Last Tuesday 19 March 2024, HMRC announced a range of permanent changes to helpline services. However, the next day HMRC announced that the changes were being halted while HMRC “considers how best to help taxpayers harness online services”. Whilst the decision to further consider this issue is welcome, it is disappointing that feedback provided by the Institute and other Professional Bodies which raised various concerns about the proposed changes appears to not have been fully considered before the formal announcement was made last week and subsequently reversed. The Institute will engage with HMRC as it considers the way forward. Members are encouraged to provide feedback on HMRC services on a regular basis.

Earlier this month we highlighted in our Spring Budget 2024 coverage that HMRC had finally launched its long planned consultation on “Raising standards in the tax advice market” which examines three options to strengthen the tax agent regulatory framework in the UK and would also require tax advisers to register with HMRC if they wish to interact with HMRC on a client’s behalf. This consultation will close on 29 May 2024. This week we take a look at the first option set out in the consultation for potential regulation of paid tax agents, mandatory membership of a recognised professional body, and encourage you to share your views by Tuesday 7 May 2024 to enable members views to be reflected in the Institute’s  response. Next week will set out more information on option two.  Mandatory membership of a recognised professional body   This option is clearly the option which HMRC are leaning towards, but they recognise that this will depend on “the capacity and willingness” of the Professional Bodies to do so, including this Institute.   Chapter 7 (including questions 11-18) of the consultation examines this option in detail. This would involve mandatory membership of a recognised professional body with professional bodies monitoring and enforcing standards of their members and raising those standards where necessary.   Taking forward this approach would mean tax practitioners must hold membership of a professional body that is recognised as having an adequate minimum standard for its members and an adequate supervisory framework to monitor and enforce that standard.   The government considers this approach to be proportionate to the problems observed and opportunities afforded. In its view it “minimises extra costs and burdens to tax practitioners who currently meet expected standards and most professional bodies currently deliver the 3 components of a regulatory framework: subjecting their tax practitioner members to minimum standards, monitoring and enforcement action; and offering routes for customer support.”   “The government recognises there may be costs for the professional bodies in extending their supervisory frameworks to new members, with the potential for these to be passed on to clients via increased membership fees. The government will explore how best to mitigate this.  The government considers that enhancing and extending the supervisory framework operated by the professional bodies to this population of tax practitioners could achieve its aim of raising standards. However, it is dependent on the willingness and capacity of professional bodies to both strengthen the regulatory framework to raise standards of their current members who do not meet expected standards and extend membership to new members.”  The consultation also presents evidence in Annex C which according to HMRC shows that there are levels of non-compliance amongst taxpayers represented by affiliated tax practitioners. “This is why the government is looking to explore whether the regulatory frameworks currently in place across professional bodies are strong enough to raise standards in the tax advice market if the government chooses to proceed with this approach.  The government therefore wishes to work with professional bodies to understand their capacity and capability to raise standards across the market and seeks views on key questions to inform how mandatory professional body membership could be implemented in a way that best meets the objectives.  Findings from this consultation will inform whether the government pursues the introduction of mandatory professional body membership or whether another approach, such as regulation by a government body (option 3) should be pursued.” 

