Revenue has updated guidance regarding individuals described as ‘locums’ engaged in the fields of medicine, health care and pharmacy. The Tax and Duty Manual now refers to the revised Code of Practice on Determining Employment Status published in July 2021. Further detail is available in eBrief 125/22.

Revenue has updated its Tax and Duty Manual reflecting Finance Act 2021 amendments to the scheme of accelerated capital allowances available for gas vehicles and refuelling equipment. The scheme is extended to 31 December 2024 and capital expenditure incurred on or after 1 January 2022 on certain hydrogen vehicles and related refuelling equipment qualifies for the accelerated allowances.

Revenue has updated its Tax and Duty Manual to provide additional clarity for employed persons taking care of incapacitated individuals on the interaction between the tax relief available under sections 465, 466 and 467 TCA 1997. The computational examples throughout the guidance have also been updated to reflect the position for the current year of assessment.

In its 2023 pre-Budget submission, the Institute, under the auspices of the CCAB-I, has called for an overhaul of the personal tax allowance system to enhance those available to younger workers. Also among the asks is parity in the treatment of corporate and individual landlords to stem the flow of available rental property from the market. In a statement following the submission, the CCAB-I said that tax measures that support individuals and make Ireland an attractive place to live and work are critical to protect Ireland’s competitiveness particularly in the current challenging environment.   Read the submission in full here. The submission was covered widely in the media (see In the Media section below).

The Republic of Congo recently joined the international fight again tax evasion becoming the 165th member of the Global Forum on Transparency and Exchange of Information for Tax Purposes. Maria José Garde, char of the Global Forum, commented that “[t]he regular enlargement of the Forum’s membership highlights the importance given to tax transparency by the international community, and the resolve of governments to come together to fight and prevent tax evasion and avoidance." Read the full press release at www.oecd.org.

The OECD published its Analytics Maturity Model report recently. The report is part of the OECD Tax Administration Maturity Model Series and sets out descriptions of capabilities and performance in particular functions or sets of activities carried out by tax administrations across five discrete maturity levels. The intention of this series is to provide tax administrations globally with a tool to allow them to self-assess their current level of maturity and to facilitate consideration of future strategy, depending on a tax administration's unique circumstances and priorities.

The OECD recently published its annual report on global trends in tax administration. Tax Administration 2022 provides data comparing trends across tax administrations in 58 advanced and emerging economies. The report is intended to inform and inspire tax administrations as they consider their future operations, as well as to provide information on global tax administration trends and performance for stakeholders and policy makers. The report is structured around nine chapters that examine the performance of tax administration systems, using an extensive data set and a variety of examples to highlight recent innovations and successful practices. Read the full press release at www.oecd.org.

HMRC’s interest rate for late payments of tax is increasing once again, starting today for quarterly instalment payments of corporation tax, following the recent Bank of England interest rate rise to 1.25 percent. The rate of interest on late payment of most taxes will increase from 3.5 percent to 3.75 percent. The repayment interest rate remains unchanged at 0.5 percent. The increase takes effect as follows:- Today, 27 June 2022 for late quarterly instalment payments of corporation tax; and 5 July 2022 for late non-quarterly instalments payments of corporation tax and other taxes.

HMRC’s light touch approach to compliance with the off-payroll working (“OPW”) rules, commonly known as IR35, ended on 6 April 2022. However, a recent report by the Public Accounts Committee (“PAC”) “Lessons from implementing IR35 reforms” sets out that HMRC needs to demonstrate that the rules can be operated effectively and fairly. The PAC report also stated that “widespread non-compliance” with IR35 tax reforms in central government departments is “not acceptable” after HMRC “rushed implementation of the reforms; provided poor guidance; and public bodies struggled with its tool to assess status”. Prior to 6 April 2022 and except in cases of deliberate non-compliance, HMRC did not impose penalties for OPW inaccuracies before this date. From 6 April 2022, HMRC is expected to begin enforcing the rules leading to recovery of the relevant PAYE and NIC (and any Apprenticeship Levy) which is due either from the fee payer or the end client where the end client did not take ‘reasonable care’ when determining the status of the relevant engagement.

