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. 

Background The Department of Children, Equality, Disability, Integration and Youth (the Department) has recently issued a document1 “Guidance Note for Core Funding Reporting Requirements Transitional Arrangements Year 1 and 2” (“the Department Guidance Note”) to entities providing childcare and early education services regarding the transitional arrangements for the application for funding under a new funding model called ‘Together for Better’.  These transitional arrangements will be in place for the next two reporting periods (years ended 31 August 2023 and 31 August 2024). Reporting regime This reporting regime includes a requirement that the childcare service providers (“client”) engage a professional accountant to submit a document called an ‘Income and Expenditure Template. CCAB-I have made the Department aware of the potential cost implications for an accountant providing this service to their client.  The following matters should be noted: The report is to cover expenses incurred on a cash basis for the year ended 31 August. The requirement is for expenditure incurred in the relevant period only, no accruals or prepayments. Income will be pre-populated in the online platform. Where your client has a different year end, time apportionment is not permitted. Important considerations for CCAB-I members CCAB-I has engaged with the Department over a number of months to discuss the nature and extent of work expected and the respective responsibilities of the client and the professional accountant and, in particular, the concerns regarding the request for the professional accountant to submit the report (as set out in the Department Guidance Note) on behalf of a client. There was positive engagement and much, but not all, of the feedback by CCAB-I on the process was reflected and incorporated into the final guidance. However, given the type of engagement, CCAB-I are making members aware of the potential issues and extant guidance which our members may consult. The Department Guidance Note sets out the responsibility for the data included in the report. See section 2 of the Guidance Note: “The Service Provider is responsible for fully complying with all financial transparency requirements in accordance with their Core Funding contractual obligations. The accountant relies on information provided by the Service Provider, who is responsible for disclosing all relevant information.” The Service Provider/client will make an online declaration on the platform provided by the Department that they have authorised a professional accountant2 to make the submission for them.  CCAB-I members are reminded of the relevant Code of Ethics issued by their professional body.  Independence The Department Guidance Note3 defines an accountant as someone who: "(a) has been admitted as, and is, a member of a prescriber accountancy body, (b) is currently practicing in the profession of accountant, (c) is not and never has been a principal officer or employee, or an owner or part owner, of the licensee in respect of whom he or she is preparing an accountant’s report, and (d) is maintaining such minimum level of professional indemnity insurance as is required by the prescribed accountancy body concerned." .Members should be cognisant of any conflicts with other engagements they may undertake for their clients.  When you are the Auditor  Where the accountant is the statutory auditor the Ethical Standard for Auditors (Ireland)4 applies and Section 5.129 prohibits the audit firm providing accounting services where the services would involve the firm undertaking part of the role of management or initiating transactions.  "S 1.24           In the case of a statutory audit, non-audit services shall not be provided that involve playing any part in management decision-taking of an entity relevant to an engagement. The firm shall not accept any engagement which includes the provision of services where it is probable that an objective, reasonable and informed third party would conclude that the firm or a covered person was playing a part in management decision-taking.  5.128          The provision of accounting services by the firm to an entity relevant to an engagement creates threats to the integrity, objectivity and independence of the firm and covered persons, principally self-review and management threats, the significance of which depends on the nature and extent of the accounting services in question and the level of public interest in the entity. 5.129            The firm shall not provide accounting services to an entity relevant to an engagement where: (a) the entity is a listed entity, relevant to an engagement by the firm, or a significant affiliate of such an entity; or (b) for any other entity: those accounting services would involve the firm undertaking part of the role of management, or initiating transactions; or the services are anything other than of a routine or mechanical nature, requiring little or no professional judgment.” When you are not the Auditor We recommend that members read the Department Guidance Note1 and that an appropriate letter of engagement and representation letter are in place where they undertake these engagements.  Members should refer to guidance documents issued by Chartered Accountants Ireland.  TA 06/2023 Grant Claims5 and the International Standard on Related Service ISRS 4400 (Revised) Agreed-Upon Procedures Engagements6 which give guidance on engagement acceptance and continuance and some general advice on agreeing the terms of engagement.  1 https://earlyyearshive.ncs.gov.ie/downloads/download-corefunding/   2 A professional accountant is defined as a member of a Prescribed Accountancy Body that comes within the supervisory remit of IAASA, •              Chartered Accountants Ireland. (CAI) •              Association of Chartered Certified Accountants (ACCA) •              CPA Ireland (CPA) •              Chartered Institute of Management Accountants (CIMA)  3 See Section of Guidance Note for Core Funding Reporting Requirements Transitional Arrangements Year 1 and 2. 4 https://iaasa.ie/wp-content/uploads/docs/media/IAASA/Documents/audit-standards/Ethical-Standard-Consultation/Ethical_Standard_Nov_2020_updated_June_3.pdf 5 https://www.charteredaccountants.ie/chariot/account/ta/TA06_2023.html 6 https://www.iaasb.org/publications/international-standard-related-services-isrs-4400-revised  

