In a recent study analysing the VAT gap published by the European Commission, the VAT lost by Member States in 2021 was €61 billion, over €30 billion less than the comparable figure in 2020. The VAT gap is a measure of the difference between what should be collected and what is actually collected. The unprecedented year-on-year improvement is likely due to a variety of factors, although the uplift in electronic payments and online shopping in 2021 is likely a significant driver. The rate of VAT compliance tends to be greater online and with e-payments.

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.

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.

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.

We have compiled the latest updates to various HMRC VAT publications, briefs and guidance. Readers should note that there are also numerous updates to VAT guidance and rules due to the UK’s departure from the EU. VAT: Introducing a new zero rate to extend the scope of patient group directions; Revenue and Customs Brief 7 (2023): change to the VAT treatment of drugs and medicines supplied under patient group directions; Interpretation of VAT and excise legislation; Buildings and construction (VAT Notice 708); Revenue and Customs Brief 6 (2023): VAT liability of digital publications — Supreme Court decision in News Corp and Ireland Ltd; Fuel and power (VAT Notice 701/19); Register to report and pay VAT on distance sales of goods from Northern Ireland to the EU; Notice in accordance with paragraph 8(2) of Schedule 9ZD to the Value Added Tax Act 1994 Insolvency (VAT Notice 700/56); Register to report and pay VAT on distance sales of goods from Northern Ireland to the EU; Notice in accordance with paragraph 8(2) of Schedule 9ZD to the Value Added Tax Act 1994; and Insolvency (VAT Notice 700/56).

In this week’s EU exit corner, we bring you the latest guidance updates and publications relevant to EU exit and the latest Trader Support Service bulletin is also available. We also remind you to that the Institute will be attending the next UK Domestic Advisory Group meeting on Monday 6 November and would welcome your feedback by Friday 3 November on specific areas of concern which arise in relation to the Trade and Co-operation Agreement. Miscellaneous updated guidance etc. The following updated guidance, and publications relevant to EU exit are available:- Authorised Consignee Temporary Storage (ACTS) location codes for Data Element 5/23 of the Customs Declaration Service; Remote internal temporary storage facilities codes for Data Element 5/23 of the Customs Declaration Service; Importing bananas you have to pay duty on into the UK; Authorisation type codes for Data Element 3/39 of the Customs Declaration Service; Additional Information (AI) Statement Codes for Data Element 2/2 of the Customs Declaration Service (CDS); and Upload documents and get messages for the Customs Declaration Service.

