Latest Tax news

The contents of the Tax and Duty Manual Part 38-04-08 - Guidelines for staff regarding the treatment of unsolicited information received from members of the public – have been incorporated into two other Tax and Duty Manuals. Further information can be found within Revenue eBrief No.147/20. 

Revenue updated the Tax and Duty Manual Part 41A-07-02 - Payment of preliminary corporation tax - to incorporate information previously contained in two other manuals which will be archived. Further information can be found within Revenue eBrief No.146/20. 

Revenue archived a number of manuals relating to Part 41 TCA 1997, which relates to self-assessment up to 2012.  The subject matter is now dealt with in manuals relating to Part 41A TCA 1997, which relates to self-assessment from 2013 onwards. Further information can be found within Revenue eBrief No.184/20.

Revenue published updated statistics for the TWSS. The cumulative cost of the scheme amounts to €2.4 billion. While the weekly cost for the week to 6 August amounted to €111 million. An estimated 370,000 employees are currently being supported by the scheme. 

Tax revenues for July fell by 18.6 per cent or €983 million on the same period last year. The fall is primarily driven by a decline in VAT receipts, but recently published figures show a substantial amount of VAT debt has been warehoused under the tax debt warehousing scheme. Speaking to the Irish Independent earlier in the week Peter Vale, Chair of the CCAB-I Tax Committee, said:"Given that there was evidence of an upturn in consumer spending in the last couple of months, it is difficult to gauge how much of today's drop in VAT receipts reflects declining consumer spending and how much reflects businesses preserving cashflow and electing to defer payments of VAT due."More recently, Revenue confirmed that €1.9 billion of tax debt has been warehoused under the scheme to date, comprised of €1 billion of PAYE Employer debt and €898 million of VAT debt. VAT receipts to end-July are down by over €2.2 billion. This still reflects significantly reduced consumption levels, notwithstanding warehoused VAT amounts.  Cumulatively tax revenues have decreased 2.5 per cent or €791 million, year-on-year. The fall in excise receipts to end-July accounts for €604 million of this cumulative decrease. An Exchequer deficit of over €7.4 billion was recorded to end-July 2020. Minister for Finance, Paschal Donohoe TD, commented:“A deficit of this magnitude underlines the extent of the fiscal challenge we face in placing the public finances on a sustainable and credible trajectory as the economy recovers”. The €8.3 billion year-on-year deterioration is primarily driven by increased voted current and capital expenditure. Total net voted expenditure to end-July amounted to just over €38 billion. The “extraordinary increase” in public expenditure; up 30 per cent on last year, was attributed to “the Government’s commitment to supporting our health service and wider economy”, by the Minister. Further details on the July Exchequer returns can be found on the Department of Finance website. 

Section 12 of the Act provides for the amendment of section 46 VATCA 2010, reducing the standard rate of VAT from 23 per cent to 21 per cent, from 1 September 2020 to 28 February 2021. Where goods and services are supplied in August 2020 by a trade obligated to issue a VAT invoice, and the VAT invoice issues after 31 August, the rate in place in September will apply. Any VAT credit note or debit note relating to a supply of goods or services, which contains a VAT adjustment, should show VAT at the rate in place at the time the original invoice was issued.Further detail can be found within the Revenue press release and manual – Changes in rates of VAT. 

Revenue created a new Tax and Duty Manual to explain certain measures contained within section 10 of the Act.  Section 10 of the Act provides for a number of temporary income tax measures to assist self-employed individuals carrying on a trade or profession, who have been adversely impacted by COVID-19 restrictions. Under section 10 of the Act:Self-employed individuals can claim to have 2020 losses and certain unused capital allowances carried back and set off against profit for the year of assessment 2019. The total amount, which may be carried back, is limited to €25,000 per individual taxpayer. An additional limit applies for individuals subject to the High-Income Earner Restriction.Self-employed individuals can accelerate the above relief and make an interim claim based on estimated amounts during the year. The new manual Part 12-01-03 provides guidance on the measures outlined above and also outlines the following on  interim claims relief;Initially interim claims can be made via MyEnquiries, by submitting a letter, the template for which is included in the new manual. Once the interim claim is received, the relief due will be given by amending the taxpayer’s Form 11 tax return for 2019. Accordingly, the Form 11 for 2019 must be filed to avail of the relief. Individuals will be able to revise their interim claim upwards or downwards as the year progresses. A final claim must be included in the Form 11 tax return for 2020, which is due in October 2021. Individuals should take a practical proportionate approach to quantify their relief.  A suggested method for taxpayers to use and document in calculating the relief is included in the new manual. The taxpayer must be fully compliant, in that they must have complied with their obligations under tax legislation in relation to filing returns and paying taxes. Individuals who qualify for tax debt warehousing or have a PPA for non-COVID-19 tax debt will still be regarded as tax compliant.In addition, section 10 of the act provides an option to individual farmers to step out of income averaging for the tax year 2020, notwithstanding that the farmer may also have stepped out of income averaging in one of the four preceding tax years. The manual Part 23-01-34 - Averaging of farming profits - has been updated to include guidance on this measure. 