This week we bring you the latest HMRC performance data to the end of January 2024 and draft legislation has been published for consultation in relation to changes being made to the information businesses will need to provide to HMRC via various returns. HMRC is also warning of bogus tax refund offers and we update you below on R&D tax relief including the intensive tax relief available for businesses in Northern Ireland. And finally, a consultation has been launched seeking views on proposals for the design and administration of the UK carbon border adjustment mechanism which would commence from 1 January 2027.  Draft legislation on additional data  HMRC has launched a technical consultation which is open until 9 May 2024 and relates to two draft Statutory Instruments. The consultation examines the draft legislation which will require businesses to provide additional information to HMRC as follows:- employers will be required to provide more detailed information on employees’ hours via PAYE Real Time Information;  directors will be required to provide the amount of dividend income received from their company separate to other dividend income in addition to their percentage shareholding in the company in their Self-Assessment (“SA”) return; and  self-employed individuals will be required to provide start and end dates of self-employment via their SA return. These changes will take effect from April 2025. Finance Act 2024 introduced powers to enable the collection of this additional data and enabled HMRC to specify, through the two Statutory Instruments, the particular information required within those returns. Feedback on the draft regulation should be sent by email to HMRC at responsivenessdataconsultation@hmrc.gov.uk. Bogus tax refunds  HMRC has issued a Press Release which reports that it responded to almost 210,000 referrals of suspicious contact in the last year, up 14 percent on the previous year. More than 79,000 of these were offering bogus tax rebates. HMRC is therefore warning of a further spate in fraudsters contacting taxpayers after the 2022/23 SA deadline on 31 January 2024.  Taxpayer can help fight phishing scams by reporting any suspicious communications to HMRC:-   forward emails to phishing@hmrc.gov.uk;   report tax scam phone calls to HMRC on GOV.UK;  forward suspicious texts claiming to be from HMRC to 60599.  R&D tax relief update   At Spring Budget 2021, the government launched a review of R&D tax reliefs to ensure the UK remains a competitive location for cutting edge research, the reliefs continue to be fit for purpose and taxpayer money is effectively targeted.   As part of this review, the government announced additional support for R&D intensive SMEs, which will continue alongside the new merged scheme SME and “large” company reliefs announced at the Autumn Statement 2023.  Regulations made earlier this month on 4 March specified that the merged scheme and the amendments to the additional relief for R&D intensive SMEs will commence for companies with accounting periods beginning on or after the 1 April 2024.   As a result, the Financial Secretary to the Treasury laid before the House of Commons the Research and Development (Chapter 2 Relief) Regulations 2024 which introduce changes to the further support for R&D intensive SMEs due to particular market conditions in Northern Ireland.   Under the new rules, eligible companies in Northern Ireland will be able to benefit from relief on subcontracting expenditure undertaken outside the United Kingdom. To protect against the fiscal risk of uncapped overseas expenditure, a cap on the amount of relief that can be claimed will also be introduced, at £250,000 over a rolling three-year period.   The cap will only apply to the amount of intensive scheme relief that is above the amount that could have been claimed under the merged scheme.  Guidance on the new rules is available. Further guidance on the merged scheme R&D expenditure credit and enhanced R&D intensive support is also available. As Finance Act 2024 has received Royal Assent and the relevant Appointed Day Regulations have been made, claims for enhanced R&D intensive support for expenditure incurred on or after 1 April 2023 can now be made.  HMRC also published draft guidance on the new subcontracting and overseas rules for consultation on 9 February. HMRC is currently reviewing responses and will publish final versions of that guidance shorty.  At Spring Budget, the government also announced that HMRC will establish an Expert Advisory Panel to support the administration of the R&D tax reliefs. This panel will support HMRC to develop and update guidance, improve communications, provide insights on the types of R&D occurring across certain sectors and feedback from industry.   Given the broad array of projects and specialisms from the life sciences and tech sector, HMRC will seek representatives from these sectors and will directly reach out to relevant organisations. Further details and the terms of reference will be published in due course. This panel will supplement HMRC’s R&D Communications Forum, which will continue to provide the opportunity for broader discussion and feedback.  