This week we bring you news about planned outages to certain HMRC services over this coming weekend and updated guidance is available for companies claiming the super-deduction or special rate first year allowances. HMRC has also published its most recent performance reports and HMRC’s Insolvency Team is commissioning a series of surveys to obtain feedback from insolvency practitioners. Planned outages to HMRC services Read the below message from HMRC about outages to some services over this coming weekend. “From 10:30pm on Friday 3rd November until 07:00am on Monday 6th November 2023 HMRC is making planned upgrades to some of our IT, moving our internal systems that support our tax credits work, and other services that rely on this infrastructure, to cloud-hosting. This means a small number of internal and external services will be either fully unavailable or have limited functionality during the migration. This will take place from 10:30pm on Friday 3rd November until 07:00am on Monday 6th November and will improve the reliability, resiliency, and security of the service. As per our business opening hours, there’s no impact across our telephone lines as they are closed for the weekend. Our Customs and International Trade line is open and this migration has no impact. The webchats that are operational during this weekend (Saturday only) and may be impacted are listed below.  Depending on the query, our advisors may only be able to provide generic advice. Needs Extra Support Online Services Helpline Self-Assessment Customer-facing impact  Impacted digital services detailed below will have suitable messaging explaining that the services is unavailable either on GOV.UK, PTA or HMRC’s App and will advise customers to check back from Monday at 07:00am. Services: Marriage Allowance Employee Expenses Tax Credits Service Help to Save PAYE Income Tax History SA – Set up a Payment Plan EPAYE – Set up a Payment Plan VAT - Set up a Payment Plan Exercise Environment Insurance Transport Taxes Service (amendments) Online Tax Registration Service Services and internal operational impacts are subject to change. We do expect services to be up and running by midday on Sunday 5th November if the migration is successful.” Super deduction and special rate first year allowance guidance The guidance on claiming the super-deduction or special rate first year allowance (“FYA”) on plant or machinery costs for companies has been updated. Readers are reminded that these capital allowances incentives came to an end on 31 March 2023 but were replaced by full expensing and a new 50% FYA for special rate and long life assets. The updated guidance on the super-deduction and 50% FYA is still relevant to companies making claims in respect of such expenditure incurred up to 31 March 2023 and will also be relevant thereafter to disposals of such assets in accounting periods either straddling 31 March 2023 or falling wholly after that date. HMRC performance reports HMRC’s has published its most recent monthly performance reports and specifically the report for August 2023.. From 2 October, HMRC is no longer aiming to operate to a 10-minute service level on the Agent Dedicated Line. The Institute regularly discusses HMRC performance at stakeholder forum meetings and welcomes your feedback at any time. HMRC’s performance continues to be under pressure due to ongoing budgetary constraints and high inflation Insolvency survey HMRC’s Insolvency Team announced in its September 2023 edition of Insolvency Guidance that it is commissioning a series of surveys to obtain feedback from insolvency practitioners. The first survey, which is now open, examines the experiences of insolvency practitioners’ in contacting HMRC’s VAT helpline and will remain open until 1 December 2023. 

Today, Tuesday 31 October 2023, is the self-assessment paper filing deadline for 2022/23 to avoid penalties. Readers are reminded that if an online self-assessment return cannot be filed by virtue of one of the online filing exclusions or special cases (search GOV.UK for details as these regularly change) meaning the return must be filed on paper instead, then in those cases, the 2022/23 paper filing deadline is extended to 31 January 2024. A reasonable excuse claim should accompany such returns.

Readers will be aware that the Institute has been lobbying HMRC from the beginning of September in relation to the 31 October 2023 deadline for selling second-hand motor vehicles under the VAT margin scheme, where these were bought in GB and transferred into Northern Ireland prior to 1 May 2023. HMRC’s VAT policy team confirmed to us in a meeting last week that dealers can continue to use the VAT margin scheme for such vehicles that were in stock on 1 May 2023 as long as these are sold by 30 April 2024. Hence the previous deadline has now been extended by six months. According to HMRC, there will be no further extensions to this deadline thereafter. The Institute is pleased to see HMRC have taken the decision to extend this deadline which clearly recognises the difficulties being experienced by dealers in selling these vehicles in the current economic climate. The guidance on GOV.UK has now been updated to confirm this. Once again, the Institute thanks those members and businesses who provided supporting information to assist us in achieving this result. HMRC’s email message confirming the extension says the following:- “We have listened to feedback from businesses about the 31 October deadline, and have now extended the period that you can use the VAT margin scheme for vehicles you had in stock on 1 May 2023 and have not yet sold. You can now use the VAT margin scheme for eligible motor vehicles that you purchased in Great Britain and moved to Northern Ireland before 1 May 2023 and still have in stock,  if you resell them by 30 April 2024. If you sell them after 30 April 2024, you will have to account for VAT on the full selling price. Find out more information about motor vehicles you had in stock on 1 May 2023.”  HMRC has also asked to us to issue a reminder that the new VAT related payment scheme should be used, where the relevant conditions are met, in relation to second hand vehicles bought in GB and transferred to Northern Ireland from 1 May 2023. The relevant guidance for such vehicles is available here. Should you have any queries in relation to the extension to the VAT margin scheme deadline or the new VAT related payment scheme, please get in touch.

Professional Standards Department is pleased to publish its AML Supervision Report 2022/2023. This is the first Report to cover our AML supervisory activities in both jurisdictions, ROI and UK.