President Sinead Donovan, Deputy President Barry Doyle and Vice President Pamela McCreedy held a series of engagements this week in New York and Washington DC, with members and key stakeholders. With St Patrick’s Day approaching, this time of year provides an invaluable opportunity for the Institute to represent members and the interests of the profession at the highest levels with policy makers and business leaders from across the island of Ireland and the United States.     Against the backdrop of a new global minimum corporation tax rate from 2024, and stiff competition for investment, chartered accountants will continue to play a key role on both sides of the Atlantic driving and servicing the well-established, mutually beneficial two-way flow of investment for Ireland’s economies North and South. As part of that, at the Ireland Inc event, the Institute’s officers had the opportunity to brief US Special Envoy for Northern Ireland Joe Kennedy on the contribution of the profession and our commitment to supporting continued investment and prosperity.    The team also took the opportunity to discuss future collaboration with colleagues in our professional network, with whom strong and enduring relationships have been built over many years, including the International Federation of Accountants (IFAC), AICPA, and Chartered Accountants Worldwide (CAW). Topics discussed included the enhancement of mutual recognition of qualifications and the need to continue work to position members to lead on sustainability reporting. This collective voice is invaluable in continuing to help our profession to grow and further develop meaningful economic and societal impact.    The US remains a destination of choice for Irish ACAs and the officer group hosted a networking event at the Consulate General of Ireland, New York together with Deputy Consul General, Gareth Hargadon. Over 100 members and business leaders gathered: many thanks to Gareth and his team for their hospitality, and Gareth’s remarks on the important contribution of Ireland’s chartered accountants locally.   The insights gleaned on the trip will be put into action in the coming weeks and months, and we will update members further.    