In this week’s EU exit corner, we bring you the latest guidance updates and publications relevant to EU exit. The most recent Trader Support Service and Cabinet Officer Borders bulletins are also available. HMRC also recently published guidance on sending parcels from Great Britain to Northern Ireland which will take effect under the Windsor Framework from 30 September 2024. And finally, we provide information on a recent update to VAT and EORI guidance.  VAT and EORI guidance  If a business deregisters for VAT, any Economic Operators Registration and Identification (“EORI”) number(s) they hold will also be removed at the same time.   By way of reminder, EORIs are needed for authorisations, including a UK Internal Market System (“UKIMS”) authorisation, and licences. To continue using these, there are actions a business needs to take which are as follows:  Authorisations (including Duty Deferment Accounts and guarantees) - contact the supervising office. This can be found in the authorisation correspondence received originally;  Licences - to continue using these please contact the issuing government department; and  If a business still needs an EORI number, they can apply for a new GB EORI number. The number is usually confirmed immediately. Once a business has a GB EORI, they will then be able apply for an XI EORI number, if needed and they meet the relevant criteria. The number will be issued within five working days of applying.  If a business needs help getting a new EORI number, please contact HMRC.   Miscellaneous updated guidance etc.   Recently updated guidance, and publications relevant to EU exit are set out below:-  Classifying footwear for import and export;  Customs Declaration Service is open for all export migration;  Get help using example declarations for exports from Great Britain to the rest of the world;  Making an export declaration using a pre-shipment advice;  Making an export supplementary declaration;  Making an export declaration in your records;  Making a full export declaration;  Tell HMRC when exports have arrived or departed a UK port;  Make and manage an export declaration online;  Get help using example declarations for exports from Great Britain to the rest of the world;  Apply for authorised consignor or consignee status; and  Report a problem using the Customs Declaration Service. 

HMRC’s latest schedule of live and recorded webinars for tax agents is available for booking. Spaces are limited, so take a look now and save your place. HMRC is also running a series of webinars on R&D tax relief.  R&D tax relief webinars  HMRC is running a series of webinars on R&D tax reliefs to aid understanding of what qualifies as R&D, how to claim relief correctly and what the new R&D merged scheme entails.  The webinars series will also cover the enhanced support available for R&D intensives schemes: Register here to learn more about 'Research and Development for tax purposes’;  Register here for more information about ‘How to claim Research and Development tax relief’; and  Visit GOV.UK to watch the recorded webinars and to register for the upcoming webinar session about the R&D merged schemes. 

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.  

Check out the latest items on the Agent Forum. Remember, in order to view each item, you must be signed up and logged in.   All agents, who are a member of a professional body, are invited to join HMRC’s Agent Forum. This dedicated Agent Forum is hosted in a private area within the HMRC’s Online Taxpayer Forum. You can interact with other agents and HMRC experts to discuss topical issues and processes. 

Nóra Cashe explains the obligations, compliance, and acceptance and rejection procedures for employers outlined in the Work Life Balance and Miscellaneous Provisions Act 2023 Code of Practice The Code of Practice (the Code) for the right to request flexible and remote work has been released. Now that these two rights are in effect, employees can request these entitlements. So, do you know your obligations as an employer, and do you understand how to comply with the new legislation? What are the rights to request remote and flexible work? The right to request flexible working and the right to request remote working are the last two of five statutory parts to come into effect within the Work Life Balance and Miscellaneous Provisions Act 2023. While many of the same guidelines apply to these two entitlements, they are separate. ‘Flexible working’ is defined as the adjustment of an employee’s working hours or working patterns. This includes flexible working schedules, reduced working hours, or even remote working. The right to request flexible working only applies to parents and to those acting in loco parentis or guardians as defined by the Act. Meanwhile, ‘remote working’ is an arrangement between employer and employee in which the work is carried out at a location other than at the employer's place of operation. This is done without any change to the employee's ordinary working hours. What is the Code of Practice? Drafted by the Workplace Relations Commission (WRC), the Code provides practical guidance for businesses and their staff regarding flexible or remote work requests. It is separated into three sections. The first two sections are Flexible Working (FW) and Remote Working (RW), which lay out guidelines for employees and employers to follow when requesting or receiving requests for flexible or remote working arrangements. The last section consists of policies and templates. Here, employers can find templates to use for relevant documentation, such as a Work Life Balance Policy, a Flexible Working Request application, and a Remote Working Request application. Staying compliant The Code defines flexible and remote work and provides the details on who can apply and when. The Code also contains important timelines and procedures for employers and employees to follow when a request is made and the consequences for not doing so. Failure to follow the timelines and procedures and to keep records could result in an award of up to 20 weeks of remuneration and/or a costly fine/summary conviction. Additionally, the Code of Practice includes information on situations such as: the abuse of any new working arrangements; the need to modify new working arrangements; and the need for the employee or employer to terminate the new working arrangements. Acceptance or rejection procedures Employers are not obligated to accept requests for remote or flexible work but it’s important to remember that a response must be delivered to the employee in writing within four weeks of their request. The three responses an employer can give are: Extension: the employer may request up to four more weeks to consider its decision, which it must also do in writing. Refusal: the employer must lay out its reasoning in writing. Acceptance: the employer must produce a written document with the relevant details for the employee to sign. Overall, employers are advised to weigh their employees’ circumstances and rationale for these requests against their own business needs. In addition, the Code provides tangible questions that employers may ask themselves when deciding whether to approve or reject a request. Nóra Cashe is a Litigation Manager at Peninsula

