Your Individual Annual Return 2023 is now available for completion online.  Please ensure it is submitted by 31 October 2023. Click here for your Individual Annual Return. Please note, timely completion will ensure that all members in practice are invoiced correctly for 2024 Regulatory Fees.

Minister Dara Calleary, TD has signed the Companies Act 2014 (Section 682) Regulations 2023. The Regulations, which came into effect on 1 October 2023, prescribe a revised Report for use by liquidators when making reports to the Corporate Enforcement Authority under section 682 of the Companies Act 2014. The revised section 682 report should be used for all submissions made from 1 October 2023. The Rules of the Superior Courts (Order 74) 2023 also commenced on 1st October 2023. There are two new questions included: - Question 22 requires the liquidator to confirm whether the directors have demonstrated that they have had regard to the interests of their employees in accordance with the requirements of section 224 of the Companies Act 2014. - Question 32 requires additional information where liquidators are asked to indicate whether they have advised directors, in respect of whom relief is not sought, of the grounds upon which an application to have them restricted will be brought.

The FRC have issued a project update relating to the ongoing periodic review of FRS 102 and FRS 105. In its update, the FRC noted that they received 54 response letters to FRED 82 and they are now preparing final amendments for issue which will take into account the responses received. Earlier this year, the Institute’s Financial Reporting Technical Committee issued a response to FRED 82. The FRC have indicated that they expect to issue the final amendments to FRS 102 and FRS 105 in the first half of 2024, with an expected effective date of periods commencing on or after 1 January 2026 for the changes. This is 1 year later than the date proposed in FRED 82. The FRC are working on amendments to the standards and provided updates on the revenue recognition and lease accounting sections which respondents provided feedback on during the consultation process. They will continue to work towards a “five-step model” for all FRS 102 and 105 preparers, while seeking simplifications to ensure proportionality for micro-entities. In addition to this, they have indicated that they will consider how to ensure that the “on-balance sheet” model of lease accounting under FRS 102 will be proportionate and understandable for FRS 102 preparers of all sizes.

The Institute has responded to the International Accounting Standards Board’s (IASB) request for information relating to IFRS 9 Financial Instruments impairment requirements. The IASB’s request for information begins the post-implementation review of IFRS 9’s impairment requirements and this allows the IASB to assess whether the effects of applying the new requirements on users of financial statements, preparers, auditors and regulators are those the IASB  intended when it developed the requirements. IFRS 9 has been effective for annual periods beginning on or after 1 January 2018. Some of the key points made by the Financial Reporting Technical Committee on behalf of the Institute include; Broadly speaking, the impairment model in IFRS 9 is working as intended and produces relevant and reliable information. There are some areas where users of the standard would benefit from additional guidance and educational material (for example- the definition of credit losses, calculation of expected credit losses on inter-group loans which are repayable on demand and interaction of impairment with other IFRS standards). There is a high cost of applying the impairment requirements to intercompany loans, often with limited benefit due to investors often placing greater reliance on the consolidated financial statements. The simplified approach for trade receivables, contract assets and lease receivables is working well in practice and is widely used. A recommendation that the IASB provide guidance regarding minimum disclosure requirements in IFRS 7 to achieve greater consistency in the information provided. The increasing prevalence of questions arising in relation to ESG risk when applying impairment requirements and the need for more guidance and educational material.

Last week we notified readers that the Institute is meeting with HMRC tomorrow to discuss the 31 October 2023 deadline for using the VAT margin scheme for second hand vehicles purchased from Great Britain and moved to Northern Ireland before 1 May 2023. Sales of such vehicles after the end of the VAT margin scheme on 31 October 2023 will mean that VAT must be charged on the full selling price. These vehicles do not qualify for the VAT related payment scheme which commenced on 1 May 2023. Today is the deadline for providing us with supporting evidence that many of these vehicles are currently unsold and are expected to remain unsold on 31 October 2023. A reminder of the evidence that HMRC is seeking is set out below.  HMRC has requested details or estimates in respect of the following:- The numbers of second-hand vehicles dealers in Northern Ireland had in stock on 1 May 2023 that were sourced from Great Britain;  How many of these remain unsold at present, and their estimated value;  How many are likely to be unsold on 31 October 2023, and their estimated value; and  If there is any category of vehicle that may be particularly affected by having a cut-off date of 31 October 2023 after which the margin scheme could no longer be used.  We recognise that many dealers may not be able to provide all of the detail requested in such a short period of time, especially the category of vehicle, but any information or evidence to support the difficulties being experienced in selling these vehicles would be appreciated.  The meeting will also be an opportunity to discuss the new second-hand motor vehicle VAT related payment scheme. Feedback on the end of the VAT margin scheme and the new VAT related payment scheme should be emailed to the Institute by the end of today Monday 2 October 2023. 

