Latest Tax news

In Irish news, Revenue provides a new Share Reporting Obligation Hub and publishes new guidance regarding employers’ reportable benefits. In UK news, we examine the remaining tax aspects of the Spring Budget and HMRC has updated its Agent Standard. On the International front, the OECD publishes its Fifth Peer Review Report on Treaty Shopping.  Ireland A new Share Reporting Obligation Hub on Revenue's website is now live. Revenue has published guidance regarding the requirement for employers to return details of certain payments/benefits, which are made without the deduction of tax, to employees (including directors).  UK In several stories, we examine the remaining tax aspects of the Spring Budget. HMRC has updated its Agent Standard. International The OECD has published its Fifth Peer Review Report on Treaty Shopping.   Keep up to date with all the latest Irish, UK, and international tax developments through Chartered Accountants Ireland’s Tax Newsletter. Subscribe to the Tax News by updating your preferences in MyAccount.    

Revenue has updated certain Stamp Duty Manuals to reflect changes brought in by Finance Act 2022. Section 126AA SDCA 1999 relating to the extension of the bank levy to 2023. Read more here. Part 10: Enforcement containing provisions which may apply where there is failure to comply in full with the stamp duty pay and file obligations provided for under the Act.

Revenue has updated several Capital Acquisitions Tax Manuals. Part 10 Favourite Niece/Nephew Relief has been amended to provide a more detailed explanation of the relief. Part 11 Agricultural Relief has been updated to reflect the streamlining of agricultural qualifications introduced in Finance Act 2022. Part 24 Dwelling House Exemption has been amended to clarify that the exemption will not cease to apply if the dwelling house is sold within six years and the full proceeds from the sale are used to purchase a replacement dwelling house.

Revenue has published a new Stamp Duty Manual providing guidance on company reconstructions and amalgamations. Section 80 SDCA 1999 provides for a stamp duty relief on the transfer of certain property where a company undertakes a scheme of reconstruction or amalgamation or undertakes a merger under the Companies Act 2014. The new manual provides comprehensive guidance on the operation of the relief and incorporates previously issued guidance. 

Revenue has amended Tax and Duty Manual on Examinership Caseworking Guidelines. References to the Companies (Miscellaneous Provisions) (COVID-19) Act 2020 - Extension of an Examinership to 150 days (previously 100 days) have been removed. Paragraph 6.4 - Conditions for a Successful Scheme - The manual has been updated to incorporate legislative changes introduced in July 2022 - European Union (Preventative Restructuring) Regulations 2022.  The manual has been updated throughout to provide clarity and to improve readability.

Revenue has updated its Tax and Duty Manual regarding Controlled Foreign Company (CFC) Rules to reflect an amendment introduced by Finance Act 2022. The updated manual refers to section 835YA TCA 1997 and concerns Irish defensive measures in respect of the CFC rules.

Revenue has amended its Tax and Duty Manual regarding filing guidelines for Foreign Account Tax Compliance Act (FATCA). The updated manual provides guidance on the reporting of financial accounts that have no US Taxpayer Identification Number (TIN). Codes published in May 2021 and February 2023 are currently accepted by Revenue validation for the relevant Reporting Periods.

Revenue has updated several chapters of the Pensions Manual to reflect amendments in Finance Act 2022. The updated chapters include benefits on death-in-service, transfer payments, overseas employments and Pan-European pension products (PEPPs).