The latest tax gap data for 2020/21 has been published in HMRC’s annual ‘Measuring Tax Gaps’ report. The tax gap measures the difference between the amount of tax that should, in theory, be paid to HMRC, and what is actually paid. The tax gap is 5.1 percent in 2020/21 or £32 billion. According to HMRC, the 2020/21 tax gap estimates are affected by COVID-19 and therefore subject to more uncertainty than usual so there is the possibility of future revisions. Key findings are as follows:- The tax gap for Income Tax, National Insurance contributions and Capital Gains Tax is 3.5 percent (£12.7 billion) in 2020/21, which is the biggest share of the total tax gap by type of tax; and The VAT gap, which is the second biggest share of the total tax gap by tax type, decreased from 8.5 percent (£12.5 billion) in 2019/20 to 7 percent (£9 billion) in 2020/21. The tax gap publication excludes estimates of error and fraud in the COVID-19 support schemes. Updated estimates of COVID-19 error, and fraud will be published in HMRC’s annual report and accounts for 2021/22.  The tax gap report also breaks down the tax gap by taxpayer group however, as some judgement and assumptions are involved, the report explains that these estimates are subject to uncertainty, which cannot be accurately quantified. According to the 2020/21 report, small businesses accounted for 48 percent (£15.6 billion) of the tax gap, whereas wealthy taxpayers and individuals accounted for the smallest share of the tax gap at 5 percent (£1.5 billion) and 8 percent (£2.5 billion) respectively.  

Last week, HMRC launched one of two expected consultations as part of its project on raising standards in the tax advisers’ market. The current consultation “Raising standards in tax advice: protecting customers claiming tax repayments” aims to address concerns previously raised by taxpayers and stakeholders, including Chartered Accountants Ireland, about repayment agents. Views are being sought on how HMRC can protect and inform people who use specialist repayment agents to claim a tax refund. The consultation will run for 12 weeks to 14 September 2022. You can share your views by emailing repaymentsconsultation@hmrc.gov.uk or completing a survey. Specifically, views are being sought on:- Restricting the use of assignments, where the legal right to a repayment transfer from a taxpayer to an agent; Introducing measures designed to ensure taxpayers see material information about a repayment agent’s service before entering into a contractual agreement; and Requiring repayment agents to formally register with HMRC.

In this week’s EU exit corner, we bring you the latest guidance updates, news and publications relevant to EU exit. See also the most recent EU exit bulletin which features every Friday in Chartered Accountants eNews. The first meeting of a new HMRC forum also took place last week which will be examining the impact of future EU VAT changes for VAT registered businesses in Northern Ireland. Chartered Accountants Ireland is a member of the forum and will keep members updated. Miscellaneous updated guidance etc. The latest guidance updates, news and publications relevant to EU exit are as follows:- Search the register of customs agents and fast parcel operators; Get someone to deal with customs for you; Separation Agreement Joint Committee between the UK and EEA EFTA states: joint statement from the third meeting; UK-EEA EFTA Separation Agreement: Joint Committee; Notices made under the Customs (Import Duty) (EU Exit) Regulations 2018; Specialised Committee on Citizens’ Rights: agenda; Export or move livestock and poultry; Export horses and ponies: special rules; EU Settlement Scheme: applicant information; EU Settlement Scheme: community support for vulnerable citizens; Specialised Committee on Citizens’ Rights; and Customs declaration completion requirements for Great Britain.

This month’s tidbits cover a new HMRC manual on the residential property developer tax and the latest guidance in several areas.

HMRC’s latest schedule of webinars is now available for booking. Spaces are limited, so take a look now and save your place. HMRC’s has also made available a YouTube video which contains an overview of how to report COVID-19 support payments and grants on Company Tax Returns, what happens if you’ve claimed too much and the records that must be kept. If you have any questions, please send them to team.agentengagement@hmrc.gov.uk prior to the webinar, including the title of the webinar in the ‘Subject’ line of your email. HMRC will answer as many as possible on the day. Making Tax Digital for VAT: register here This webinar will provide some of the basics of Making Tax Digital for VAT. This includes what has changed, using software and keeping digital records, plus an introduction to penalty reform. From April 2022, these requirements apply to all VAT-registered businesses, to include those that have a turnover below the VAT threshold.

Do you use HMRC online services? Don’t be caught out by the planned downtime to some services. HMRC are warning about the non-availability of specific services on the HMRC website, a range of services are impacted. Check the relevant page for information on planned downtime.

Check out the latest items on the Agent Forum. Remember, in order to view each item, you must be signed up and logged in. All agents, who are a member of a professional body, are invited to join HMRC’s Agent Forum. This dedicated Agent Forum is hosted in a private area within the HMRC’s Online Taxpayer Forum. You can interact with other agents and HMRC experts to discuss topical issues and processes. HMRC’s latest update on the agent forum is also available in addition to the May 2022 Digital Services update which features the latest on Making Tax Digital and cyber security.

At a recent meeting with Revenue, officials confirmed that agents should have access to Customs and Excise (C&E) weekly printouts for imports through ROS in Quarter 3 of 2022. Traders already have access to these reports. We will keep readers updated.