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 (“TSS”) bulletin is also available. Last week it was  announced that the TSS is being extended one further year to 31 December 2024. The Institute has been lobbying for a further extension to the TSS and welcomes this decision but will be considering what permanent supports are needed in this area in future.  Update on the Windsor Framework  Last week HMRC published further details on the Windsor Framework as some significant elements of it began to take effect from the end of September.   From 30 September 2023, the new UK Internal Market Scheme expanded the range of businesses able to benefit from the new arrangements provided to protect internal UK movements, including the removal of EU tariffs. In tandem, the new sanitary and phytosanitary “green lane” arrangements took effect, including the new Retail Movement Scheme for agrifood retail products, new rules to allow plants to move into Northern Ireland and new arrangements to enable seed potatoes to move once again from Great Britain to Northern Ireland. As these changes bed down in the coming weeks and months, contact us to share your feedback and any problem areas which arise.  Miscellaneous updated guidance etc.   The following updated guidance, and publications relevant to EU exit are available:-  Customs declaration completion requirements for goods subject to sanitary and phytosanitary checks under the Northern Ireland Protocol;  Draft Decision No 1/2023 of the Specialised Committee on Participation in Union Programmes under the Trade and Cooperation Agreement adopting Protocols I and II and amending Annex 47 to the Trade and Cooperation Agreement;  Third Trade Specialised Committee on Customs Cooperation and Rules of Origin Agenda;  Using the Trader Dress Rehearsal service;  List of customs training providers;  Making an import supplementary declaration;  Making a simplified frontier declaration;  Making a full import declaration;  Data Element 2/3: Documents and Other Reference Codes (Union) of the Customs Declaration Service;  Receive goods into and remove goods from an excise warehouse (Excise Notice 197); and  Paying additional excise duty for goods moving to Northern Ireland.   

The OECD has released the latest outcomes on the implementation of Country-by-Country reporting (CbCR). CbCR is the reporting mechanism which gives effect to BEPS Action 13 and requires tax administrations to collect and share detailed information on large multi-national enterprises operating in their jurisdiction. The OECD has reported that implementation of CbCR in countries has largely been consistent with the Action 13 minimum standard.

The Carbon Border Adjustment Mechanism (CBAM) has entered its transitional phase. CBAM is Europe’s landmark tool to combat carbon leakage. It equalizes the price of carbon between domestic products and imports ensuring Europe’s climate policies are not undermined by less rigorous green standards in third countries. In last Friday’s Sustainability Bulletin, the Institute’s Sustainability Officer, Susan Rossney, included an update on the measure.

In its response to the consultation “Taxation of Employee Ownership Trusts and Employee Benefit Trusts”, the Institute’s Northern Ireland Tax Committee has recommended that the UK Government undertake a full review of UK employment taxes policy, which should be targeted at assessing how this could be harnessed and reformed to ultimately incentivise employment and reduce the current labour and skills shortages in the UK.  The Committee’s submission also includes a number of recommendations which seek to reduce the cost of employment in certain areas and also recommends that an enhanced form of tax relief for training employees in key skills areas, in the form of a super deduction, should be introduced. Read the Committee’s full recommendations on page 7 of the submission.