President Sinead Donovan was in the US this week, meeting with a variety of members and stakeholders. The insights gleaned on the trip will be put into action in the coming weeks and months, but among the key takeaways is that the US remains a destination of choice for Irish ACAs so our task is to drive greater awareness of the opportunities for members; our response to issues like the attractiveness of the profession, adapting to new sustainability reporting standards and cybersecurity will be shaped through collaboration with our US partners; and finally, our profession will continue to play a key role on both sides of the Atlantic driving and servicing inward FDI  in support of Ireland’s economy. Member engagement There is no doubt that the US remains a destination of choice for Irish ACAs and the President heard directly from these members during several office visits and two member events. The ACA proves to be a door opener for so many of our members when they arrive in the States, as indeed does the Mutual Recognition Agreement for members practicing, so our task now is to drive greater awareness of the opportunities and help new and existing members to access these.  Partner engagement As ever, the challenges for the profession are the same whether in Naas or New York. The attractiveness of the profession and sustainability reporting standards were two topics that, as expected, the President devoted a lot of time to in meetings with among others IAASB, AICPA, Chartered Accountants Worldwide Network USA, Deloitte EY, PwC, KPMG, and Harvard University.  How we as a profession adapt to the new reporting standards and educate our members on them will be shaped through such collaboration, and Chartered Accountants Ireland will be at the heart of that. The same goes for selling the attractiveness of the profession, with a focus on demonstrating the different routes into the profession and demonstrating through our actions our commitment to a healthy work-life balance. Perception is still an issue. In meetings with Boston College, the scale of the profession’s role when it comes to cybersecurity was reinforced. There are approximately 4million open roles in cyber security globally, and accountants are ideally placed to play a central role in tackling the challenge. The Institute held its inaugural seminar for members with Boston College in Dublin last April, and there is so much scope to expand this education to position members to have an impact.  Working for Ireland Inc It was great to meet the IDA and some of the companies (powered by ACAs) supporting inward FDI. Against the backdrop of a new global minimum corporation tax rate from 2024, and stiff competition for investment, our profession will continue to play a key role on both sides of the Atlantic driving and servicing that investment so well for Ireland’s economy. For our part, we will continue to ensure the Institute has a strong voice in demonstrating how the profession can continue to support FDI and be a strong resource for companies.