The Spring Budget contained a number of VAT and duty related measures in specific areas which we cover in detail below. VAT interest and late payment rules Legislation is included in the Spring Finance Bill 2023 to make what is referred to as minor technical changes to the new interest and late payment rules for VAT which took effect for VAT return periods beginning on or after 1 January 2023. These measures have effect:- from 15 March 2023 for late payment interest; from 1 January 2023 for late payment penalties; and from the date of Royal Assent of the Spring Finance Bill 2023, for repayment interest. VAT relief for energy saving materials A call for evidence has been published on options to reform VAT relief for the installation of energy saving materials in the UK. This considers the inclusion of additional technologies and the possible extension of the relief to include buildings used solely for a relevant charitable purpose. Any changes to be made in this area will also apply in Northern Ireland due to the Windsor Framework which has now been ratified by both the UK and the EU. Deposit return schemes Legislation will be introduced to simplify the VAT treatment of deposits charged under a deposit return scheme for drinks containers. Where a deposit is charged on a drink that is within the scope of a deposit return scheme and the container is returned for recycling, VAT will not be applied to the deposit amount. Where the container is not returned for recycling, HMRC will collect the VAT on the unredeemed deposit. DIY housebuilders scheme digitisation project The DIY housebuilders’ scheme will be digitised and the time limit for making claims will be increased from three to six months. No timeframe has been announced as yet for when these particular changes will be introduced.  Services supervised by pharmacists From 1 May 2023, the VAT exemption on healthcare is being extended to include medical services carried out by staff directly supervised by registered pharmacists.   Treatment of patient group directions From autumn 2023, the zero rate on prescriptions will be extended to medicines supplied through patient group directions, which effectively enables some health professionals to administer specified medicines to a pre-defined group of patients, without them having to see a prescriber. Fund management reform Following the consultation on proposed reform of the VAT rules on fund management which closed in February, the government is considering the responses and is continuing to discuss the proposals with stakeholders. The government will publish its response to the consultation in the coming months. Review of the VAT treatment of financial services Building on the recommendations of the Industry Working Group established to consider the future of VAT and financial services, the government will continue to consider possible reforms to simplify the VAT treatment of financial services. Fuel duty For an additional 12 months until 31 March 2024, fuel duty will not increase as planned, hence the temporary 5 pence fuel duty cut will remain in place and the planned increase in line with inflation for 2023/24 will not proceed. According to the Budget publications, the government will continue to keep fuel duty rates in the long term under review. Alcohol duty and alcohol duty reform Alcohol duty will remain frozen until 1 August 2023 when duty rates of all alcoholic products produced in or imported into the UK will increase in line with RPI. From the same date, draught relief (the duty paid on drinks served from pumps) will increase from 5 percent to 9.2 percent for beer and cider draught products and from 20 percent to 23 percent for wine, spirits based and other fermented draught products. The government also intends to legislate, as planned, to reform the duty structure for alcoholic products by creating standardised tax bands based on alcohol by volume. Two new reliefs and transitional arrangements for certain wine products will feature in these changes which will also take effect from 1 August 2023. A policy paper sets out the rates of duty for all categories of alcoholic products in Schedule 6. Stakeholders including producers, importers and resellers of alcoholic products have until 9 April 2023 to submit their views on the draft secondary legislation.  HMRC also intends to harmonise the approval, return and payment processes for domestic producers of alcoholic products. These changes are scheduled to take effect from late 2024 when it is intended that a new digital system will be introduced. Temporary approvals for certain excise regimes The government is legislating for minor technical amendment to temporary approvals which are given to a business seeking a review or appealing against HMRC’s decision to revoke certain excise approvals. HMRC will also be provided with a discretionary power to extend a temporary approval when a business is unsuccessful in overturning HMRC’s decision, which would otherwise end automatically. This will give HMRC the ability to agree a short period for the business to legally dispose of stocks without incurring a penalty. The change will take effect from Royal Assent of the Spring Finance Bill 2023. Gaming duties The gross gaming yield bandings for gaming duty will be frozen from 1 April 2023. Tobacco duties Duty rates on all tobacco products increased by RPI plus 2 percent. The rate on hand-rolling tobacco increased by RPI plus 6 percent and the minimum excise tax increased by RPI plus 3 percent with all these changes taking effect from 6pm on 15 March 2023. Air Passenger Duty (“APD”) APD rates will increase in line with RPI for 2024/25. Short haul international rates remain frozen. Following a 50 percent cut in APD for domestic flights in 2023/24, the rate for domestic flights will increase by 50p to £7. Long haul and ultra-long haul economy rates will increase by £1. Vehicle Excise Duty (“VED”) VED rates for cars, vans and motorcycles will increase in line with RPI from 1 April 2023. To support the haulage sector, VED for heavy goods vehicles will remain frozen in 2023/24.

Revenue has updated its Tax and Duty Manual regarding the High Income Individuals' Restriction to reflect changes to the standard rate band introduced by Finance Act 2022. The manual sets out that, in the case of jointly assessed couples with two income sources, for the year of assessment 2023, the amount by which the standard rate band may be increased is equal to the lesser of: the lower earner's specified income, and €31,000.

Under the heading of “tackling the tax gap”, a number of measures featured including doubling the maximum sentence for the most egregious cases of tax fraud from seven to 14 years. HMRC’s debt management capability The government is investing £47.2 million in order to improve HMRC’s capability to collect tax debts. This is also designed to allow HMRC to better distinguish between taxpayers who can afford to settle their tax debts but choose not to, from those who are temporarily unable to pay. Support will continue to be provided to taxpayers who are temporarily unable to pay by enhancing the online Self-Serve Time To Pay service, whilst also providing HMRC with additional capacity to ensure that those who can afford to settle their debts do so. Tackling promoters of tax avoidance The government intends to consult on the introduction of a new criminal offence for promoters of tax avoidance who fail to comply with a legal notice from HMRC to stop promoting a tax avoidance scheme. This will also examine expediting the disqualification of directors of companies involved in promoting tax avoidance, including those who exercise control or influence over a company. Self-Assessment for cryptoassets The government is introducing changes to Self-Assessment tax return forms requiring amounts in respect of cryptoassets to be identified separately. The changes will be introduced on forms from the tax year 2024/25. Capital gains assessment time period An avoidance loophole which can leave HMRC out of time to assess tax due on capital gains when an asset is disposed of under an unconditional contract is being closed. The changes will apply in relation to contracts entered into on or after 1 April 2023 for corporation tax and 6 April 2023 for capital gains tax.

Revenue has updated its Tax and Duty Manuals concerning the taxation of Offshore Funds. The updated manuals include a non-exhaustive list of general legal and regulatory criteria that should be considered to assist in establishing whether an offshore fund may be considered ‘similar in all material respects’ to an Irish fund. The manuals are also updated for amendments introduced by recent Finance Acts: Finance Act 2022 – clarification of the tax treatment of an authorised unit trust. Finance Act 2020 – clarification of the interaction of the offshore fund legislation with respect to the migration of Irish securities from the CREST system to Euroclear Bank in March 2021 following BREXIT. Further information is available in eBrief no. 081/23.