Welcome to the latest edition of Technical Roundup. In developments since the last edition, the Financial Conduct Authority in the UK recently issued a ‘Dear CEO’ letter detailing action needed in response to common control failings identified in anti-money laundering frameworks. The International Accounting Standards Board published its Exposure Draft Business Combinations-Disclosures, Goodwill and Impairment on 14 March 2024. The ED is open for public comment until 15 July 2024. Read more on these and other developments that may be of interest to members below. Financial Reporting EFRAG (the European Financial Reporting Advisory Group) has issued its February 2024 update. This summarises public technical discussions held and decisions taken in the month. The International Accounting Standards Board (IASB) has issued a call for fieldwork participants to explore the potential effects of the tentative agenda decisions. These tentative decisions relate to the entities who would be subject to the expected credit loss model arising from proposed changes to the IFRS for SMEs Accounting Standard. The IASB has published its next Exposure Draft Business Combinations-Disclosures, Goodwill and Impairment on 14 March 2024. This is open for public comment until 15 July 2024. The IFRS Foundation has issued its February 2024 monthly news summary, which covers news and events over the past month. Following the publication of the revised UK Corporate Governance Code earlier this year the FRC updated the guidance and for those stakeholders who wish to download or print copies of the guidance in full starting from 6 March 2024, any future updates will be made on the first Wednesday of the month. A link to the updates log is on the UK Corporate Governance page on the FRC website. The Pre-Emption Group (PEG) arm of the Financial Reporting Council has published its first report monitoring the use of its updated Statement of Principles on the disapplication of pre-emption rights for UK listed companies which give existing shareholders rights of a company priority to participate in future share issues thereby protecting their ownership stakes. Auditing IAASA has published its 2023 quality assurance review reports in respect of seven firms that perform statutory audits of public-interest entities (PIEs) in Ireland. The reports summarise IAASA’s inspection of each firm’s implementation of the International Standard on Quality Management (Ireland) 1 (ISQM 1) which was effective for the first time during this period. IAASA undertook 31 (2022: 35) inspections of audit files, 24 were graded as good audits, (2022: 31) 7 required improvements, (2022: 4) No audit files inspected required significant improvement. The 2023 reports can be accessed here. Anti–money laundering and sanctions The Financial Conduct Authority (FCA) in the UK recently issued a ‘Dear CEO’ letter detailing action needed in response to common control failings identified in anti-money laundering frameworks. The letter was issued to “Annex 1 Financial Institutions “. These entities carry out activities such as financial leasing and providing payment services. Click here for full details of Annex 1 activities. The letter listed common control failings including for example lack of resources for financial crime and inadequate training. Readers can click here for full details of the dear CEO letter. Sustainability EFRAG has announced the addition of three new entities to the “Friends of EFRAG – Sustainability Reporting” community. Greenomy, osapiens and SISB have joined the group, demonstrating their commitment to sustainability reporting and supporting EFRAG’s mission. Accountancy Europe has issued its March Sustainability Update. Central Bank of Ireland The Central Bank of Ireland (CBI) is conducting a comprehensive review of the Consumer Protection Code 2012 (the Code). It has launched its Consultation Paper which is an opportunity for stakeholders to provide feedback on how CBI is proposing to update the Code. The purpose of the review is to deliver an updated and modernised Consumer Protection Code which is centred around firms securing customers’ interests which CBI says is the key to delivering positive consumer outcomes. You can read more about the review here and the consultation paper here. The consultation is open for feedback for three months until 7 June 2024.  CBI will then consider submissions received and publish the final revised Code in 2025 alongside a feedback statement. CBI also recently launched its first quarterly bulletin of 2024 which you can read here. The Governor of the Central Bank wrote to the Minister for Finance in January 2024 outlining his financial regulation priorities for 2024 and readers can access the letter here. Readers may also find some of the topics in CBI Regulatory & Supervisory Outlook 2024 published recently of interest. The outlook gives an overview of risk themes and risk areas including climate and other environmental –related risks and financial crime risks. It outlines supervisory priorities and under the heading “legal and regulatory” provides a summary of key regulatory initiatives for 2024.It considers various sectors including the credit union sector and the insurance and re-insurance sector. There is also a section on a supervisory perspective on artificial intelligence and a spotlight on financial crime. Other news The Charities Regulator reported in its recent newsletter that it has removed four charities from the Register of Charities for failing to file an annual report despite being required by law to do so. The Regulator also initiated prosecution actions against a further eight charities that have failed to file at least one annual report with the Regulator. These organisations are among over 1,700 charities contacted by the Charities Regulator in a targeted compliance programme to improve compliance with annual reporting obligations. Please click here to read the full article in the Charities Regulators newsletter. Minister for Enterprise Trade and Employment, Simon Coveney TD, has launched Powering Prosperity – Ireland’s Offshore Wind Industrial Strategy.  The strategy’s vision is to build a vibrant and impactful new offshore wind energy (OWE) sector by the end of this decade and hopes to create up to 5,000 jobs in this area. The Business Law Committee of the Law Society has published an in-depth article on revised Central Bank of Ireland (CBI) Administrative Sanctions Procedure (ASP) Guidelines. The FRC has updated the guidance on the revised UK Corporate Governance Code. It is now a live document containing links to relevant publications and this will allow it to be reviewed to ensure it remains accurate and up-to-date. As we approach the European Parliament elections, which are due to take place across Europe in June, Accountancy Europe have announced an upcoming campaign which intends to promote these elections. The first event entitled “Democracy in action: Discussing Inflation and the Sustainability Agenda” will take place on April 16. The Financial Conduct Authority (FCA) has announced that it will investigate the use of personal guarantees in certain UK entities. An Garda Síochána, Garda National Cyber Crime Bureau (AGS) has recently produced a booklet Cybercrime Risks and Prevention Tips which it says aims to enhance awareness of this type of crime as AGS sees more people using the online world as their primary means of interacting. Minister for Enterprise, Trade and Employment, Simon Coveney TD, and Minister for Children, Equality, Disability, Integration and Youth, Roderic O’Gorman TD, have brought the right to request remote working arrangements for all employees and the right to request flexible working arrangements for parents and carers into operation. They have also approved and published the Code of Practice for Employers and Employees Right to Request Flexible Working and Right to Request Remote Working. For further technical information and updates please visit the Technical Hub on the Institute website.      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.  