Last week we told you about changes which HMRC is making to the waiting times on the Agent Dedicated Line (“ADL”) which take effect from today, Monday 2 October 2023. The Institute wants to hear from agents calling the ADL in the next few weeks as we continue to discuss this change, and its impact, with HMRC. Broadly, the changes will mean longer waiting times with certain types of PAYE calls being rerouted to other helplines. HMRC has since shared some further information and messaging on the changes, which we have outlined below. HMRC’s Representative Body Steering Group forum, at which these changes are being discussed with us and the other Professional Bodies, has passed all feedback received to the various HMRC operational teams implementing them. For example, at present there remains a lack of clarity around the types of PAYE queries which will be diverted to other helplines. We expect to hear more on this aspect in the coming weeks.   It is also unclear how much longer an agent may expect to wait. HMRC has advised us that it will be closely monitoring the revised service and will provide further clarification which will be included in October’s Agent Update publication.  Further discussions will also be held with the Professional Bodies hence why we urge you to get in touch and share your experiences and feedback on the impact of these changes as they bed down. 

This week we bring you HM Treasury’s response to the Institute’s letter on changes to the geographical scope of agricultural property relief and the latest report from the Administrative Burdens Advisory Board (“ABAB”) has been published. At a recent meeting HMRC advised that although the marriage allowance online form is not currently mandatory, using the form may mean that claims are processed quicker. HMRC has also issued another reminder email on the recent alcohol duty changes which took effect from 1 August 2023 and a detailed update has been published on the actions identified at the February 2023 HMRC Stakeholder Conference. And finally, the latest news and information bulletin from HMRC is available.  HM Treasury responds to letter on changes to the geographical scope of agricultural property relief  At end of August, the Institute’s Northern Ireland Tax Committee wrote to the Financial Secretary to the Treasury to express its concerns in respect of the proposal to restrict the geographical scope of agricultural property relief (“APR”) and woodlands relief (“WR”)  from April 2024. HM Treasury has now responded to that letter which you can read on our website.   The Institute recently submitted evidence to the House of Lords Finance Bill Sub-Committee  inquiry into Finance Bill 2023-24 and once again raised its concerns in relation to the APR and WR draft legislation, in addition to the proposal to merge the UK’s R&D tax relief schemes from April 2024. Members will be able to read this submission when the Committee confirms it has accepted the submission as evidence.  Latest report of the Administrative Burdens Advisory Board (“ABAB”)  The Tell ABAB Survey report was recently published and details responses to April’s ‘Tell ABAB Survey’, which this year had a record 7,500 responses. In previous years, responses have averaged around 3,000. Of the responses, 86.9 percent came from businesses and 12.7 percent from tax agents. This represents a significant shift from 2022 when 67.8 percent of responses were from businesses and 32.2 percent from agents.  Board members come from a range of businesses and professions, with their goal being to make “a noticeable difference for small business by supporting HMRC in:-  helping to reduce administrative burdens; and  ensuring that the tax system is easier, quicker, and simpler.”  The key findings from the survey reveal that burdens on business remain a significant concern and they continue to increase year on year. Off-payroll working rules, Making Tax Digital and changes in importing and exporting procedures have contributed to increasing burdens during the survey period. Additionally, businesses state that they have not witnessed benefits of digitalisation yet.  The shift to nomadic working poses challenges. According to the survey, 59.5 percent of those who worked from home or had employees working from home or as nomadic workers, were familiar with HMRC’s working from home guidance. Whilst this percentage might look relatively high, these workers now form a significant part of the workforce, with over 63 percent of respondents stating that they were working from home or as nomadic workers.  There is definite evidence from the survey that guidance to business is improving. Many respondents rated the ease of understanding written correspondence and the information on YouTube videos highly. Whilst there are still problematic HMRC forms, the numbers here are relatively low and although there are remaining frustrations with GOV.UK, these are also relatively low.  Another important message is that respondents continue to express a strong desire to speak to a human advisor. Satisfaction levels on response times for telephone calls remains low, with respondents being dissatisfied with this service for that reason. 

Thursday 5 October 2023 is the deadline to notify HMRC of a new source of income or gain for 2022/23.  Those required to register for self-assessment are:- Anyone who is self-employed or a sole trader which commenced in 2022/23; Anyone not self-employed but who had a new source of income or a gain in 2022/23; or  Anyone who became a partner in a partnership, or a new partnership commenced in business in 2022/23.   Failure to register by the deadline can result in HMRC charging a failure to notify penalty.   

