HMRC has launched a new tool to help taxpayers determine their tax residence status. The tool can be used from 2016/17 onwards up to the current tax year 2022/23. According to HMRC, the tool is suitable for most taxpayers if their circumstances are straightforward. The tool applies the following three tests under the Statutory Residence Test legislation to determine an individual’s residence for tax purposes:- the automatic overseas tests; the automatic UK tests; and the sufficient ties tests. More detailed guidance on the SRT is available in RDR 3 and in HMRC’s manuals from RDRM11000 onwards.

In this week’s EU exit corner, we bring you the latest guidance updates and publications relevant to EU exit and a reminder email from HMRC on moving from CHIEF to the Customs Declarations Service (“CDS”) for all imports of goods into the UK from 1 September 2022. The reminder email advises that by 30‌‌‌ ‌‌September 2022, businesses must set up a new Direct Debit Instruction for the CDS if it uses a duty deferment account. If this is not done, the business will not be able to use its duty deferment account and will need to make immediate payments each time it makes an import declaration.  Miscellaneous updated guidance etc. The latest guidance updates, and publications relevant to EU exit are as follows:- Check if you need to make an entry summary declaration; Check if a business holds Authorised Economic Operator status; Apply to use simplified declarations for imports you entered in your records without authorisation; Making a delayed supplementary import declaration using the Customs Declaration Service; Making an import supplementary declaration; Apply to use simplified declarations for imports; Delaying declarations for goods brought into Great Britain; Making an import declaration in your records without authorisation; Declaring goods and paying tax when using a Freeport customs site; Manufacturing and importing tobacco products; Attending an inland border facility; Selling and storing tobacco products; How to apply for a repayment of import duty and VAT if you've overpaid (C285); Customs Declaration Service error codes; Get help using example declarations for imports to Great Britain from the rest of the world; Subscribe to the Customs Declaration Service; Request Customs Declaration Service data on imports; and New importers to register on new single customs platform.

From 1 April 2020, non-UK resident landlord companies are subject to corporation tax on rental profits arising on their UK properties. HMRC has recently updated the relevant section of its Corporation Tax Manual which sets out that the financial statements must be filed by non-resident landlord companies with UK rental profits (but no UK permanent establishment). The manual now makes clear that iXBRL financial statements are required if these are prepared under an accounting standard supported by an XBRL taxonomy accepted by HMRC (such as UK GAAP, IFRS and US GAAP). If the company’s accounts are not prepared under an accounting standard supported by an XBRL taxonomy accepted by HMRC, such accounts should be submitted as a PDF attachment to the online return. This must also include a UK GAAP/IFRS profit and loss account for the UK property business in iXBRL format and using the corporation tax computational taxonomy. The various scenarios are set out in table format in the following standalone document:- Company Tax Returns: format for accounts forming part of an online return.

We have compiled the latest updates to various HMRC VAT publications, briefs and guidance. Readers should note that there are also numerous updates to VAT guidance and rules due to the end of the EU transition period. Apply for VAT group registration or amend your details; Revenue and Customs Brief 10 (2022): VAT — business and non-business activities; Compliance checks: How to avoid penalties for Making Tax Digital for VAT – CC/FS69; Domestic reverse charge procedure (VAT Notice 735); Apply for permission to opt to tax land or buildings; Insolvency (VAT Notice 700/56); Funded pension schemes (VAT Notice 700/17); and VAT rates on different goods and services.