The new EU Directive NIS2 requires meticulous compliance strategies to improve cybersecurity resilience, explains Puneet Kukreja The intense uptake of digital solutions and innovative technologies over the past four years has changed the way we socialise, work, shop, bank, and receive necessary services, such as health. As sectors and services increasingly become interconnected and interdependent, the cybersecurity threat landscape continues to grow in sophistication and focus. Safeguarding critical infrastructures and services is paramount to protecting society and economies from these actors. In response, EU lawmakers have introduced several interconnected EU-wide laws to improve the digital and operational resilience of the sectors and services we rely on most. The second Network and Information Systems Directive (Directive (EU) 2022/2555 (NIS2)) is one of these EU-wide laws. It comes into effect on 18 October 2024 and will have a compliance impact on many public and private sector organisations across 18 sectors, similar to that experienced under the GDPR. The regulatory supervision and enforcement measures under NIS2 bear similarities to the GDPR. However, direct accountability and liability for upper management and possible suspension of CEO duties brings this squarely into the board room. NIS2 is an evolution from its predecessor, NIS-D (Directive (EU) 2016/1148), extending the legislative scope to capture entities in several additional sectors and subsectors, including public bodies and a wider range of digital service providers, as well as covered entities’ information and communications technology (ICT) supply chains. NIS2 sets out the minimum powers of supervision and enforcement that Member State competent authorities must have. Administrative fines can be imposed on essential and important entities for breaches of obligations relating to cybersecurity risk management measures and incident notification. For ‘essential entities’, the maximum fine is at least €10,000,000 or at least 2 percent of the total worldwide annual turnover in the previous financial year, whichever is higher. For ‘important entities,’ these figures are €7,000,000 and 1.4 percent. Irish legislation must be enacted before 18 October 2024 to transpose NIS2. Consistent with its treatment of NIS-D, the transposing legislation will provide that breaches of certain provisions of the same will be a criminal offence. We expect that a person found guilty of any of these offences will be liable on conviction to a fine and/or imprisonment. It is vital that CEOs, CFOs, CIOs, CISOs and board members understand not only the financial, personal, and reputational consequences of non-compliance – which underscores the urgency of pursuing NIS2 compliance now – but also the role that NIS2 will play in safeguarding their organisation’s cybersecurity and operational resilience. Navigating NIS2 There are several steps an organisation can take to navigate the NIS2. 1. Legal analysis Assess whether NIS2 applies to your organisation or whether any of the statutory exemptions will apply. To the extent NIS2 applies, it will be necessary to understand its requirements, including any cross-border implications and the steps necessary to secure ICT supply chains. 2. Strategic planning of compliance navigation Identify cybersecurity risks and set clear targets to assist in allocating resources and creating strong governance for resilience and regulatory adherence. This will also ensure operational integrity and informed decision-making. 3. Technology procurement Align chosen technologies with organisation needs and regulatory requirements. 4. Implementation strategy Develop a robust plan covering technology integration, employee training, and monitoring mechanisms. 5. Technology implementation Explore partnerships with organisations experienced in technology transformation. This will help you enable the full lifecycle of capability from analysis to managed services. 6. Employee training and awareness Champion comprehensive training programmes to instil a culture of cybersecurity within the organisation. 7. Managed services for continuous compliance Explore partnerships with experienced service providers for ongoing monitoring and response capabilities. 8. Budgeting and resource allocation Collaborate on budgeting to align finance planning with strategic cybersecurity objectives. 9. Documentation and reporting Oversee the creation of comprehensive documentation, ensuring transparency and accountability. Your NIS2 journey Organisations will differ in their level of compliance or maturity across the key control areas that are required under NIS2. However, one thing is certain: all in-scope organisations should now consider the implications of NIS2 to ensure they have sufficient time to assess, design, and implement their compliance plans before the legislation comes into effect. Organisations operating in the sectors defined in NIS2 will need to assess whether they fall within its scope, the availability of any exemptions, their categorisation as ‘essential’ or ‘important’, their NIS2 obligations, and the impact of and interplay with other EU cybersecurity and operational resilience laws. NIS2 requires organisations to address cybersecurity risks in their own ICT supply chains. In practice, this will require a risk-based assessment of ICT supplier relationships, enhancing contracts and securing inspection and other rights to ensure supply chain security. Early supplier engagement will be essential. To the extent certain in-scope organisations are established and/or providing their services in more than one EU Member State, they may be subject to implementing laws in more than one jurisdiction or the EU Member State where their cybersecurity risk management decisions are predominately made. The NIS2 jurisdiction rules require careful consideration and may cause certain entities to rethink the geographic positioning of cybersecurity decision-making. To successfully achieve and sustain NIS2 compliance, an organisation must commit to continuous improvement as well as the adoption of proactive measures. Both are key in this evolving digital landscape. Beginning a compliance journey with a legal analysis of the new directive will ensure you start on the right path and your organisation not only avoids substantial financial penalties but also becomes more resilient to evolving cyber threats. Puneet Kukreja is Cyber Security Leader at EY