Revenue created a new Tax and Duty Manual to provide guidance on the temporary acceleration of corporate tax loss relief for accounting periods affected by the COVID-19 pandemic and related restrictions. Section 11 of the Act provides for the relief through the introduction of section 396D TCA 1997. It allows companies to estimate their trading losses for certain accounting periods and allows the carry back of up to 50 per cent of those losses on an accelerated basis. Ordinarily, a claim to carry-back trading losses can only be made after the end of the accounting period, in which the loss is incurred and following the filing of a tax return for that period. However, section 396D TCA 1997, now allows for the acceleration of this loss relief through interim claims. Companies must be tax compliant and must have incurred or expect to incur a trading loss in an accounting period which includes some or all of the period from 1 March 2020 to 31 December 2020. An interim claim can be made as early as 4 months after the beginning of the accounting period. In order to be eligible for an interim claim, the company must be fully compliant, in that they must have complied with their obligations under tax legislation in relation to filing returns and paying taxes. Companies who qualify for tax debt warehousing and/or have a PPA for non-COVID-19 tax debt will still be regarded as tax compliant.Revenue have introduced temporary procedures for submitting an interim claim:The Form CT1 for the preceding accounting period, for which the estimated losses are being carried back to must be filed.The claim for accelerated loss relief can then be made by amending the Form CT1 for the preceding accounting period through ROS. A note in the Additional Notes section of the Form CT1 must be included in the amended Form CT1, notifying Revenue that the claim is an interim claim under section 396D. A template note has been included in the appendix of the new manual. You must wait at least one day between filing the Form CT1 and amending it for the accelerated loss relief claim. A company will be able to revise an interim claim upwards or downwards as the specified accounting period progresses and up to 5 months after that period ends. Further guidance on the acceleration of corporate tax loss relief can be found in the manual Part 12-03-05.  

Section 2 of the Act provides for the new Employment Wage Subsidy Scheme (EWSS). The EWSS will replace the Temporary Wage Subsidy Scheme (TWSS) from 1 September. We understand that Revenue are currently drafting guidance for the EWSS and expect the facility for employer registrations to be available later in August. Revenue published a webpage on the EWSS. The webpage sets out the qualifying criteria for employers and additional information relating to the scheme. Revenue have clarified that claims for new hires and seasonal employees can be backdated to 1 July 2020. Payments for July and August are expected to be made by Revenue in mid-September.Revenue highlighted in its recent press release, that unlike the TWSS, employers must have a tax clearance certificate to be eligible to join the EWSS. Meaning the employer must have complied with their obligations under tax legislation in relation to filing returns and paying taxes. Employers who qualify for tax debt warehousing and/or have a PPA for non-COVID-19 tax debt will still be regarded as tax compliant. Employers must maintain this tax compliance status through the course of the scheme to continue receiving EWSS benefit.Chartered Accountants Ireland will host a wage subsidy scheme webinar with Revenue on 26 August. You can register through the webinar webpage.  

In one of the most important consultations for many years, HMRC is exploring potential options to regulate the UK tax profession in its consultation “Call for evidence: raising standards in the tax advice market”. The NI Tax Committee will be responding to this consultation which closes on 28 August 2020. The call for evidence asks for views and evidence on several issues including: the scope of the market for tax advice and services; the characteristics of good and bad practice; current government interventions; international models; and possible approaches to raising standards. The Committee is particularly interested in hearing your views on the potential options set out by HMRC on pages 28-32 of the consultation. The full list of consultation questions is also available for your feedback. Please contact Leontia Doran by Monday 17th August 2020. The NI Tax Committee’s work in this area will aim to ensure the Institute’s brand is both protected but also appropriately recognised by HMRC and is not devalued in any way. The Committee is also clear that the impact on regulation of our members should be minimal. 