HMRC’s latest schedule of live and recorded webinars is now available for booking. Spaces are limited, so take a look now and save your place.  

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 also 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. 

Donal Whelan outlines six essential steps to foster openness, support and well-being in your organisation during Mental Health Awareness Month October is Mental Health Awareness Month, and while the stigma around mental health issues may be decreasing, disclosing problems to others in your organisation might not be getting easier. Many employees hide mental health concerns for fear of being labelled ‘unstable’ or ‘unreliable’. With increased awareness about mental health and a movement toward removing the negative stigma associated with mental conditions, many workplaces are stepping up to change their policies. Improving mental health awareness in your office begins with these six key steps. 1. Increase awareness Training sessions for all employees, particularly those in management positions or who could potentially need to oversee employees with mental illnesses, can make it easier for everyone to communicate, build rapport and react appropriately to situations involving mental health. Topics should include a basic understanding of mental health problems like depression and anxiety and how to recognise signs of mental health issues in yourself and your colleagues while explaining that symptoms can vary widely and may not always be obvious. 2. Provide tools for support The biggest surprise for many leaders when dealing with employees who suffer from mental health issues is that they aren’t expected to ‘fix’ them.  Instead, it’s necessary to provide tools to support those employees, much like the tools and accommodations provided to employees with differing needs. This might include, for example, providing a more flexible work schedule for employees with depression or anxiety concerns. Written instructions, not verbal ones, may prove to be the only accommodation an individual with memory problems needs while removing environmental triggers (such as smells or certain noises) can solve many problems for individuals who have panic attacks. 3. Create a mental health policy See Change has put together a great sample mental health policy that will help you establish clear guidelines for your business. Keep in mind that your mental health policy needs to include information about: Avoiding discrimination due to mental illness; How to establish mental illness and what criteria are required; and How to create accommodations for employees with mental illnesses. Remember that each individual is different. Unique accommodations will be required based on the individual’s skills and strengths, as for employees with physical disabilities. A flexible policy will make meeting every employee’s needs easier. 4. Encourage a healthy work-life balance Employees who have a poor work-life balance are more likely to show signs of depression, anxiety and instability. Promoting good mental health includes preventing employees from working outside their contracted hours, encouraging and supporting life events outside the workplace, and creating policies that do not penalise employees for taking accrued time off. Life outside the office can significantly impact life within it, so supporting employees in their everyday lives is critical. 5. Recognise signs of stress Alongside mental health awareness training, managers and supervisors throughout your business should receive training in recognising signs and symptoms of stress in employees. Learning to alleviate that stress will help make healthier, more productive employees. Some common signs of stress include: acting consistently tired; irritability; an increase in the need to take sick leave, particularly in an employee who has not previously been ill regularly; sudden difficulty completing regular work tasks; and indecisiveness or insecurity. 6. Create a culture of openness Mental health concerns or stresses can appear without warning. In many cases, employees will hide or minimise those concerns to prevent discrimination. On top of worrying about the condition itself or the things that have led to it, they’re also concerned that they’ll lose their job or be labelled incompetent as a result. Encouraging a culture of openness throughout the office will enable employees to open up , from admitting when they’ve taken on too heavy a workload or have been working too many hours to keep up to sharing mental health concerns with their supervisors. Supporting mental health in your office is critical to maintaining a safe, healthy environment for all your employees. By creating an environment where people are encouraged to thrive regardless of mental health concerns, you’ll find happier, more productive employees who are firmly committed to your organisation. Donal Whelan is Managing Director at Lincoln Recruitment