The EU Accessibility Act sets out to improve accessibility standards. Adela Buliman outlines what organisations need to consider before it comes into effect The European Accessibility Act (EAA) represents a significant step forward in making the European Union more accessible to all people, including people with disabilities. The legislation comes into effect on 28 June 2025. There are many industries in scope, including both the public and private sector. The EAA is extending the reach of the existing Public Sector Accessibility Regulations under the EU Web Accessibility Directive. Under current regulations, any organisation that is at least 50 percent funded by the state has to have a digitally accessible website, mobile app and digital documents, where relevant. The EAA is expanding this. Scope of legislation The EAA is much broader in scope than the public sector regulations. The products covered by the Act include: ATMs Ticket and travel check-in machines Self-service terminals Mobile phones Computers, terminals and operating systems E-reading devices The services covered include: Audio-visual media services Transportation services Banking services Electronic communications services E-books E-commerce The services covered are much broader than it may seem. For instance, when it comes to banking services, it is not just the digital assets that are in scope, but anything a user is required to interact with to use a service. So, a letter that the bank may send you with your card pin must have a digitally accessible alternative. As well as this, when you look at the definition of “e-commerce” under the legislation, it is not just for retail companies, it is any organisation that either sells a product or service on a website or advertises that product or service online. For example, the organisation may be in the insurance sector, but if it advertises its insurance plans online, it would be within the scope of this legislation too. Taking all this into account, there are very few organisations that are not in scope of this legislation. Regulators Surveillance authorities have been assigned to each in-scope industry. The Competition and Consumer Protection Commission (CCPC) is the regulator for each product that is in scope. For services, the following bodies are regulating: Industry Regulator Electronic Communications Commission for Communications Regulation Audiovisual media Coimisiún na Meán Air passenger transport Irish Aviation Authority Bus, rail and waterborne passenger transport National Transport Authority Consumer banking Central Bank of Ireland E-books and dedicated software and e-commerce Competition and Consumer Protection Commission (CPCC) Emergency communications Commission for Communications Regulation   Ramifications for non-compliance It is important to note the consequences of non-compliance with the EAA: A fine (€5,000) or imprisonment of up to six months or both; A fine of up to €60,000 or imprisonment of up to 18 months or both; or Litigation The one that poses the most risk to organisations is litigation. Under the EAA, users will be allowed to litigate against companies that they feel are discriminating against them. Next steps for organisations When it comes to getting ready for the legislation, there are three steps that we recommend: Auditing An audit is a great way to start your journey. An audit will provide you with an issue log of items that need to be fixed to be accessible and compliant. Upskilling Upskilling your own staff is an important second step in preparing for the EAA. When you receive audit results, there will be a large amount of repetition in the types of issues found, highlighting a knowledge gap that you can fill by training staff. Embedding The last step is embedding accessibility into your company culture. It can be up to 30 times more expensive to retroactively make something accessible. Embedding the accessibility into your procurement process, design process, sprints, etc., allows you to keep costs low and create a long-term accessibility plan. Adela Buliman is the Head of Accessibility at Vially and sits on the European Committee for Standardisations, in particular committees relating to the European Accessibility Act and Public Sector Accessibility Regulations