For readers who did not secure a place on the Corporate Enforcement Authority’s (CEA) inaugural conference of 19 October 2023 ,the CEA has now made available the content of most of the papers delivered at the conference and readers can access the papers on the CEA’s website under the “Events “  button .The following is a list and some details of what is contained in the papers. “Opening Remarks” Ian Drennan CEO of Corporate Enforcement Authority The evolution of compliance in the last 25 years with there now being widespread compliance with company law. The remarks also allude to the CEA’s strategy for 2022-2025. “Searching for evidence in the digital age”  James Dwyer, SC   This material considers the extent to which searches for criminal material can encroach upon a citizen’s right to privacy and legal professional privilege. It refers to a number of recent cases including the case of People (DPP) vs Quirke where the  Supreme Court held that although the search under a warrant issued was lawful, in the absence of specific permission being sought and given to search the computers, the search of the computer was not lawful. “Privacy, privilege, and access to data” Bernard Condon, SC The slides reference the Quirke decision and the 2023 decision in Corcoran v the Commissioner of an Garda Síochána. “European Public Prosecutor’s Office” Claire O’ Regan, Office of the DPP The slides content includes background on the EPP’s office, its competence, structure, its investigations, and prosecutions. “The Evolution of Ireland’s restriction of company directors’ regime.” Aoife McPartland, CEA Director “The challenge of privacy law to corporate transparency and probity" Paul Egan SC This  paper addresses the topical issues of public access to information such as CRO documents and information versus the EU trend towards concealment of ownership information and corporate secrecy .The paper refers to further reading material on this area. It also contains many useful diagrams including comparators on access to company registers ,who has the right to inspect and take copies and RBO information for Irish private companies and group structures. The paper  also signals the presenter’s view of the shortcomings of the attempted Irish fix (Beneficial Ownership Of Corporate Entities) (Amendment) Regulations 2023) in light of the 2022 ECJ ruling  where the ECJ held invalid the provisions of the AMLDs which require information on the beneficial ownership of corporate /other legal entities to be accessible in all cases to any member of the general public. You can read further about that on his firm Mason Hayes &Curran’s website Encroachment of Privacy Law on Disclosure of Company Information.  “The new European Directive harmonising certain aspects of insolvency law, directors' duties, Simplified Liquidation Procedures, and other matters."  Professor Irene Lynch Fannon This presentation deals with the proposed INSOL directive including certain elements such as harmonisation of insolvency and rescue law in the EU, the codification of common law rules and equitable principles and enforcement with a particular focus on company directors’ duties and proposed simplified liquidation measures. The presenter in comments after the event said that these [proposals in INSOL Directive ] “…. are all interesting developments and are even more interesting when considered in the context of the Preventive Restructuring Directive 2019/1023, now implemented in Ireland in 2022 in EU (Preventive Restructuring) Regulations amending the Companies Act 2014. As regards Directors' duties in particular there is some unresolved tension between Art 19 of the latter (now s. 224A/2014 Act) and the proposed Arts. 36 and 37 of the new Directive”. Investigations under the Companies Act  Neil Steen S.C. The primary subject of the paper is stated to be the court’s power to appoint inspectors to investigate the affairs of a company, but the paper also observes that the CEA enjoys certain other powers that are in practice highly relevant to an application to the court. .The paper references a table of relevant statutes and case law, and its content includes the purpose of company law inspections and powers of inspectors . 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 recent consultation launched by the Institute of Chartered Accountants in England and Wales (ICAEW) on proposed changes to their professional indemnity insurance (PII) arrangements will be of interest to Chartered Accountants Ireland members and firms. PII arrangements are developed jointly by the three bodies, Chartered Accountants Ireland (the Institute), ICAEW and the Institute of Chartered Accountants of Scotland, and any resulting changes may impact Institute firms.  Although amendments have taken place periodically, a wide-ranging review of all the PII arrangements has not taken place for some time and the current limits of insurance have not changed since 2008. Several issues have necessitated the need for review of PII arrangements including: The changing nature of the structure of firms and their insurance arrangements; financial capacity of members and entities to retain (self-insure) risk; pressure to manage the cost of insurance; and an increase in firms unable to source qualifying insurance. ICAEW have conducted a review of the requirements with the aim of ensuring they remain fit for purpose and provide adequate protection to the public and to firms while being mindful of the cost and availability of insurance to the profession and are consulting on proposed changes to same. This consultation follows a call for evidence launched earlier in the year to gain a better understanding of issues faced in the insurance market. A summary of the proposed changes and the consultation document are available here. The principles have the support of the Institute’s Professional Standards Board. We encourage members to read the consultation document prepared by ICAEW in full. Institute firms can respond to the consultation as set out at the link above (and need not complete any questions which are specific to ICAEW members/firms only), or alternatively, can provide comments on any aspects of the consultation or on the Institute’s PII requirements generally, by email to Professionalstandards@charteredaccountants.ie.  The consultation period will run until 14 December 2023. The Institute’s PII requirements are set out in Chapter 7 of the Public Practice Regulations.

