In Irish news this week, the Fiscal Monitor for February 2025 has been published and the Angel Investor Relief scheme has commenced. In UK news, HMRC wants your feedback on the Agent Online Forum and read about the Northern Ireland Tax Committee’s meeting with HMRC’s Making Tax Digital team. In International news, the Directorate-General for Taxation and Customs Union has released updated guidance on the preferential rules of origin. Ireland 1. The Department of Finance and the Department of Public Expenditure and Reform have published the Fiscal Monitor for February 2025 which confirms an Exchequer surplus of €3.2 billion to the end of February. 2. Revenue has issued three new Tax and Duty Manuals outlining the Angel Investor Relief Scheme. UK 3. Do you use the Agent Online Forum? HMRC want your feedback. 4. Read about the NI Tax Committee’s meeting with HMRC’s Director of the Making Tax Digital Programme. International 5. Read about the recently updated guidance on the preferential rules of origin. 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. You can also read this week’s post EU exit corner.

HMRC is conducting a review of the Agent Online Forum (Agent Forum) as there is concern that the forum is not working as intended. The Agent Forum is for tax agents who are members of a professional body and its aim is to enable agents to report issues about HMRC systems that are affecting taxpayers and their clients with responses received to forum posts from HMRC. If you use the Agent Forum, please email tax@charteredaccountants.ie with your feedback. If you are not already a member of the forum, a profile must first be set up on HMRC’s Customer Forum  after which access to the Agent Forum should be requested. HMRC will require your contact details, the name of your professional body and your membership number in order to register you on the Agent Forum. The aim of the forum is to be a place for agents to report issues that are potentially widespread and affect a number of taxpayers or agents therefore it should not be used to raise client specific queries.

The Northern Ireland Tax Committee chaired by Janette Burns met recently for the first time in 2025. A range of issues was on the agenda including Making Tax Digital (MTD) for income tax which commences in just over a year from April 2026 for unincorporated businesses and landlords with turnover from self-employment and property income exceeding £50,000 in 2024/25. The meeting was attended by several HMRC MTD Programme representatives, including the Programme Director Craig Ogilvie, who gave an update on the current status of this project whilst also reflecting on its challenges. Craig also set out what HMRC’s ambitions are for the next phase of testing in 2025/26, including the supports which will be available to taxpayers and agents. HMRC will be writing to agents who are likely to have clients in the first phase of mandation in the coming months; just one element of a wider comms plan. HMRC is keen to hear about the plans of our member firms to get ready for this major change and, in particular, specifically the reasons why firms are not planning to take part in testing in 2025/26 and what the challenges/blockers are preventing participation. Email tax@charteredaccountants.ie to provide your feedback. The Institute continues to work with HMRC on MTD readiness and is developing a cross-department MTD readiness strategy to assist members in their preparations. Last week HMRC held an MTD event in Belfast on Tuesday 4 March which the Institute was represented at. Another event is to be held in Belfast later in 2025 which we will share details of once available. HMRC’s MTD team, including the Programme Director also presented at the Institute’s Practice Consulting team’s Practice News webinar at the start of February. On the guidance front, HMRC has published an updated version of work out your qualifying income for Making Tax Digital for Income Tax. The changes made to this guidance are as follows: Clarified the definition of ‘qualifying income’. This is because HMRC is seeing that various taxpayer types think that other income sources are included under ‘income from self-employment’ e.g. income from a partnership or dividends from their personals service company when they are not, Explanation of ‘latency’, Added a new sub-section on what’s not included, Added new sections on if you use the cash basis and are VAT registered, if the transactions in UK land rules apply, and if you are impacted by basis period reform, and Redesigned the section on residency and removed the concept of domicile which will no longer be relevant from April 2025. These changes align to internal HMRC feedback and policy review but are also based on user feedback from ongoing user research in support of this interactive guidance tool, linked from Find out if and when you can use MTD. The list of available MTD for income tax software has also been updated.

