Latest Tax news

  This week, in Irish stories, read details of the Temporary Wage Subsidy Scheme’s extension to maternity and adoptive leave employees. In UK developments, details of changes to the Job Retention Scheme, which take effect from 1 July 2020, were recently announced. In International news, the OECD says tax administrations have an important role in planning the recovery from the impact of COVID-19.      Ireland Temporary Wage Subsidy Scheme now applies to maternity and adoptive leave employees. Read more The rate of expense relief has increased for kidney patients for 2019 and 2020 UK Take a look at the Job Retention Scheme changes set to take affect from 1 July 2020 Are you planning to defer your next VAT payment due on 7 June? Read what action you need to take in order to do so International The OECD says tax administrations have an important role in planning the recovery from the impact of COVID-19. Read more  

The NI Tax Committee regularly engages with the Law Society of NI on matters of common interest. Recently the Law Society shared with us two documents which may be of interest to members:- Guidance on the execution of wills during the pandemic; and The First-tier Tribunal (Tax Chamber) COVID-19 response to reports of Delays etc.

Last week, the Chancellor announced plans to extend the Self-Employment Income Support Scheme (“SEISS”) for anyone self-employed whose trade is, adversely affected by COVID-19. Eligible self-employed people will be able to claim a second and final SEISS grant in August 2020. This will be a taxable grant worth 70 per cent of their average monthly trading profits for three months, paid out in a single instalment and capped at £6,570 in total. The eligibility criteria for the second grant will be the same as for the first grant. In addition, people do not need to have claimed the first grant in order to claim the second. Claims for the first SEISS grant, which opened on 13‌‌ May, must be made no later than 13‌‌ July 2020. Eligible self-employed must make a claim before that date to receive the first SEISS grant (a taxable grant of 80 per cent of their average monthly trading profits, paid out in a single instalment covering 3 months' worth of profits, and capped at £7,500 in total). It's really important to note that as with the first SEISS grant, the eligible individual must make the claim themselves. If you attempt to make a claim on behalf of your client, this will trigger a fraud alert and will result in significant delays to payment. However, you can help to prepare your clients by ensuring they have the relevant information ready. Once again, HMRC will calculate the amount of self-employment support individuals will receive, they don’t need to do this themselves. More information about the second SEISS grant will be available on GOV.‌‌UK on 12‌‌ June. In the meantime, please help reach those self-employed people who could benefit from a SEISS grant now, by encouraging anyone you think might be eligible for the first grant but hasn’t yet made a claim to do so before 13‌‌ July.  

Readers are advised to ensure they are using the latest coronavirus job retention scheme (“CJRS”) guidance. Bookmark the relevant links and print a copy of the guidance which applied at the time a claim for the CJRS grant is made. Details of last week’s guidance updates received from HMRC are set out. Page title Changes made 1 Check if your employer can use the Coronavirus Job Retention Scheme Added headline box that reflects key points from Chancellor’s announcement last week. Removed outdated text on the extension of the scheme. 2 Check if you can claim for your employee's wages through the Coronavirus Job Retention Scheme Added headline box that reflects key points from Chancellor’s announcement last week. Removed outdated text on the extension of the scheme. 3 Check which employees you can put on furlough to use the Coronavirus Job Retention Scheme Added headline box that reflects key points from Chancellor’s announcement last week. Added further detail on what duties pension trustees can undertake whilst on furlough. Added detail on CJRS eligibility in cases where TUPE would have applied were it not for the company being in compulsory liquidation. 4 Work out 80 per cent of your employees' wages to claim through the Coronavirus Job Retention Scheme' Added headline box that reflects key points from Chancellor’s announcement last week. 5 Examples for ‘Work out 80 per cent of your employees' wages to claim through the Coronavirus Job Retention Scheme’ Errors in example 1.5 corrected Error in example 1.6 corrected Errors in example 3.3. corrected 6 Claim for wages through the Coronavirus Job Retention Scheme Added headline box that reflects key points from Chancellor’s announcement last week. 7 Reporting employees' wages to HMRC when you've claimed through the Coronavirus Job Retention Scheme Added headline box that reflects key points from Chancellor’s announcement last week.