The Economic Crime and Corporate Transparency Act (ECCTA) received Royal Assent on 26 October 2023, and the provisions of the Act are starting to be applied. We have prepared an information booklet entitled The Economic Crime and Corporate Transparency Act 2023 – Changes in Companies House outlining the first set of changes introduced by Companies House on 4 March 2024.  These include: 1. new rules for registered office addresses; 2. a requirement for all companies to supply a registered email address; and 3. new lawful purpose statements The Act gives Companies House, along with the Registrar of Companies for Scotland and the Registrar of Companies for Northern Ireland, the power to play a more significant role in tackling economic crime and supporting economic growth. Over time, its measures will lead to improved transparency and more accurate and trusted information on its registers.  These changes will apply to incorporated entities, limited partnerships and limited liability partnerships. They will also apply to their members and directors. 

The International Accounting Standards Board (IASB) has proposed changes to IFRS 3 Business Combinations and IAS 36 Impairment of Assets in its recently released Exposure Draft. The objective of the proposed changes are to improve the information that companies provide to investors about company acquisitions. This improved information is then intended to help investors to assess decisions to make acquisitions and the performance of acquisitions. The proposals to amend IFRS 3 and IAS 36 are intended to require companies to disclose better information about their acquisitions and to make targeted changes to the impairment test. The exposure draft remains open to public comment until 15 July 2024.

As reported last week, at the most recent meeting of the TALC Indirect Taxes Sub-Committee, officials from Revenue’s National Business Tax Registration Unit gave a presentation on VAT registrations. Revenue has kindly agreed to share the slides from that presentation and you can find them here. The presentation includes useful information on the screening of VAT applications, reasons for disallowed VAT applications, information to include on a VAT application, information on ‘intention to trade’ applications, as well as information on EU and customs applications.

The latest data on taxation trends in the EU indicates that nominal tax revenues collected by EU member states reached a record value in 2022, totalling €6.388 billion (an 8 percent increase on 2021). The data also indicates that the average tax burden (measured by taking the total tax revenues received as a percentage of GDP) decreased slightly in 2022. The average tax burden in the EU is 40.2 percent, with Ireland’s tax-to-GDP ratio for 2022 being the lowest at 20.9 percent.

The European Commission has commenced a targeted feedback campaign to provide stakeholders with the opportunity to give their views on the EU’s framework for resolving cross-border tax disputes in relation to double taxation issues. The DRM (Directive on Tax Dispute Resolution Mechanisms) came into force on 1 July 2019 and introduced further rules and more stringent deadlines to resolve cross-border tax disputes. In accordance with Article 21 of that Directive, the Commission is now conducting a review and preparing a report on its functioning, with a focus on the Directive’s implementation in its first years.