Report stage and third reading of Finance Bill 2024-25 took place last week. In advance, a number of government amendments were tabled and updated explanatory notes published. The Bill’s passage through the House of Commons has now been completed and all Government amendments (and no others) were passed. As the Bill has now moved to the House of Lords, it is considered to be ‘substantively enacted’ for accounting purposes (specifically UK GAAP and IFRS) as Finance Bills cannot be amended by the House of Lords and will only be debated. As this is a formality, the Bill is also now considered to be in its final form. The Government amendments were as follows: Minor changes to the scope of the new residence based inheritance tax regime and to the new temporary repatriation facility including that this will be available on offshore income gains in trusts, Additional relief for visual effects expenditure, and Clarifications to the conditions to be satisfied for payments into decommissioning funds to be treated as decommissioning expenditure for ring fence tax purposes. In other legislative news, the House of Lords agreed amendments to the National Insurance Contributions (Secondary Class 1 Contributions) Bill at report stage on 25 February 2025. This Bill will implement the changes to employer national insurance contributions announced in the 2024 Autumn Budget. The Bill has now had third reading in the House of Lords and will return to the House of Commons.  

In this week’s miscellaneous updates, the fuel advisory rates applicable from 1 March 2025 are available and HMRC has launched a technical consultation on the impact of the reforms to the inheritance tax (IHT) reliefs, agricultural property relief (APR) and business property relief (BPR) in the context of trusts. The official rate of interest from 6 April 2025 has been set and the latest HMRC performance data is available. HMRC has appeared at the Public Accounts Committee (PAC) and it has been announced that the free joint filing service provided by HMRC and Companies House will close from April 2026. The Institute for Fiscal Studies (IFS) has published an article looking ahead to the Spring Statement later this month and the consultation outcome for ‘Tackling non-compliance in the umbrella company market’ has been published. The latest schedule of HMRC Talking Points live and recorded webinars for tax agents are available for booking. Spaces are limited, so take a look now and save your place. And finally, check HMRC’s online services availability page for details of planned downtime and the online services affected. HMRC technical consultation on reforms to APR and BPR At Autumn Budget 2024 the Government announced controversial changes to APR and BPR for IHT from 6 April 2026. The Institute has previously highlighted to the Government its concerns in relation to these changes particularly in the context of Northern Ireland family owned businesses and farms. These changes will also impact on the IHT payable by trusts comprising property that qualifies for APR and/or BPR where the value of that property exceeds £1 million. The Government has now launched a technical consultation on the application of this £1 million allowance for property settled into trust qualifying for 100 percent APR/BPR. Note however that this consultation is very limited in scope and focuses solely on the technical implications for trusts containing agricultural or business assets. As previously advised by HMRC, the wider policy change announced in the Autumn 2024 Budget is not being consulted on. As a technical consultation, this is running for a shorter period of time and closes on 23 April 2025. Responses can be submitted by using the online form or by sending responses to aprbpr.consult@hmrc.gov.uk. Official rate of interest The Taxes (Interest Rate) (Amendment) Regulations 2025 sets the official rate of interest for calculating the benefit in kind on a beneficial loan at 3.75 percent from 6 April 2025. HMRC has also updated the tables of interest rates for beneficial loan arrangements to reflect the new rate with details of historic rates also available. Latest HMRC performance data The latest HMRC performance data has been published: HMRC quarterly performance updates, HMRC monthly performance reports, HMRC quarterly performance update: October to December 2024, and HMRC monthly performance report December 2024. Members are encouraged to provide feedback on HMRC service levels by email to: tax@charteredaccountants.ie. HMRC appears before PAC HMRC appeared again recently at a PAC hearing where the Committee heard about the impact of fiscal drag amongst a range of other issues. At the hearing, HMRC’s current CEO Sir Jim Harra said ‘The freezing of the tax thresholds mean that more people come into the tax system so there are more people for us to deal with, it also means that more people go into higher rates and our experience is that people’s tax affairs become more complex. This year for example, we’ve seen a very significantly greater number of people whom we have to adjust their PAYE code because of bank and building society interest, and that has certainly driven more customer contact.’ The hearing also discussed why HMRC does not publish data on the cost of tax compliance for individuals, the high level of senior staff in HMRC, and the increasing cost of VAT and corporation tax administration. The hearing is part of the PAC’s inquiry ‘The Cost of the Tax System’ which was opened in response to the National Audit Office’s report on the drivers of cost in the tax system. A full transcript of this appearance will be available on the parliament website in due course. Free company filing service to close from April 2026 In an announcement last week, it was confirmed that from April 2026 the Government’s free online accounts and company tax return service will close meaning small businesses that primarily use this service to file their accounts and company tax returns at the same time with Companies House and HMRC will need to use commercial software for filings on or after 1 April 2026. The announcement comes as a surprise and was not consulted on. From 1 April 2026, companies will only be able to file their annual accounts with Companies House using third party software, web services, or paper filing. However, it will only be possible to use software to file company tax returns with HMRC from 1 April 2026. IFS looks ahead to the Spring Statement In an article looking ahead at the Spring Statement which will take place later this month on Wednesday 26 March, the IFS asks ‘what are the Chancellor’s options if – and it is very much an if – the upcoming Spring Forecast puts her on track to miss her fiscal target?’ The IFS notes that economic developments since the autumn mean that it is possible, but not guaranteed, that the Chancellor will now be missing one or both of the fiscal rules under the Office for Budget Responsibility’s updated forecasts and that this prospect is largely a result of her own earlier decisions. According to the IFS, the Chancellor has two options: ‘The first option would be to prioritise policy stability. The Chancellor could reiterate her commitment to fiscal sustainability and her fiscal rules, but break the letter of those rules – despite them only being legislated in January – and delay any corrective fiscal action to the full fiscal event in the autumn. This would recognise that twice-yearly fine-tuning of tax and spending plans brings costs, and that in an uncertain world there is no meaningful economic difference between a forecast for a small current budget surplus in 2029–30 and a forecast for a small current budget deficit in 2029–30. The second option would be to prioritise the fiscal rules. She could abandon her commitment to holding only one fiscal event per year (at the first time of asking), and announce tax rises or (even) tighter spending plans at the Spring Forecast to achieve a forecast for a current budget surplus in 2029–30. The Chancellor might worry that breaching the letter of her ‘non-negotiable’ rules could send an unwelcome signal and affect financial market participants’ perceptions of this government’s ability or willingness to take difficult fiscal decisions. Delaying decisions to the autumn could also make it harder to adjust public service spending plans (given that multi-year departmental settlements are to be agreed in June) and trigger months of speculation about possible tax rises in the Autumn Budget.’ If the Spring Statement contains tax changes, we will report on these in due course in Chartered Accountants Tax News. Tackling non-compliance in the umbrella company market: consultation outcome The Government has published the consultation outcome to ‘Tackling non-compliance in the umbrella company market’. As a result, the Employment Rights Bill will be amended to define ‘umbrella companies’ and provide for their regulation by the Employment Agency Standards Inspectorate and the new Fair Work Agency (when this body is established). It was also confirmed that, as announced at the Autumn 2024 Budget, the Government will bring forward legislation to move the responsibility to account for PAYE from umbrella companies that employ workers to recruitment agencies that supply their labour to an end client. This will take effect from April 2026 with consultation  expected on the draft legislation later this year

Revenue has updated its Tax and Duty Manual on The Employers Guide to PAYE to reflect the increase in the reporting period for employers who cease to make payments to employees. The notification period has been extended to 30 days.