Readers will be aware that the Institute has been lobbying HMRC from the beginning of September in relation to the 31 October 2023 deadline for selling second-hand motor vehicles under the VAT margin scheme, where these were bought in GB and transferred into Northern Ireland prior to 1 May 2023. HMRC’s VAT policy team has confirmed to us in a meeting that dealers can continue to use the VAT margin scheme for such vehicles that were in stock on 1 May 2023 as long as these are sold by 30 April 2024. Hence the previous deadline has now been extended by six months. According to HMRC, there will be no further extensions to this deadline thereafter. The Institute is pleased to see HMRC have taken the decision to extend this deadline which clearly recognises the difficulties being experienced by dealers in selling these vehicles in the current economic climate. The guidance on GOV.UK has now been updated to confirm this. Once again, the Institute thanks those members and businesses who provided supporting information to assist us in achieving this result. HMRC’s email message confirming the extension says the following:- “We have listened to feedback from businesses about the 31 October deadline, and have now extended the period that you can use the VAT margin scheme for vehicles you had in stock on 1 May 2023 and have not yet sold. You can now use the VAT margin scheme for eligible motor vehicles that you purchased in Great Britain and moved to Northern Ireland before 1 May 2023 and still have in stock,  if you resell them by 30 April 2024. If you sell them after 30 April 2024, you will have to account for VAT on the full selling price. Find out more information about motor vehicles you had in stock on 1 May 2023.”  HMRC has also asked to us to issue a reminder that the new VAT related payment scheme should be used, where the relevant conditions are met, in relation to second hand vehicles bought in GB and transferred to Northern Ireland from 1 May 2023. The relevant guidance for such vehicles is available here. Should you have any queries in relation to the extension to the VAT margin scheme deadline or the new VAT related payment scheme, please get in touch.

Our most recent update on this issue set out the discussions which took place with HMRC on 3 October. Since then, discussions have continued and the Institute is now pressing HMRC to remedy the situation given the continued and ongoing economic difficulties being experienced by second-hand car dealers in Northern Ireland in trying to sell these vehicles by the deadline of Tuesday 31 October 2023, in order to avail of the VAT margin scheme. Any further updates on the issue will be reported in the news section of our website. The Institute extends its thanks to those members and businesses who have provided supporting information to facilitate the dialogue with HMRC. 

Antigua and Barbuda, Belize, and Seychelles have all been added to the list of non-cooperative jurisdictions. The list is part of the EU’s ongoing work to promote tax transparency and fair taxation. 

EU Finance Ministers recently adopted new tax transparency rules for service providers in crypto-asset transactions for EU customers. The new rules will update various existing measures, including DAC 8, and are aimed at improving the detection of tax fraud, evasion and avoidance. The Directive will require that all crypto-asset providers based in the EU must report on transactions involving EU residents.  

