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.

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.

HMRC’s latest schedule of recorded webinars is now available for booking. Spaces are limited, so take a look now and save your place. Recordings are available to register to view as follows:- UK freeports – examples of tax and customs benefit An overview of the new VAT late submission, late payment penalties and interest changes; The Trust Registration Service and reporting discrepancies; and Super-deduction capital allowance.

In this week’s EU exit corner, we bring you the latest guidance updates and publications relevant to EU exit including news about a new advanced rules valuations service. According to the EU, the new customs arrangements as a result of the Windsor Framework, which have been targeted to commence from 1 September 2023, will not be fully implemented until inspection facilities at Northern Ireland ports have been completed and audited. And finally, the EU-UK Trade and Cooperation Agreement annual report 2022 has been published. New advance valuation ruling service HMRC intends to introduce an advance valuation ruling service in spring 2023 which aims to provide traders with legal certainty on the valuation method of goods they are importing into the UK for a period of three years and to also assist in completing customs declarations. Advance valuation rulings enable traders assess the value of their goods when making customs import declarations. They are legally binding decisions made by customs authorities at the request of a trader.  Traders will be able to use the new service to facilitate trade as this will provide certainty on the correct method of valuation, however the service will not be mandatory. More information and guidance on the new service will be provided by HMRC in advance of it going live. At the present time, the UK offers legally binding decisions as follows:- For advance tariff rulings, which provide legal certainty on the correct commodity code, which can then be used to determine the correct duty and taxes; For advance origin rulings, which provide certainty on the economic nationality of goods, when importing and exporting, under the rules of origin. For imports, this provides legal protection against any UK customs authority challenging the country of origin of the product. There are two types of origin in the rules of origin; preferential (which feature in the UK’s trade agreements) and non-preferential. Traders can prepare in advance if they intend to use the new service by ensuring they have:- a Government Gateway ID; and an EORI number. More information on valuation is available on GOV.UK. Miscellaneous updated guidance etc. The latest guidance updates, and publications relevant to EU exit are as follows:- List of customs training providers; Apply for authorised consignor or consignee status; Check if you can get import duty relief on goods using Temporary Admission; Apply to import goods temporarily to the UK; Withdraw funds from your cash account for Customs Declaration Service declarations; Paying into your Customs Declaration Service cash account; Use a cash account for Customs Declaration Service declarations; Making a simplified frontier declaration; Check how to move goods through ports that use the Goods Vehicle Movement Service; Locations you need to submit an ‘arrived’ export declaration before moving goods; Making a full import declaration; Create a goods movement reference; Transit newsletters — HMRC updates; and Receiving, storing and moving excise goods.

Revenue has announced it is extending the ROS return filing and payment date for certain self-assessed income taxpayers and taxpayers liable to capital acquisitions tax (“CAT”). The due date for the filing of the 2022 Form 11 and the payment of taxes is Wednesday, 15 November 2023. The due date is also extended to Wednesday, 15 November for CAT returns and payments for beneficiaries receiving gifts/inheritances with valuation dates ending in the year to 31 August 2023. The extension is available to taxpayers who pay and file through ROS only. Where either one of these actions is completed other than through ROS, the deadline for submission and payment is Tuesday, 31 October 2023.

On Wednesday 5 April the Institute, under the auspices of the CCAB-I, responded to the public consultation on Ireland’s personal tax system. In our response we noted that any revision of the personal tax system must take a holistic view of the overall tax mix given Ireland’s personal tax system, though progressive, relies heavily on high-income earners and international workers for a significant portion of its income tax revenues. In our summary, we noted the following: Taxpayers in Ireland face early entry into marginal rate taxation at a threshold which is currently below the average industrial wage. The intermediate income tax rate of 30 percent which has been raised in recent months should continue to be considered as part of Ireland’s future tax policy. Government should also consider indexation of income tax rates and bands as part of its future tax policy. The 3 percent rate of USC on self-employed incomes over €100,000 is inequitable and should be abolished. Tax policy must adapt to the modern working arrangements, including hybrid and remote working arrangements. SARP should be legislated for on a permanent basis given that it is overall positive from a cost-benefit perspective. The Rent Tax Credit should be made a permanent element of the income tax code and a similar credit should be introduced for mortgage holders to ensure parity of treatment. The Rent-a-Room threshold should be increased and the “cliff-edge” be removed from the relief. The personal tax system should be adapted to address the inequity of corporate landlords receiving more favourable tax treatment for the same source income. The government should avoid increasing the administrative burden of the PAYE tax system as onerous administrative requirements are a deterrent to entrepreneurism. USC and PRSI should be merged to reduce the overall complexity of the income tax system. Presently, three separate bases for returning tax/contributions on the same or similar income is not ideal from a tax policy perspective. Simplicity and efficiency are pillars of good tax policy.