Earlier today HMRC announced that a series of new and significant permanent changes will take effect on a range of its helplines from 8 April 2024. The announcement comes after previous restrictions to various helplines which first began in December 2022 and continued at various times in 2023 and into the early part of 2024. Members with specific queries are asked to contact us to discuss. The Institute are concerned about these changes, will be monitoring their impact, and welcomes your feedback at any time on HMRC services.  In summary, the changes are:  between 8 April 2024 and 30 September 2024, the Self-Assessment (“SA”) helpline will be closed – callers will instead be directed to use HMRC’s online services;  between 1 October 2024 and 31 March 2025 the SA helpline will be open “to deal with priority queries” – however callers with queries that can be “quickly and easily resolved online will be directed to HMRC’s online services”;  the VAT helpline will only be open for 5 days every month ahead of the deadline for filing VAT returns – outside of this time, callers will be directed to use HMRC’s online services; and  the PAYE helpline will no longer take calls about refunds – callers will be directed to use HMRC’s online services.  HMRC advisers will continue to be available during normal office opening hours to support those who cannot use online services or who have health or personal circumstances that mean they need extra support. HMRC has published a help card on how to access extra support. HMRC advisers will continue to be available during normal office opening hours to support those who cannot use online services or who have health or personal circumstances that mean they need extra support. HMRC has published a help card on how to access extra support. All other helplines will continue to operate as they do currently. At HMRC’s recent Annual Stakeholder Conference attendees heard from HMRC’s Chief Executive Jim Harra about “tough choices about resources” and how HMRC is forging ahead with plans to reduce traditional phone and post contact by moving more taxpayers to “self-serve online”. Mr Harra also confirmed that HMRC’s headcount will significantly reduce in 2024/25.  HMRC has also published an impact assessment in respect of the closures of the PAYE repayment helpline and the VAT helpline in 2023: -  PAYE repayment telephony lines closure  VAT lines telephony lines closure   

We recently issued a reminder that second hand vehicles moved from Great Britain (“GB”) to Northern Ireland (“NI”) prior to 1 May 2023 can continue to avail of the VAT margin scheme, but only until the extended deadline of 30 April 2024. HMRC has requested details of any such vehicles still in stock and unsold. Please contact us to provide this information by Friday 22 March 2024. Our thanks go to anyone who has already been in touch to provide this information.  The 30 April 2024 deadline means that any vehicles moved from GB to NI prior to 1 May 2023 but sold after 30 April 2024 will require output VAT to be charged on the full selling price, and not on the margin.   The six-month extension from the original deadline of 31 October 2023 followed extensive lobbying from Chartered Accountants Ireland in September and October 2023.

Last week saw the publication of the Spring Finance Bill 2024 (official title Finance (No. 2) Bill 2023-24). The Bill reflects many of the tax measures recently announced as part of the Spring Budget 2024. First reading of the Bill took place last week in the House of Commons. No date has yet been set for second reading.  The National Insurance Contributions (Reduction in Rates) (No. 2) Bill has also been introduced to Parliament. This Bill provides for the reductions in both Class 4 and Class 1 employee National Insurance Contributions as announced earlier in the month as part of the Spring Budget 2024.  

This week we bring you the latest list of employers, as published by the UK Government, for failing to pay the national minimum wage and the Public Accounts Committee has published its report into HMRC performance. HM Treasury has also confirmed that post office compensation payments will be tax free for overturned convictions and HMRC has set out the evidence which will be needed from 1 April 2024 when making a claim for a creative sector tax relief.  National minimum wage  Over 500 employers have been named in the UK Government’s annual report for failure to pay National Minimum Wage. The NMW is enforced in the UK by HMRC. Employers were ordered to repay workers nearly £16 million, plus an additional financial penalty, after breaches left over 172,000 workers out of pocket. The report also features a reminder that NMW is set to increase from 1 April 2024 as announced in the November 2023 Autumn Statement.  Report into HMRC performance  The Public Accounts Committee has published its report into HMRC performance in 2022-23. The report’s accompanying Press Release is titled “‘All-time low’: HMRC customer service deteriorates amid taxpayers’ exasperation” and says that HMRC is appearing to struggle to cope as taxpayer population and tax complexity rise. Although there has been a significant drop in criminal prosecutions, according to the report this sends the wrong message. The approach to IR35 rules is also deterring legitimate economic activity. Chartered Accountants Ireland regularly discusses HMRC performance at various forum meetings and welcomes your feedback at any time by email.  Post office compensation payments  In a written statement made to Parliament last week, the Financial Secretary to the Treasury Nigel Huddleston has confirmed that no income tax, capital gains tax, national insurance contributions, corporation tax or inheritance tax will be payable on compensation for postmasters whose convictions are overturned by upcoming legislation or those who receive the £75,000 fixed sum payment from the Horizon Shortfall Scheme. The Government will legislate via secondary legislation to exempt these payments in due course.  Guidance on creative sector claims  From 1 April 2024, a company claiming a creative industry tax relief will be required to provide supporting evidence for its claim. HMRC has now updated the relevant guidance to provide details of the supporting evidence required in order to make a valid claim for creative industry tax relief. If this mandatory information is not provided, HMRC will be able to amend the company’s tax return to remove the claim. 