This week we bring you news about recent bulletins published by HMRC and the tax checks that are needed to renew certain licenses have recently been extended to Northern Ireland. Also featured are key reminders from HMRC about phishing scams, and a reminder to tell HMRC that your personal and business circumstances have changed. An email reminder has also been issued about alcohol duty reform and the various new reliefs which may be available. Earlier this month, the Chancellor announced an increase to the National Living Wage which will take effect from April 2024.  Recent bulletins  The most recent Agent update: issue 113 was recently published last week. Get the latest guidance and information including:- loss carry back claims for corporation tax;  making a valid claim for R&D tax relief;  the launch of a toolkit for the assurance of remittances to be reported on tax returns; and  important information for taxpayers using 'pay by bank' to pay HMRC.  The latest Employer Bulletin: October 2023 is also available providing employers and agents with up to date information on payroll topics. Featured in this bulletin are the following topics, amongst others:-  electric charging of company cars and vans at residential properties;  paying your PAYE Settlement Agreement;  reporting PAYE information in real time when payments are made early at Christmas;  Overlap relief — preparing for the new tax year basis; and  ‘pay by bank account’ enhancements.  Extension of tax checks for licence renewals  The tax checks which have been in place in England since April 2022 and which are needed before renewing certain licences were recently extended to Scotland and Northern Ireland. In Northern Ireland the checks are required for licences to drive taxis and specifically for renewal applications made on or after 2 October 2023.  Licensing authorities must confirm that a tax check has been completed by applicants renewing or applying for certain licences.   In order to complete a tax check, an online form should be used which provides a code (which expires after 120 days) which should then be given to the licensing body to confirm the applicant’s status. It should be noted that this tax check is in addition to any checks that licensing authorities already undertake.   More information is available in the guidance.  Phishing scams  HMRC has recently shared tax phishing scam guidance for students with universities on its social media channels. This is because many students are starting paid work, sometimes for the first time, they have not dealt with HMRC before, and are unfamiliar with paying tax or dealing with the tax authority. This makes them vulnerable to fake ‘tax rebate’ offers and similar scams.  A more general news release has also been published warning people about phishing scams associated with the Self-Assessment deadline.   Change in personal and business circumstances  A video was issued on YouTube in summer 2022 promoting the HMRC app and advising individuals why and how to notify HMRC if they have a change of personal or business circumstances: How can I update my personal details on the HMRC app?  HMRC have asked us to share the below reminder:-  “This is a reminder to keep your tax records up to date.   Tell HMRC if your circumstances change  HMRC requires you to tell us of any changes to your personal or business circumstances.   This is so your tax records remain up to date and we can make sure you get the right information about your tax affairs.   If your name, address or personal details have changed, you need to tell HMRC via gov.uk https://www.gov.uk/tell-hmrc-change-of-details You can also notify us, and check your details are correct, on the HMRC app by opening a personal tax account. Download the app today on iOS or Android.   If your business address or details have changed, for example you may no longer be self-employed or your business may have closed, you need to tell HMRC via gov.uk https://www.gov.uk/tell-hmrc-changed-business-details   You also need to tell us about certain income changes, relationship, or family changes, and if you are planning to leave the UK. For more information visit gov.uk   It is your responsibility to tell us; if you don’t you could still incur fines and penalties after your business has stopped trading.”

In this week’s EU exit corner, we bring you the latest guidance updates and publications relevant to EU exit. We also update you on recent developments in relation to the Windsor Framework and the latest Trader Support Service bulletin is also available. The Institute will also be attending the next UK Domestic Advisory Group meeting on 6 November and would welcome your feedback by Friday 3 November on specific areas of concern which arise in relation to the Trade and Co-operation Agreement. Update on the Windsor Framework   Meetings of the Joint Committee and the Specialised Committee on the Windsor Framework took place recently, where the EU and UK reviewed progress and finalised certain arrangements for the Framework’s implementation. According to the joint statement released  after the Withdrawal Agreement Joint Committee meeting “The Joint Committee took stock of discussions under the Withdrawal Agreement framework since the last meeting on 3 July 2023. The alternate co-chairs welcomed the progress made and reiterated their mutual commitment to continued work to ensure the full implementation of all the elements of the Windsor Framework in a faithful way.”  Parliament also returned from conference recess last week, with debates taking place on the Retained EU Law Bill, and the Windsor Framework regulations. Miscellaneous updated guidance etc.   The following updated guidance, and publications relevant to EU exit are available:- HMRC Brexit communications resources;  Report payments and view your allowance for non-customs state aid and Customs Duty waiver claims;  Report and manage your allowance for Customs Duty waiver claims: service availability and issues;  Data Element 2/3 Documents and Other Reference Codes (National) of the Customs Declaration Service (CDS);  Check if a business holds Authorised Economic Operator status;  List of customs training providers;  Making an entry summary declaration;  Apply for a voluntary clearance amendment (underpayment) (C2001);  Claim repayment or remission of charges on rejected imports; and  Moving goods between the UK and the UK Continental Shelf. 

From 1 April 2023, the reporting requirements for the Trust Registration Service (“TRS”) were expanded. As a result, HMRC updated the TRS manual. An online form must now be used to report “material discrepancies”. This does not include small spelling errors or slight differences in the trust name, so long as the trust is identifiable from the trust name on the TRS.  A relevant person is now required to conduct ongoing due diligence throughout a business relationship with a registerable trust, and prior to engaging in the relationship. Ongoing monitoring must also be carried out in line with the relevant person’s money laundering obligations.