The Money Laundering and Terrorist Financing (Amendment) Regulations 2023 came into force on 10 January 2024. The legislation now provides that a domestic politically exposed person (PEP) has a lower starting point for risk than a non-domestic PEP (foreign PEP) and if no enhanced risk factors are present, the extent of customer due diligence for a domestic PEP should be lower than a foreign PEP.

New Information Sharing Measures within the Economic Crime and Corporate Transparency (ECCT) Act (section 188-193) came into force, as of the 15th of January 2024.    These new measures will make it easier for relevant businesses to share customer information with each other for the purposes of preventing, investigating, and detecting economic crime by disapplying civil liability including for breaches of confidentiality where information is shared for this purpose.    The UK Government is currently developing guidance to assist firms and promote a consistent approach. We will share this guidance as soon as available. 

The Institute features in the Irish Government’s Finance strategy to further establish Ireland as the recognised global location of choice for international financial services. The 2024 Action Plan, published last Friday, 8 March 2024, details various key measures to realise this ambition, in collaboration with public and private sector stakeholders. Contributing to the development of the plan the Institute, as a stakeholder, highlighted our focus on developing skills and awareness across all key pillars of sustainable finance, including governance, reporting, assurance, and regulation. Commenting, Head of Ethics and Governance, Níall Fitzgerald referred to a range of activities the Institute is also engaged in that further supports the plan’s objectives including advocacy (e.g. consultations and representations to regulators and standard setters), member engagement, and external collaborations such as Chapter Zero Ireland, Accounting 4 Sustainability and Chartered Accountants Worldwide. A copy of the Institute’s submission is available here

HM Treasury has published a consultation on improving the effectiveness of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (the ‘MLRs’). HM Treasury committed to consulting on changes to the MLRs as part of a wider programme of work aimed at reducing money laundering, which was set out in the Economic Crime Plan 2023-26. The consultation covers four core themes: Making customer due diligence more proportionate and effective Strengthening system coordination Providing clarity on scope of the MLRs Reforming registration requirements for the Trust Registration Service. The Professional Standards Department will be submitting a response.

Our colleagues in Advocacy & Voice have published a short guide on the UK’s Economic Crime and Corporate Transparency Act 2023.The guide details some of the changes which will be brought about by the Act. We will be providing further updates as the various sections within the Act come into force.

The National Crime Agency has issued a new Amber Alert which highlights the sanctions evasion and money laundering risks presented to UK industries linked to the art storage sector, and to serve as a reminder on due diligence checks and reporting obligations. This Alert focuses on UK artwork storage facilities, the UK specialist service providers that are linked to the art storage sector and the clients that utilise these art storage facilities.

The National Crime Agency has issued a new Red Alert providing information on the common techniques sanctioned individuals and entities, and their enablers, are suspected to be using to evade sanctions relating to gold.