Last week, Minister for Finance Michael McGrath and Minister for Public Expenditure and Reform Paschal Donohoe announced that tax revenues to the end of March were €19.7 billion, €2.5 billion (almost 15 percent) ahead of last year. The Exchequer deficit of €2.1 billion compares with a surplus of €0.2 billion in the same period last year, with the difference driven by the transfer of €4 billion to the National Reserve Fund in February 2023. Notably, corporation tax receipts increased by €1.3 billion to €3.2 billion. The increase in corporation tax has been explained as a timing issue with payments made in March which would otherwise be expected in August. At €7.4 billion, income tax receipts remained solid, up 8 percent and reflecting continued resilience in the labour market. VAT receipts increased by 16 percent to €6.8 billion. However, allowing for a technical adjustment, the underlying growth rate of VAT receipts was 12.5 percent in the first quarter. Commenting on the figures, Minister McGrath noted: “Today’s figures confirm strong momentum in our economy during the first quarter of the year. The strength of income tax shows that the labour market remains resilient, while VAT receipts suggest consumer spending remains reasonably solid. Once again, corporate tax receipts have surprised on the upside, though my officials estimate that around half of the corporate tax take is unlikely to be permanent. It is, of course, essential that windfall corporation tax receipts are not used to fund permanent expenditure. This is why I transferred €4 billion to the National Reserve Fund in February – there is now €6 billion in the Fund. I will also seek government approval in the coming weeks for a longer-term fund to meet the costs of an ageing population and other pressures that we know will arise in the future. Finally, the Government will publish the Stability Programme Update on 18th April, setting out my Department’s updated economic and fiscal assessment.” Read the full report at www.gov.ie.

The Spring Finance Bill 2023 (official title: Finance (No 2) Bill (Session 2022-23)) continues its passage through the parliamentary process and is now at Committee Stage having had  second reading in the House of Commons on 29 March. Dates for report stage and third reading have not yet been confirmed. Committee Stage commences first with a ‘Committee of the whole House’ which is currently scheduled for after the Easter recess on 18 and 19 April. A small selection of clauses will be discussed at this point, including full expensing for plant and machinery, the pensions tax relief changes and Pillar Two. The remaining clauses will be examined by the Public Bill Committee which is expected to complete its deliberations by 23 May 2023.

The Minister for Finance, Michael McGrath, has published the terms of reference for the Department of Finance to conduct a review of Ireland’s funds sector. Ireland is a global centre of excellence for asset management and funds servicing with the latest figures showing regulated and unregulated funds in Ireland having approximately €4.6 trillion in assets under management. Nationally, the funds sector employs some 17,000 people across 180 companies. The multi-disciplinary Review Team will be led by the Department of Finance, with support from state bodies, including Revenue and the Central Bank of Ireland. It is to produce a report titled ‘Funds Sector 2030: A Framework for Open, Resilient & Developing Markets.’ and will conclude its work in summer 2024. The team will look at a range of issues, which include examining the regimes for Section 110 entities, Real Estate Investment Trusts (REITs) and Irish Real Estate Funds (IREFs). It will also examine international contexts, effects on employment and the economy and the wider taxation regime for funds, life assurance policies and other related investment products. Commenting on today’s publication Minister McGrath said: “The establishment of a Review Team to develop a ‘Funds Sector 2030’ report is a proactive step and will cover a wide range of issues from competitiveness to taxation to financial stability. Ireland is a global centre of excellence for the asset management and funds servicing and over many years this has been a driver of economic and employment growth. I am confident that a new framework will support long-term growth in this area and maintain a sustainable and resilient funds sector here. This review also fulfils recommendations from the Commission on Taxation and Welfare and will ensure that our domestic funds framework is up-to-date and takes account of the significant developments in the funds sector in recent years.” Further information is available here.