Section 6 of the Act provides for the introduction of section 1080A TCA 1997. This section introduces a reduced interest rate of 3 per cent per annum that will apply for outstanding non-COVID-19 tax debts, where the taxpayer agrees a phased payment arrangement (PPA) with Revenue before 30 September 2020. Revenue’s new Information booklet also provides guidance on this provision.  The 3 per cent rate is available across all tax types and to existing PPAs already in place with Revenue before September. The reduced rate applies to projected interest for the lifetime of the payment arrangement. Almost €90 million in outstanding taxes is being paid by way of PPA, currently. Revenue will contact existing PPA customers to ensure they benefit from the revised rate. Applications for PPAs can be made through the ROS phased payment facility. Alternatively, contact the Collector-General’s Division on 01-738663. The online application and PPA process has been simplified allowing for: Application without requirement to supply a full suite of supporting documentationIncreased repayment term of up to 60 monthsAbility to defer payments for up to 12 monthsBusinesses availing of the reduced interest rate for non-COVID-19 debts will qualify for a tax clearance certificate if they otherwise meet the normal qualifying conditions. A tax clearance cert will not be available to taxpayers who do not have a PPA in place for outstanding non-COVID-19 debts, which will preclude their entry to the Employment Wage Subsidy Support Scheme (EWSS). Further information on the terms of the scheme can be found in Revenue’s new Information booklet. 