In this week’s EU exit corner, we bring you the latest guidance updates and publications relevant to EU exit. The most recent Trader Support Service bulletin is also available. We issue a reminder about the move of export declarations to the Customs Declarations Service (“CDS”) the deadline for which has now been extended and, from 1 March 2024, the EU has introduced a new digital system for union goods. News of how changes to the CDS which take effect from 24 March 2024 impact on goods moving into Northern Ireland also features.  Move to CDS for all export declarations delayed to June 2024  HMRC had previously announced that from 30 March 2024 all export declarations must be made using the CDS and not CHIEF. Recently HMRC issued a Press Release confirming that all businesses can now move their export declarations to the CDS. However, instead of requiring the CDS to be used for all exports from 30 March 2024, businesses who have yet to move their export declarations to CDS will have a transition period to move across until 4 June 2024. After this date, customs declarations will not be able to be submitted through the CHIEF service.   More information about moving to the Customs Declaration Service is available on GOV.UK. HMRC says that it will continue to provide help and support to businesses moving to CDS in the coming months and will continue to work closely with the border industry throughout this process.  Digital proof of status for EU goods  From 1 March 2024, the EU has introduced a new digital system for union goods (products made in the EU or imported with duties paid). Union goods avoid EU customs procedures but require digital “Proof of Union Status” when moving them between EU countries and Northern Ireland via a non-EU territory.   To use the new system, traders should email admin.uum@hmrc.gov.uk with their name, email, registration confirmation, NI business address, and XI EORI number. More information is available in a recent Agent Update.  Impact of CDS changes on goods moving into Northern Ireland  From 24 March 2024, HMRC changes to the CDS will affect how you make declarations into Northern Ireland. After this date, to use your UKIMS authorisation, you (or your agent or intermediary) will need to start using some new codes and your UK Internal Market Scheme authorisation (“UKIMS”) authorisation number.   These changes will apply to goods moving into Northern Ireland from Great Britain (GB-NI) and to goods moving into Northern Ireland from a country outside of both the UK and the EU (Rest of World-NI).  If you (or your agent or intermediary) have been using the ‘NIREM’ code to declare goods ‘not at risk’, you could be impacted by these changes if you haven’t already got a UKIMS authorisation. From 24 March 2024, if you use the ‘NIREM’ code without declaring a valid UKIMS authorisation, duties at the EU rate will be calculated and will be charged to you by CDS if duties are due.  Note that there will be additional considerations if you are:- moving goods that will be subject to processing in Northern Ireland;  moving goods subject to tariff-rate quotas, such as steel; or  seeking to waive duties under the customs duty waiver scheme.  Further guidance on these changes will be published on GOV.UK from 24 March 2024. In the meantime, HMRC has advised us that letters are being sent to affected traders to notify them in advance.  Miscellaneous updated guidance etc.   Recently updated guidance, and publications relevant to EU exit are set out below:-  Reference documents for The Customs (Reliefs from a Liability to Import Duty and Miscellaneous Amendments) (EU Exit) Regulations 2020;  Import, export and customs for businesses: detailed information;  Simplified Customs Declaration Process: notification of non monetary amendment;  Change or cancel a Simplified Frontier Declaration;  Moving qualifying goods from Northern Ireland to the rest of the UK;  Trading and moving goods in and out of Northern Ireland;  Search the register of customs agents and fast parcel operators; and  Customs Declaration Service.