The Minister for Finance Michael McGrath TD has launched a public consultation seeking stakeholder views on the future of the Bank Levy. Following the Retail Banking Review, carried out by the Department of Finance in 2022, further consideration is now being given to the future of the Bank Levy and whether it should be extended, reformulated, broadened or abolished. Responses to this Public Consultation will help inform the Department’s analysis. The consultation period will run until Friday 5 May 2023 and further information is available here.

The Minister for Finance, Michael McGrath TD, has published an assessment by his Department on the fiscal response to the cost of living challenge. The aim of the analysis is to outline the key objectives of the Government’s strategy and to document and quantify the fiscal response. The Government’s policy response to a sharp rise in the cost of living has been designed to assist those least equipped to respond while also aiming to avoid adding to inflationary pressures. The fiscal response has been timely, progressive and has primarily consisted of temporary supports, which are less likely to exacerbate inflationary pressures. Commenting on the analysis set out in the report, Minister McGrath said: “Government has responded decisively and effectively to the cost of living challenge, most recently with a suite of supports amounting to €1.3 billion announced in mid-February. A total of €12 billion – 4½ per cent of national income – has now been provided in direct relief to absorb some of the impact and ease the burden of inflation on households and businesses. Our response to the cost of living challenge is, by necessity, different to our response to the pandemic. Inappropriate or excessive fiscal interventions by Government would add fuel to inflation and result in fiscal policy itself becoming part of the problem. In designing its response, Government has also been conscious of rising borrowing costs – the cost of 10-year money is now in excess of 2½ per cent compared with essentially 0 per cent during the pandemic. Government has also been conscious of the need to calibrate the policy response in a manner that does not compromise the necessary transition to carbon-neutrality. Against this background, Government has, I believe, struck the right balance between supporting households and firms, while not jeopardising key fiscal and climate sustainability objectives. As we address the challenges of today, Government must also be conscious of the future. In the longer-term, alongside the need to meet the costs associated with demographic changes and finance the green and digital transitions, a future decline in tax receipts from the corporate sector is possible. This means that it is more important than ever that the public finances are kept on a sustainable trajectory so that we ensure we are in the strongest possible position to meet future economic challenges as they arise.” Further information is available here.

Revenue has published statistics on Local Property Tax (LPT) for the first quarter of 2023. LPT collected to date amounts to €314 million, with a payment compliance rate of 90 percent indicating that the majority of property owners have met their payment obligations. Payment arrangements for 2023 LPT liabilities are in place on over 1.7 million properties including 350,000 Annual Debit instructions debited on 21 March. 2022 was the first year that newly liable properties came within the charge to LPT on an annual basis. Owners of properties built during 2022 were required to submit an LPT return and set up a payment arrangement for 2023. Commenting on the importance of property owners making sure that they pay their LPT liability or set up a payment method without delay, Ms. Katie Clair, Head of Revenue’s LPT Branch, said: ‘’All residential property owners were required to set up their 2023 payment method by 10 January at the latest and the vast majority did exactly that. However, some property owners haven’t yet paid or set up a payment arrangement and they now leave themselves open to collection and enforcement action by Revenue. We have issued 150,000 letters to property owners who haven’t yet paid or set up a payment method to pay or make an arrangement to pay. Property owners who fail to do so may be subject to a range of collection and enforcement actions by Revenue including mandatory Deduction at Source (DAS) from salary or pension, withholding of tax clearance certification, the application of surcharges on income tax, corporation tax and capital gains tax returns or offsetting of other tax refunds against LPT arrears. I urge all property owners who haven’t made arrangements to pay their LPT to take immediate action and use this opportunity to ensure they are fully compliant with their LPT obligations. The easiest way to set up your LPT payment method is online. You can access the LPT online portal on revenue.ie. However, if property owners need assistance in completing their LPT Return or have any queries regarding their LPT obligations, they can contact the LPT Helpline at 01 738 36 26.”