With the next VAT deadline date of 7 June 2020 fast approaching, we remind readers of the process for those who wish to utilise the COVID-19 VAT payment deferral announced by the Chancellor in March. There's no need to apply for a deferral BUT: You are still required to file a return through the normal route, including Making Tax Digital if applicable; and Direct Debit payers will need to cancel their direct debit with their banks. If they don’t HMRC will still request payment. There is no automatic deferral of Direct Debit payment. The GOV.UK guidance is here: https://www.gov.uk/guidance/deferral-of-vat-payments-due-to-coronavirus-covid-19  

Last week, the Chancellor announced more details on the expected changes to the coronavirus job retention scheme (“CJRS”) and also announced that the flexibility element would begin from 1 July 2020, and not 1 August 2020 as announced a few weeks ago. The changes announced are as follows: - Part-time furloughing - from 1‌‌ July 2020, the scheme will be made more flexible to enable employers to bring previously furloughed employees back part time and still receive a grant for the time when they are not working Employer contributions - from 1‌‌ August 2020, employers will have to start contributing to the wage costs of paying their furloughed staff. This employer contribution will gradually increase in September and October; and The scheme will close to new entrants from 30‌‌ June. Part-time furloughing From 1‌‌ July 2020, businesses using the scheme will have the flexibility to bring previously furloughed employees back to work part time – with the Government continuing to pay 80 per cent of wages for any of their normal hours they do not work up until the end of August. This flexibility comes a month earlier than previously announced and is aimed at helping people get back to work. Employers will decide the hours and shift patterns their employees will work on their return, and will be responsible for paying their wages in full while working. This means that employees can work as much or as little as the business needs, with no minimum time that they must furlough staff for. Any working hours arrangement agreed between a business and their employee must cover at least one week and be confirmed to the employee in writing. When claiming the CJRS grant for furloughed hours, employers will need to report and claim for a minimum period of a week. They can choose to make claims for longer periods such as on monthly or two weekly cycles if preferred. Employers will be required to submit data on the usual hours an employee would be expected to work in a claim period and actual hours worked. If employees are unable to return to work, or employers do not have work for them to do, they can remain on furlough and the employer can continue to claim the grant for their full hours under the existing rules. Employer contributions From August, the CJRS grant provided through the scheme will be slowly tapered. The timeline for the next few months is as follows:-   in June and July, the Government will continue to pay 80 per cent of wages up to a cap of £2,500 in addition to employer National Insurance (ER NICs) and pension contributions for the hours the employee doesn’t work and is on furlough. Employers will have to pay employees in the usual way for the hours they work; in August, the Government will continue to pay 80 per cent of wages up to a cap of £2,500 but employers will pay ER NICs and pension contributions – for the average claim, this represents 5 per cent of the gross employment costs that they would have incurred if the employee had not been furloughed; in September, the Government will pay 70 per cent of wages up to a cap of £2,187.50 for the hours the employee does not work – employers will pay ER NICs, pension contributions and 10 per cent of wages to make up 80 per cent of the total up to a cap of £2,500; and in the final month of the scheme in October, the government will pay 60 per cent of wages up to a cap of £1,875 for the hours the employee does not work – employers will pay ER NICs, pension contributions and 20 per cent of wages to make up 80 per cent of the total up to a cap of £2,500 the cap on the furlough grant will be proportional to the hours not worked. According to the guidance provided by HMRC, many smaller employers have some or all of their ER NICs bill covered by the Employment Allowance so will not be significantly impacted by that part of the tapering of the Government contribution. Around a quarter of CJRS monthly claims relate to wages that are below the threshold where ER NICs and auto enrolment pension contributions are due, hence o no employer contribution will be required for these furloughed employees in August. Important dates It’s important to note that the scheme will close to new entrants from 30‌‌ June 2020. From this point onwards, employers will only be able to furlough employees that they have furloughed for a full three-week period prior to 30‌‌ June. This means that the final date by which an employer can furlough an employee for the first time will be 10‌‌ June in order that the current three-week furlough period be completed by 30‌‌ June. Employers will have until 31‌‌ July 2020 to make any claims in respect of the period to 30‌‌ June 2020. Guidance and support Further support for employers and agents on how to calculate claims with this extra flexibility will be available by next week, including webinars and detailed online guidance.  