Relief for investments in innovative enterprises, commonly known as Angel Investor Relief, commenced by Ministerial Order on 1 March 2025. The relief allows individuals to avail of a reduced capital gains tax (CGT) rate of 16 percent, or 18 percent in the case of investments made via a qualifying partnership, on a gain arising on the sale of a qualifying investment in a qualifying company, subject to certain conditions. Revenue has issued three Tax and Duty Manuals covering the relief: The Tax and Duty Manual Relief for investment in innovative enterprises outlines the requirement that the qualifying investment must be made before 31 December 2026 and that shares must be held by the investor for at least 3 years before the disposal, The Tax and Duty Manual Qualifying Company (Certificates of Qualification) confirms that a qualifying company is one which holds certificates of qualification which consist of: a certificate of going concern, and a certificate of commercial innovation. A company can apply to Revenue for these certificates of qualification. The manual outlines the process for making applications and provides further details on the definition of qualifying company and qualifying investment. The Tax and Duty Manual Investor’s perspective provides further details on the conditions for claiming the relief including details on eligible shares, qualifying investments, and investment through partnerships. The reduced CGT rate is available on a gain up to a maximum of twice the value of the investor’s initial investment and the relief is claimed on the individual’s Income Tax return. A lifetime limit of €10 million exists on the total amount of chargeable gains that may avail of the reduced rate of CGT for each individual investor.

In this week’s post EU exit corner, we bring you the latest guidance updates and publications relevant in the post EU exit environment. The most recent Trader Support Service bulletin is also available as is the latest Brexit and Beyond newsletter from the Northern Ireland Assembly EU Affairs team. Miscellaneous guidance updates and publications Internal temporary storage facilities (ITSFs) codes for Data Element 5/23 of the Customs Declaration Service, Data Element 2/3: Documents and Other Reference Codes (Union) of the Customs Declaration Service, Reference documents for The Customs (Reliefs from a Liability to Import Duty and Miscellaneous Amendments) (EU Exit) Regulations 2020, Reference Documents for The Customs Tariff (Suspension of Import Duty Rates) (EU Exit) Regulations 2020, Reference Document for The Customs Tariff (Establishment) (EU Exit) Regulations 2020 Importing SPS controlled goods that interact with the ALVS, Check if a business holds Authorised Economic Operator status, List of customs training providers, and Using commodity codes and related additional codes in the Customs Declaration Service.

Revenue has launched a new Customer Charter which outlines the principles for service delivery and the mutual expectations in dealings between Revenue and its customers. The Charter emphasises that Revenue’s primary service delivery channel is digital and outlines that the digital self-service channels process millions of customer transactions annually. Revenue recognises that some customers may, due to their personal circumstances, have difficulty in using the digital services and that a network of trained Access Officers is available to assist persons with a disability in accessing services provided by Revenue. Revenue will also provide virtual and in-person appointments where necessary. The Charter affirms the commitment by Revenue to transparent accountability, including the publication of regular performance reports on service delivery.