The first increase in seven years to the VAT registration threshold, further enhancements to the various creative sector reliefs and the inclusion of leased assets in the full expensing regime (when fiscal conditions allow) were the key business taxes announcements. HMRC has published updated guidance around the tax deductibility of training costs for sole traders and the self-employed. And the government is also extending the Energy Profits Levy by an additional year to March 2029, which should raise £1.5 billion. HMRC are also to establish an expert panel to assist in the administration of R&D tax reliefs. In a meeting on Budget Day with HMRC, Chartered Accountants Ireland requested more details on this and was advised that this will be provided in due course. VAT thresholds From 1 April 2024, the current £85,000 VAT registration threshold will increase to £90,000, the first increase since April 2017. The Chancellor’s aim here is to ensure that the UK continues to have one of the highest thresholds in the OECD. According to the main budget publication, over 28,000 businesses will benefit in 2024/25 from no longer being VAT registered. The de-registration threshold will also increase from £83,000 to £88,000 from 1 April 2024. Full expensing to be extended to leased assets Full expensing for companies was made permanent in the Autumn Statement 2023. These capital allowances are currently only available to companies incurring expenditure on new plant and machinery (with some exclusions). The Chancellor announced today that full expensing will be extended to leasing when fiscal conditions allow. Draft legislation on this extension will be published shortly. Creative sector tax reliefs A UK independent film tax credit will be introduced at a rate of 53 percent on qualifying film production expenditure. This enhanced audio-visual expenditure credit will be available for films with budgets under £15 million that meet the requirements of a new British Film Institute test. Productions will be able to make claims from 1 April 2025, in respect of expenditure incurred from 1 April 2024 onwards provided that films started principal photography from 1 April 2024. Following a call for evidence at Autumn Statement 2023, the credit rate for visual effects costs in film and high-end TV will be increased to 39 percent from April 2025, and the 80 percent cap will be removed for qualifying expenditure for visual effects costs. The government will also consult on the types of expenditure that will be in scope for the additional tax relief which will be implemented via a future Finance Bill. And finally, from 1 April 2025, the rates of theatre tax relief, orchestra tax relief, and museums and galleries exhibitions tax relief (“MGETR) will be permanently set at 40 percent (for non-touring productions) and 45 percent for touring productions and all orchestra productions. The sunset clause for MGETR is also being removed meaning relief will not end on 31 March 2026 as announced at Spring Budget 2023. Tax relief for training costs HMRC has also published updated guidance around the tax deductibility of training costs for sole traders and the self-employed. This guidance aims to ensure that updating existing skills, maintaining pace with technological advancements, or changes in industry practices, are allowable costs when calculating taxable profits.

Further reductions in National Insurance Contributions (“NICs”) for employees and the self-employed and a reduction in the higher rate of Capital Gains Tax (“CGT”) for residential properties disposals featured under the personal taxes banner. Amendments will also be made to the high income child benefit charge thresholds ahead of more sweeping changes in 2026. The remittance basis regime for non-UK domiciled individuals is to be abolished and replaced from 6 April 2025 with a new residence based regime and a new residence based regime will also be introduced for Inheritance Tax. And finally, the furnished holiday letting regime is to be completely abolished from 6 April 2025. NICs reductions From 6 April 2024, the main rate of employee NICs is being reduced from 10 percent to 8 percent. Combined with the 2 percent reduction from 12 percent to 10 percent which was announced at Autumn Statement 2023 and took effect from 6 January 2024, according to the Budget publication this will save the average worker on £35,400 over £900 a year. From the same date, a 2 percent reduction is also being made in the main rate of Class 4 self-employed NICs which will now reduce from 9 percent to 6 percent from 6 April 2024 (a 1 percent reduction from 9 percent to 8 percent from 6 April 2024 had previously been announced at Autumn Statement 2023). When taken together with the abolition of the requirement to pay Class 2 NICs from 6 April 2024, this should save the average self-employed individual on £28,000 around £650 a year. CGT on residential property disposals From 6 April 2024, the higher rate of CGT for residential property gains will be reduced from 28 percent to 24 percent. Residential property gains in the basic rate band will continue to be taxed at 18 percent. High income child benefit charge (“HICBC”) In order to end the current unfairness in the Child Benefit system, the Chancellor announced that from April 2026 the HICBC will move to be assessed on the overall household, rather than on an individual basis. The Government will consult on this in due course. In the meantime, from April 2024 the HICBC income threshold where the tax commences will be increased from £50,000 to adjusted net income of £60,000, and the rate at which the HICBC is charged will be halved so that Child Benefit is not withdrawn in full until individuals earn £80,000 (up from £60,000). This essentially means that from 6 April 2024, every £100 of income over £60,000 will result in a 0.5 percent tax charge on the child benefit received. Abolition of remittance basis for non-UK domiciled individuals The remittance basis for non-UK domiciled individuals is to be abolished from 6 April 2025 and replaced with a UK wide residence-based regime. Individuals who opt into the new regime will not pay UK tax on any foreign income and gains arising in their first four years of tax residence, provided they have been non-UK tax resident for the last 10 years. Transitional arrangements will be introduced for existing non-UK domiciled individuals claiming the remittance basis. This will operate broadly as follows: There will be an option to rebase the value of CGT assets to 5 April 2019; A temporary 50 percent exemption for the taxation of foreign income will be available in 2025/26 only; and A two-year temporary repatriation facility will be available to bring previously accrued foreign income and gains into the UK at a 12 percent tax rate of tax. Further information on these changes can be found in a technical note published by HMRC. Inheritance tax (“IHT”) The Government also announced its intention to move to a residence-based regime for IHT and will consult in due course on the best way to achieve this, including consulting on a 10-year exemption period for new arrivals and a 10-year ‘tail-provision’ for those who leave the UK and become non-resident. However, no changes to IHT will take effect before 6 April 2025. Savings The 0 percent starting rate band for savings income will remain at £5,000 in 2024/25.