On 20 June 2022, the TSS launched a new Assisted Completion Service which provides additional support for traders submitting Supplementary Declarations using the TSS Portal. It is specifically for goods’ movements from Great Britain to Northern Ireland, either directly or via Ireland. When using the Assisted Completion Service, a TSS agent will complete up to 5 Supplementary Declarations per month on behalf of traders and it is hoped that this will ease any technical difficulties or teething issues when dealing with unfamiliar customs terms and procedures or the TSS declaration process. The Assisted Completion service is available to all traders using TSS and traders can take advantage of the service to support with the completion of up to 5 Supplementary Declarations per month. However Supplementary Declarations with a Tax Point Date over 330 days old are not supported and Supplementary Declarations made using an agent or intermediary are excluded. To use the service, traders should ask for assisted completion of one of their Supplementary Declarations directly on the TSS Portal or by phoning the TSS Contact Centre. Further information can be found here.

From 19 June 2022, the deadline for the submission of Supplementary Declarations changed to 9pm on the fourth working day of the month following the goods movement. This is three hours earlier than the previous deadline of midnight on the same day. The new deadline will enable the Trader Support Service (TSS) to automatically create the Final Supplementary Declaration report on behalf of traders, helping to fulfil all customs declaration requirements set out by HMRC. Any Supplementary Declarations submitted after the 9pm deadline will be reported as late on the Final Supplementary Declaration report submitted to HMRC for that month. A banner will appear each month on the TSS Portal as a reminder of the new deadline. All guidance on NICTA has been updated to highlight the new submission time. More information can be found in the latest Trader Support Service Bulletin.  

The EU’s IORP II Directive is drastically changing the landscape of pension plan management and trustees. But what are the changes, and what are the impacts of these regulations? Munro O’Dwyer dives in. The IORP II Directive (IORP II) is reshaping the management of pension plans and represents a perfect opportunity for employers to challenge the status quo. Employers are rethinking how they can deliver a quality pension plan that makes a real impact for employees with a focus on design, performance and support. The status quo The management of pension plans involves time, resources and money. The ultimate responsibility lies with the trustees, whose fiduciary duty is to act in the interests of the pension scheme members. Employers, as sponsors, will nevertheless have a vested interest in the overall management of the plan and the appointed service providers. In an IORP II world, we will see the need for more trustee and subcommittee meetings, newly established risk and internal audit functions, own risk assessments, assessments of fitness and probity, and a comprehensive suite of policies and procedures that must be maintained. Employers must also factor in the additional time needed to prepare for supervision and/or intervention by the Pensions Authority as it rolls out its inspections. The additional level of work—and possibly cost—required to coordinate these services should not be underestimated. This cost will be borne on top of the usual annual compliance costs that come with benefit statements, the trustees' annual report and accounts, audit and European Central Bank (ECB) reporting, for example. This begs the question: could an alternative approach to managing pension plans be at least as, if not more, effective? Employers deciding to transition to a master trust see the change as a means to revisit their pension governance model. A new (and improved?) governance model So, what would pension plan management look like in a model where all the regulatory burden is dealt with by a master trust? In brief, very different. Let's consider some of the key differences: 1. Outsourced regulatory compliance This is fully outsourced to the master trust trustee board, which is supported by advisors from the master trust founder. The trustees will oversee compliance, and the Pensions Authority will look to regulate master trusts closely as they continue to scale. 2. Reduced regulatory workload There would be an immediately reduced workload as services are bundled through the master trust. For example, there would no longer be a requirement to produce an audited trustee annual report and accounts. Nor would there be ECB reporting requirements or a need to appoint key function holders – all of which would be addressed by the master trust. 3. Monitoring and oversight This takes on a new light as a newly established pension committee can focus on the performance of the pension arrangement and the benefit it is delivering for employees and pension scheme members. Employers can spend time creating a pension proposition for staff and ensuring that the master trust remains market-competitive. 4. Clear separation In a master trust framework, there can be a greater division between those providing the advice and those providing the solution. This avoids potential conflicts of interest and allows for a more independent monitoring framework, which can be created through an employer-established, non-statutory pension committee. The reduced regulatory workload allows for the time invested in supporting pension provision to be focused on the employee experience – ensuring that communication programmes are tailored, that engagement levels are high and that the pension arrangements are delivering the outcomes expected. There is now an opportunity for employers to challenge the status quo and rethink how their pension plans will be managed. In doing so, it could bring about positive change for all stakeholders. Munro O'Dwyer is Pensions Partner at PwC.