As Budget 2024 approaches, the Irish Government  must grapple with a looming election and the need to ease the burden on citizens, explains Doone O’Doherty Budget 2024 will be delivered against a backdrop of record-breaking corporate tax receipts, an upcoming general election and continuing cost-of-living challenges. The Government is under pressure to deliver substantial tax savings. However, with just €1.1 billion set aside for tax cuts – down slightly from last year’s €1.13 billion – there isn’t much to play with. The balancing act for the Government is to put more money in people’s pockets without further fuelling inflation. Budget 2024 will likely include a number of once-off cost-of-living measures that support families. This gives the Government the opportunity to improve household finances without long-term consequences for the Exchequer or the economy. Income tax and the Exchequer For the first seven months of 2023, income tax yielded €18.2 billion in tax receipts for the Exchequer – up 8.8 percent on the same period last year.  Against this robust backdrop, the Government must respond to taxpayers who want to know how much less tax they will pay in January 2024 compared with today. However, with only €1.1 billion set aside for tax cuts, we shouldn’t expect to see any major giveaways. No decreases likely in income tax rates  We probably won’t see any decrease in income tax rates as cuts to both the 20 percent and 40 percent rates would, by themselves, exceed the €1.1 billion available. There was much debate in 2022 about the introduction of a third rate of income tax. However, there is little expectation that we will see it with the Government opting instead to increase the standard rate band. Last year, the threshold at which people moved into the 40 percent tax bracket increased by €3,200 to €40,000. A further increase of €1,500, as modelled by the Tax Strategy Group (TSG), would cost €298 million in the first year (€343 million for a full year). Increases to tax credits are also on the table. Budget 2023 increased the Personal Tax Credit, the Employee Tax Credit and the Earned Income Tax Credit by €75 each and the Home Carer Tax Credit by €100. The TSG estimates that a €50 increase in each credit this year will cost €242 million. The TSG also examined the concept of refundable tax credits. However, this would be a fundamental change to the Irish personal tax system, requiring careful consideration of policy, administration and cost implications. Linking the personal tax system with inflation The Programme for Government undertook to index-link bands and credits from Budget 2022 onwards. A recent report from the OECD on income taxes showed that 17 of the 38 OECD countries already automatically adjust personal income tax systems in line with inflation. Such a move would be expensive, but it would keep take-home earnings in line with inflation. Otherwise, it is hard to see how proposed tax cuts would be actual tax cuts, given the levels of inflation seen in the economy of late. USC burden likely to fall  We expect the Universal Social Charge (USC) burden to fall. A USC rate cut would be expensive, however. A more likely (and cheaper) option is widening USC bands. The abolition of the 3 percent USC surcharge for self-employed people would be positive. Retaining Ireland’s attractiveness Ireland’s personal tax system must compare favourably with other countries around the world to retain the country’s attractiveness. Special Assignee Relief Programme (SARP) continues to have a temporary placement on the statute book (it currently runs to 2025). A signal in Budget 2024 of the Government’s commitment to extend and enhance SARP would be welcomed by businesses. Higher employer PRSI There is a continuing need to raise more social insurance revenue as the population ages. Options include a higher PRSI charge for the self-employed and employers. However, this would not go down well with small businesses, who face increases to the minimum wage, high energy bills, additional sick pay provisions and upcoming pension auto-enrolment for employees, which will be introduced in 2024. Higher employer PRSI in some form seems inevitable in the years ahead, though perhaps not in this budget. Easing the cost of living and housing  The €1.1 billion set aside for tax cuts excludes once-off spending measures to help people with the cost of living. These are expected to include a repeat of last year’s energy credits. For landlords, the Minister for Housing has stated that he will consider “efficient and effective” measures to attract and keep them in the Irish market. For renters, we may see a repeat of (and maybe an increase in) the €500 rent credit introduced last year – although uptake has been lower than expected. Mortgage holders will be looking for some relief considering recent rate increases, which could include a targeted form of mortgage interest relief. And for first-time buyers, an extension of the Help to Buy Scheme (due to expire at the end of 2024) could be on the cards. Widening of the capital acquisitions tax-free threshold At present, children can inherit €335,000 tax-free from their parents, but there is an acknowledgement that this may not be enough to cover the cost of a typical family home. A widening of this tax-free threshold would be favourable. Budget 2024 comes at a time when the business community is focused on supporting the workforce with the cost-of-living crisis while managing the increasing costs of doing business. At the same time, businesses are focused on attracting, incentivising and retaining key talent and upskilling their workforce to meet changes in business practices – particularly technological disruption. Businesses need support through this challenging period.  Doone O’Doherty is Partner of People & Organisation at PwC Ireland

