Adaptive Learning modules and one of the first educational institutes across any industry globally. A data-driven, personalised and participative learning journey, Adaptive Learning allows the learner to choose their level of proficiency at the start, and progress according to their assimilation of the material and resulting proficiency.           

In a letter to the Exchequer Secretary to the Treasury, the Institute took the opportunity to highlight a range of tax policy and tax administration recommendations and concerns ahead of next week’s Budget and the 2025 Spending Review. From business taxes to the need to invest in HMRC, the Institute also advocates for a lower rate of corporation tax for Northern Ireland.  The full range of areas covered in the letter are as follows: Business taxation and the need for stability, certainty, and supports for investment, How tax policy can support the transition to net zero, The fuel duty dilemma, The Trader Support Service and the customs intermediaries’ market in Northern Ireland, Potential Budget Day announcements on capital taxes, Investment in HMRC, Making Tax Digital for income tax, Tax simplification and policy making, and A lower rate of corporation tax for Northern Ireland.  

With speculation now reaching fever pitch about potential tax rises, the Labour Party’s first budget in nearly fifteen years is just 10 days away on Wednesday 30 October 2024. The Institute’s Tax Team will be analysing the budget as normal. On the day, we will be issuing a newsletter reporting on key tax announcements. Detailed analysis will follow in Chartered Accountants Tax News on Monday 4 November and subsequent weeks.