Balancing the recent news that the UK tipped into recession at the end of 2023 with calls from politicians in his own party to reduce taxes in what is most likely an election year, Chancellor Jeremy Hunt delivered the UK’s Spring Budget 2024 last Wednesday. According to the Chancellor, the main announcements centred around “more investment, more jobs, and lower taxes”. Read the Institute’s reaction to the Budget. The VAT registration threshold will increase to £90,000 from April 2024 and full expensing which provides 100 percent capital allowances for investments in new plant and machinery by companies will be extended to leased assets, when affordable. The higher 28 percent rate of Capital Gains Tax on residential property disposals will be reduced to 24 percent from 6 April 2024. From April 2025 the remittance basis regime for non-UK domiciled individuals and the furnished holiday lets regime will both be abolished. However, the big ticket announcement was the 2 percent reduction in the rate of National Insurance Contributions for both employees and the self-employed, which will take effect from 6 April 2024. According to the Chancellor’s speech, the Northern Ireland Executive will receive an additional £100 million under the Barnett Consequential (which compensates devolved administrations with funding where Budget measures do not apply UK-wide). And, as announced as part of the package to restore the Northern Ireland Executive, the government will establish an Enhanced Investment Zone in Northern Ireland using £150 million in funding, which will “be able to be used flexibly across spending and tax levers”. Details on the Northern Ireland Enhanced Investment Zone will be published “soon”. The government also committed £2 million “to boost global investment and trade opportunities for Northern Ireland.” Members will also be interested to hear that HMRC’s long planned consultation on “Raising standards in the tax advice market” has been launched and essentially examines options to strengthen the tax agent regulatory framework, including requiring tax advisers to register with HMRC if they wish to interact with HMRC on a client’s behalf. The Institute will be responding to this consultation and engaging with members on this important issue. The analysis in this and subsequent stories is based on the Spring Budget 2024 publications of HMRC and HM Treasury and specifically the main red book publication. The Spring Finance Bill 2024 is expected to be published later this week, in the meantime supporting documents are available, as is the Spring Budget 2024 overview of the tax legislation and rates. A further set of tax administration and maintenance announcements will also be made on “Tax Administration and Maintenance Day” on Thursday 18 April.

After the closure of the Office of Tax Simplification in 2023, HM Treasury and HMRC were set a mandate to focus “on simplifying the tax code”. In January of this year, the government published an update on progress made towards tax simplification. The Spring Budget 2024 contained further details of this work by setting out specific metrics which will be used to track progress being made, especially for small businesses and individuals.   From HMRC’s annual customer survey, a new survey, the government will track the views of small businesses and individuals on the ease of dealing with tax issues, and the ease of finding information. The government will also measure how easy taxpayers find it to deal with HMRC from a survey offered after using HMRC’s telephony or digital services. Lastly, the government will monitor HMRC’s estimate of the net change in cost to businesses of meeting tax obligations from fiscal event measures. These metrics will be kept under review and enhanced, taking into account feedback from stakeholders.  The Spring Budget 2024’s main red book publication also sets out several measures which deliver “further administrative reforms to make it easier for individuals and sole traders to meet their tax obligations by”. In summary, these are as follows:  Easing the payment of inheritance tax before probate or confirmation - from 1 April 2024, personal representatives of estates will no longer need to have sought commercial loans to pay inheritance tax before applying to obtain a “grant on credit” from HMRC; and   Investment in digital services - simplifying access for those who want to pay in instalments in advance via a Budget Payment Plan, or in arrears via a Time to Pay Arrangement from September 2025.  The government also badged the following Spring Budget 2024 measures as simplifying underlying tax rules:  Abolishing the current tax regime for non-UK domiciled individuals;  Announcing the end of the Alcohol Duty Stamps scheme;   Abolishing the furnished holiday lets tax regime from 6 April 2025; and  The forthcoming consultation on reform of Class 2 NIC.