Next week representatives from the Institute’s Northern Ireland Tax Committee and a number of VAT specialists from local member firms are meeting with HMRC’s VAT policy team to discuss the end of the second-hand motor vehicle VAT margin scheme on 31 October 2023. We need your assistance in gathering supporting evidence to lobby for an extension to the scheme’s deadline. Read below for the supporting evidence requested by HMRC. The meeting will also be an opportunity to discuss the new second-hand motor vehicle VAT related payment scheme. Feedback on the end of the VAT margin scheme and the new VAT related payment scheme should be emailed to the Institute by the end of Monday 2 October 2023. As advised earlier this month, only vehicles moved from Great Britain to Northern Ireland before 1 May 2023 which are sold by 31 October 2023 qualify for the VAT margin scheme; if sold after 31 October 2023, VAT will need to be charged on the full selling price of the vehicle, and not the margin made. We are aware that many second-hand car dealers have significant pre-1 May 2023 stock of these vehicles, which are selling very slowly due to the ongoing inflationary crisis and general economic conditions.   If sold after 31‌‌‌ October 2023, VAT must be accounted for on the full selling price of the vehicle as the conditions for the new second-hand motor vehicle payment scheme, which only applies to eligible motor vehicles moved from Great Britain to Northern Ireland after 30 April 2023, will not be met.  The Institute highlighted this issue to HMRC earlier in the month; as a result, HMRC has requested details or estimates in respect of the following:- The numbers of second-hand vehicles dealers in Northern Ireland had in stock on 1 May 2023 that were sourced from Great Britain; How many of these remain unsold at present, and their estimated value; How many are likely to be unsold on 31 October 2023, and their estimated  value; and If there is any category of vehicle that may be particularly affected by having a cut-off date of 31 October 2023 after which the margin scheme could no longer be used. We recognise that many dealers may not be able to provide all of the detail requested in such a short period of time, especially the category of vehicle, but any information or evidence to support the difficulties being experienced in selling these vehicles would be appreciated.

Last week, HMRC announced via the latest Agent Update and an email to agents that from next Monday 2 October 2023 it will no longer aim to operate to a 10-minute service level on the Agent Dedicated Line (“ADL”), therefore waiting times may vary depending on how many agents are calling HMRC at any one time. The Institute wishes to make clear that it does not agree with HMRC that this change will allow an improvement in HMRC services. The announcement comes against the continuing backdrop of resource and budgetary pressures being experienced by HMRC. In addition to no longer working to a 10-minute wait time on the ADL, the announcement also confirms that from 2 October, information on call waiting times will be introduced, and PAYE queries will be re-routed to PAYE advisers, not those on the ADL. We have asked HMRC to provide more information on precisely what PAYE queries will be rerouted in order that agents may directly call the relevant helpline instead of calling the ADL and being rerouted. We have previously discussed the importance of the ADL with HMRC, and although the ADL will remain available, we are disappointed to see what will effectively be a reduction in service levels to agents. Coupled with the recent closure from 12 June to 4 September of the self-assessment (“SA”) helpline, we are concerned that this will have a serious impact on the ability of agents to support their clients in busy season in the next few months in the run up to the 2022/23 online SA filing deadline on 31 January 2024. The Institute will continue to discuss the impact of these changes, and HMRC service levels with HMRC. As the ADL changes take effect from next week, we want to hear from you about the impact that this change is having. Please get in touch by email to let us know so that we may represent your views at meetings with HMRC.

Thursday 5 October 2023 is the deadline to notify HMRC of a new source of income or gain for 2022/23. Last week HMRC also issued a reminder of this deadline. Those required to register for self-assessment include:- Anyone who is self-employed or a sole trader in a business which commenced in 2022/23; Anyone not self-employed but who had a new source of income or a gain in 2022/23; or Anyone who became a partner in a partnership or any new partnership which commenced in business in 2022/23.  Failure to register by the deadline can result in HMRC charging a failure to notify penalty.