The Institute, under the auspices of the CCAB-I, made representations on behalf of members at recent meetings of the Tax Administration Liaison Committee (TALC) Direct and Capital Subcommittee and TALC Indirect Taxes Subcommittee. Among the issues that the Institute raised were the filing requirements for Investment Limited Partnerships and the VAT treatment of microgeneration of electricity. TALC Direct and Capital Subcommittee meeting Filing requirements of an Investment Limited Partnership CCAB-I raised a query on the filing requirements for Investment Limited Partnerships (ILPs). An  ILP is regulated by the Central Bank of Ireland as a Qualifying Investor Alternative Investment Fund (QIAIF). The partners of an ILP are similar to shareholders in an investment company or unitholders in a unit trust. Section 739J(3) TCA 1997 requires an ILP to file a return on or before 28 February in the year following the year of assessment. This is known as the Form ILP1. Our members were reporting confusion as to whether an ILP is also required to file the Form 1 (Firms) partnership return. In our view, a Form ILP1 should be the appropriate form. Revenue confirmed, however, that an Investment Limited Partnership is required to complete both a Form 1 (Firms) and a Form ILP1. A new tax and duty manual on partnerships will issue in the coming months. Partnerships and association for the purposes of certain ATAD measures CCAB-I raised a query on the meaning of “associated entities” and the impact on partnerships for the purposes of the Outbound Payments Defensive Measures. This concept is also discussed in guidance on Anti-Hybrid Mismatches and on the Interest Limitation Rule. We requested clarification on whether guidance in the latter manuals pertaining to partnerships would be updated to reflect the guidance in the Outbound Payments Defensive Measures manual. Revenue noted that future guidance will cover the general tax implications of partnerships and specific provisions which should address the query raised. Residential Zoned Land Tax An update was provided by Revenue on the recent meeting of the Residential Zoned Land Tax Subcommittee. The issue regarding the lack of a clearance mechanism for certain property transactions was raised and consequent expected delays were outlined to Revenue. TALC Indirect Subcommittee meeting VAT on the microgeneration of electricity Revenue confirmed that the application of VAT on the microgeneration of electricity by businesses can be managed by the business itself or by the electricity supplier receiving the excess energy via customer self-billing. VAT in the Digital Age update Revenue also outlined the measures which form part of the VAT in the Digital Age (ViDA) proposal which aims to significantly modernise the EU’s VAT system. The three pillars to the proposal cover e-invoicing and digital reporting, platform economy, and single VAT registration with all proposals expected to be fully implemented by 2030. VAT scheme for small enterprises Revenue confirmed that the directive on the special VAT scheme for small enterprises (Directive 2020/285) will be transposed soon, after which guidance will be issued. This scheme is operating by Revenue on an administrative basis since 1 January 2025.

The Department of Finance and the Department of Public Expenditure and Reform have published the Fiscal Monitor for February 2025 which confirms an exchequer surplus of €3.2 billion to the end of February. This compares to a deficit of €0.1 billion recorded for the same period last year. Tax receipts collected to the end of February were €15.2 billion, which was €3.2 billion ahead of the same period last year. Excluding the once off receipts from the Court of Justice of the European Union (CJEU) judgement in the Apple State Aid case, total receipts amounted to €13.5 billion, an increase of €1.5 billion. Tax revenues of €5.1 billion were collected in the month of February, up by €0.9 billion on the same month in 2024. Income tax receipts of €2.7 billion were recorded in the month of February, €0.2 billion ahead of last year.  On a cumulative basis, income tax receipts of €5.7 billion were €0.3 billion (5.8 per cent) ahead of the same period in 2024. Corporation tax receipts of €1.0 billion were collected in the month which was an increase on February 2024 by just under €0.5 billion, mainly due to a once off amount not related to the CJEU ruling. On a cumulative basis, receipts of €2.8 billion were up by €2.2 billion. When once-off CJEU revenues are excluded, cumulative corporation tax receipts to the end of February 2025 amounted to €1.1 billion, ahead of the same period last year by €0.5 billion. February is not a VAT-due month and modest receipts of €0.5 billion were collected in the month, up by €0.1 billion on February 2024. Cumulatively, VAT receipts of €4.6 billion are ahead of the same period last year by €0.3 billion. Excise duty receipts of €0.5 billion were collected in February, up by €43 million on the same month last year. Commenting on the figures, Minister for Finance, Paschal Donohoe said ”February is not generally a significant month for tax revenues, but the steady performance across most tax heads to date is a further positive reflection of the strength of our economy. The March returns, which incorporate the first large corporate tax payments of the year, will provide a clearer indicator of the performance of the public finances. In an increasingly uncertain global environment, it is now more important than ever that we maintain our public finances on a positive trajectory. This Government is committed to doing this in a balanced and sustainable way.”  

The Directorate-General for Taxation and Customs Union has announced the release of updated Guidance on the Preferential Rules of Origin. The updated guidance is intended to enhance clarity and compliance in international trade.