HMRC’s Coronavirus Job Retention Scheme  (“CJRS”) guidance has been updated in recent weeks as set out below. Members can visit our dedicated CJRS page, which also provides guidance on the scheme. Download our factsheet on the who, what, where, when and why of the scheme.  Recent changes to guidance The following guidance changes related to the CJRS1 scheme up to and including 31 July 2020:-         Page title  Changes  2  Check if you can claim for your employee's wages through the Coronavirus Job Retention Scheme   Additional line on complaints procedure in the ‘Contacting HMRC’ section: “If you think that there have been mistakes or unreasonable delays caused by HMRC, you can use our complaints process(link)” 6  Claim for wages through the Coronavirus Job Retention Scheme  Moved the information about overclaiming and underclaiming from the claim page to a new guide  Created a new heading closer to the green button to tell users what they need to do if they’ve claimed the wrong amount and linked to the new guide 13 If you claim too much or not enough This is a new guidance page and the section has been moved from “Claim for wages through the Coronavirus Job Retention Scheme“ page Amended this section to make clear the overclaim and underclaim process and new information on the obligation to notify HMRC for overclaims. A link to a factsheet with information about assessment and penalties relating to overclaims. An amendment to the wording to make clear the need to continue to pay employees the correct amount in the event of an underclaim. An additional line to make clear after 31 July you will no longer be able to amend a claim relating to the period up to 30 June to add an employee that should have been included on a claim submitted before that date.  The following pages have been updated mainly to delete CJRS1 scheme information, as you are no longer able to apply for CJRS1 claims (31 July deadline):  Check which employees… https://www.gov.uk/guidance/check-which-employees-you-can-put-on-furlough-to-use-the-coronavirus-job-retention-scheme  Find examples… https://www.gov.uk/government/publications/find-examples-to-help-you-work-out-80-of-your-employees-wages  Individuals you can claim for who are not employees https://www.gov.uk/government/publications/individuals-you-can-claim-for-who-are-not-employees  Check if your employer https://www.gov.uk/guidance/check-if-you-could-be-covered-by-the-coronavirus-job-retention-scheme  Steps to take https://www.gov.uk/guidance/steps-to-take-before-calculating-your-claim-using-the-coronavirus-job-retention-scheme  Calculate how much you can claim… https://www.gov.uk/guidance/calculate-how-much-you-can-claim-using-the-coronavirus-job-retention-scheme  Check if you can claim https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme The CJRS guidance has been updated as follows from 7 August 2020:  Page title  Changes 1 Check if your employer can use the Coronavirus Job Retention Scheme (Employee Page) Added a new line to clarify that supply teachers are eligible for the scheme in the same way as other employees and can continue to be claimed for during school holiday periods provided that the usual eligibility criteria are met.  Added a new line to set out that if furloughed employee is made redundant, they are entitled to receive redundancy pay based on their normal wage and not on the reduced furlough rate.  3 Check which employees you can put on furlough to use the Coronavirus Job Retention Scheme Added a new line to clarify that supply teachers are eligible for the scheme in the same way as other employees and can continue to be claimed for during school holiday periods provided that the usual eligibility criteria are met.  Added a new line to set out that if furloughed employee is made redundant, they are entitled to receive redundancy pay based on their normal wage and not on the reduced furlough rate.  5 Calculate how much you can claim using the Coronavirus Job Retention Scheme Added a new subsection setting what to do if your fixed pay employee has worked enough overtime (in the tax year 2019 to 2020) to have a significant effect on the amount you need to claim. 6 Claim for wages through the Coronavirus Job Retention Scheme Adjusted to emphasise that, with regard to providing NINOs, employers should only contact HMRC if the employee has a temporary number or genuinely does not have one at all.  Additional line added on the importance of submitting correct data when making a claim.  9 Examples of how to calculate your employees' wages, National Insurance contributions and pension contributions Figures in example 2.1 corrected in the second step of both calculations.   Employer contributions commenced from 1 August 2020 Readers are reminded that from 1‌‌‌ ‌August 2020 the scheme no longer funds employers’ National Insurance (NIC) and pensions contributions for furloughed employees. Employers have to make these payments from their own resources.  From 1‌‌‌ ‌September 2020 employers will have to start contributing to the wages of furloughed employees. Grants will be for 70% of usual wages in September and 60% in October, but furloughed employees will continue to be entitled to receive at least 80% of their usual wages. Employers will have to make up the difference from their own resources. Are you or your clients claiming for 100 or more employees? Please use HMRC’s standard template to submit employees’ details. It is important that you or your clients submit the correct data (including NIC numbers) in the correct format. You can find the template on GOV‌.UK by searching ‘Job Retention Scheme template download’. Looking for help to work out your claim? Use HMRC’s online calculator to help you calculate your next claim. You can find this and guidance on how to use it by searching ‘calculate how much you can claim using the Coronavirus Job Retention Scheme’ on GOV‌.UK. Claimed too much in error? If you or your client have claimed too much for a CJRS grant and have not repaid it, you must notify HMRC and repay the money by the latest of whichever date applies below: 90 days of receiving the CJRS money you or your client are not entitled to; or 90 days of when circumstances changed so that you or your client were no longer entitled to keep the CJRS grant; or 20 Oc‌to‌be‌r 2020 if you received CJRS money you’re not entitled to, or if your circumstances changed, on or before 20 J‌ul‌y. Failure to do so may resuly in HMRC charging a penalty. How to let HMRC know about claiming too much You or your clients can let HMRC know as part of your next online claim without needing to call – the system will prompt you to add details on if you have received too much. If you or your clients have received too much and do not plan to submit further claims – or you have claimed less than you were entitled to – please contact HMRC to rectify. The key message from HMRC is that it is aiming to support taxpayers while tackling serious fraud and criminal attacks. HMRC understands that mistakes happen, particularly in these challenging times, and will not seek out innocent errors and small mistakes for compliance action. However HMRC are contacting a number of employers at the moment to check that they have claimed the correct amount. For more information, search for 'if you claim too much or not enough from the Coronavirus Job Retention Scheme' on GOV‌.UK. National Insurance numbers Employers need to provide a National Insurance number (NINo) for all employees as part of their CJRS claim. The only exception is in the very limited circumstances where an employee genuinely does not have a NINo, for example if they are under 16 years old. If you are claiming for an employee whose NINo you don’t currently know, you can check their number by searching GOV.UK for 'Check a National Insurance Number using basic PAYE Tool'. HMRC can no longer accept claims for fewer than 100 employees by phone where employers do not have all employee NINos, unless the employees they are claiming for genuinely do not have these. Protect yourself from scams Stay vigilant about scams which may mimic government messages as a way of appearing authentic and unthreatening. Search 'scams' on GOV‌‌‌‌.UK for information on how to recognise genuine HMRC contact. You can also forward suspicious emails claiming to be from HMRC to phishing@hmrc.gov.uk and texts to 60599.