Updated instructions to Revenue staff dealing with claims by taxpayers under the European Convention On Human Rights, the European Convention On Human Rights Act 2003 or the Charter of Fundamental Rights of the European Union are new reflected in Tax and Duty Manual Part 38-04-13. A taxpayer may seek to invoke the European Convention On Human Rights, the European Convention On Human Rights Act 2003 or the Charter of Fundamental Rights of the European Union in the course of his or her dealings with Revenue. The claim may be about process or about the law.  The High Court, the Court of Appeal or the Supreme Court may make a declaration that a statutory provision or rule of law is incompatible with the State’s obligations under the European Convention On Human Rights.

Revenue’s Tax and Duty Manual Part 15-01-14, Income Tax relief for Medical and/or Dental Insurance, has been updated to include details on the tax treatment of employer-provided policies by an authorised insurer/tied health insurance agent.  Tax and Duty Manual Part 15-01-14 should be read in conjunction with Covid-19 measures introduced by Revenue on the tax treatment of refunds of healthcare insurance premiums.

The rates of expense relief for electricity, laundry and protective clothing, and telephone costs incurred by kidney patients have increased for 2019 and 2020.  Home dialysis kidney patients and chronic ambulatory peritoneal dialysis (CAPD) patients can claim relief for expenditure up to a certain rate on electricity, laundry and protective clothing and telephone costs. These rates are increased for 2019 and 2020 as reflected in the latest update to Revenue’s Tax and Duty Manual Part 15-01-12.

Childminders caring for the children of Covid-19 essential workers in the child’s own home may still qualify for Childcare Services Relief according to updated Revenue guidance.  Childcare Services Relief is an income tax exemption available to individuals who provide childminding services in their own homes. Current HSE guidance provides that, as part of Covid-19 measures, childminding should only happen in the home of the child. Revenue’s updated Tax and Duty Manual, Part 07-01-29 says that a childminder providing care to children of essential workers in the home of the child will still qualify for Childcare Services Relief on a temporary basis

Up to three thousand taxpayers may have given fraudsters access to bank and credit card details linked to their MyAccount records by responding to a fake text message purporting to be from Revenue.  Revenue confirmed that it has written to approximately 3,000 taxpayers advising them that, as a result of information provided by taxpayers as part of a text scam, personal details held in the user profile of their Revenue myAccount may have been accessed by the fraudsters.  The letters say that Revenue temporarily deactivated impacted taxpayers’ ‘myAccount’ access. Taxpayers impacted should contact their bank to cancel/change any accounts or credit cards that may have been provided to the fraudsters.  The Department of Employment Affairs and Social Protection should also be contracted if taxpayers have concerns that their PPSN may be compromised.

A tracking system for MyEnquiries will be available from Monday, 15 June. The tracking system will allow accountants and tax agents to view the current status of an enquiry submitted via MyEnquiries. Chartered Accountants Ireland under the auspices of the CCAB-I is working with Revenue though the TALC forum to improve the MyEnquiries service.  The tracking system will allow accountants and tax agents to track the progress of an enquiry by viewing a new ‘Status’ column on the ‘Enquiries Record’ screen within MyEnquiries (accessed by logging into ROS/myAccount). The Enquiries record will take the following form: Status Description Pending Indicates the enquiry has been received by Revenue and will be routed into a queue for working. In Progress Indicates that the enquiry is in a queue to be processed. Completed Indicates that the enquiry has been completed by Revenue. Awaiting Feedback Indicates that Revenue has requested something from the customer and is waiting on a reply. Revenue Initiated Indicates the message was sent from Revenue.   The tracking system will also give information about which Revenue division the enquiry is being processed in.  Full details on the new tracking system are expected to issue from Revenue in the near future.