Originally posted on Business Post 09 July 2022.  Glowing reports from the IMF won’t mean much to those struggling with rent, fuel and food costs. It feels as if the country has just done some kind of economic Leaving Cert, with end of term reports published last week. First there was the Summer Economic Statement, then the Central Bank quarterly update, and finally on Thursday a good conduct report from the International Monetary Fund. Subject to the usual terms, conditions and hedging that we tend to find in economic assessments, the portrait which all three of these reports painted of the Irish economy is surprisingly positive. The Summer Economic Statement projects that there will be a modest budget surplus in 2022 with significant money available to help on the social welfare and tax front to take the sting out of inflation. The Central Bank is of the view that the inflation spike will be most pronounced in 2022, and that once we are through this current calendar year, inflation may revert to something more tolerable. Both the IMF and the Central Bank conclude that the employment outlook is perhaps as strong as it has ever been, with less unemployment, more vacancies available and much greater female participation in the labour force. This time three years ago, the predictions from all these bodies were not as positive. The commentary in the 2019 Summer Economic Statement and the Central Bank’s quarterly forecast in July 2019 was dominated by Brexit fears. The IMF chimed in with Brexit concerns as well, adding the escalation of global protectionism, and having to adapt to ongoing international tax changes for good measure Since then, of course, we did have Brexit which was orderly or disorderly, depending on your political (not commercial) point of view, a crushing pandemic, and a Russian invasion of Ukraine disrupting commodity supplies worldwide. You would never seek it out, but one outcome of the pandemic is that it was like an experimental laboratory for the economy. Decisions were stress-tested in a way that would otherwise never have been possible. Depending on how you count them, more business supports and social welfare benefits were paid out by government in the two years of the pandemic than might usually be the case over five years. The outcome of this “experiment” has been that these payments seem to have been more in the nature of an investment than in the nature of largesse. The pandemic has also proven that our tax base is very resilient. We have discovered that the exchequer is predominantly funded by the corporate sector paying corporation tax, high-income earners paying income tax – about 80 per cent of all income tax and USC comes from the top 20 per cent of earners – and consumer activity in the form of Vat. According to the June exchequer figures, over 85 per cent of all of our tax revenues come from these three sources. Whatever else is done in the September budget, these sources have to be managed and preserved as no package of social welfare benefits and tax reliefs can be delivered without them. This resilience is further underlined by the fact that it is Irish business that acts as the collector of taxes for PAYE and Vat. During the pandemic, a sensible process of tax debt “warehousing” was introduced which allowed business to defer paying PAYE and Vat to Revenue. However, it is surprising how little tax debt was deferred in this way. Totals did vary over the ebb and flow of the lockdowns, but broadly speaking, there was deferral only to the tune of 5 per cent of the total tax yield. That's a confident performance by Irish businesses in a pandemic crisis. This sense of business confidence is reflected by surveys such as the Bank of Ireland’s Economic Pulse, suggesting that business sentiment is currently higher than consumer sentiment, but vastly more so than in April 2020, when we all stared into the abyss of the Covid-19 pandemic. There will be some who will argue that all this confidence and positive sentiment is misplaced and that we underestimate the interest rate and inflationary challenges of the coming months, but nevertheless, that confidence is there and is already having a bearing. It may yet be bolstered further. The indifference, bordering on hooliganism, shown by the current British administration to the political and economic status of Northern Ireland and Ireland’s position within the EU could soon be remedied. It certainly can’t get much worse. The problem now for the government is to translate this economic capacity and success into consumer sentiment. Glowing reports from the IMF won’t cheer anyone who is struggling with fuel, grocery or accommodation costs, nor for that matter the employer who can’t get staff because prospective employees can’t find a place to rent. And while inflation is expected to ease over the next ten months or so, it won’t over the next ten weeks between now and budget time. The economic exams may have been passed with flying colours. The budget will be a different matter entirely. There could even need to be some economic mistakes made by over-spending or undertaxing on the next Budget Day to make the public aware of these past successes. Dr Brian Keegan is Director of Public Policy at Chartered Accountants Ireland

In Irish tax developments, the Institute, under the auspices of the CCAB-I, has responded to the public consultation on Pillar Two Minimum Tax Rate Implementation, and Revenue has published guidance on the Residential Zoned Land Tax.  On the UK front, read about the key announcements on last week’s legislation day, and the deadline for paying the second self-assessment payment on account for 2021/22 is Sunday 31 July. In International news, the OECD has published a report on housing taxation. TaxNews will be taking a seasonal break for the next two weeks, returning 15 August 2022. Ireland The Institute, under the auspices of CCAB-I, response to the Pillar Two Minimum Tax Rate Implementation consultation recommends ongoing stakeholder engagement throughout the process of implementation.   Revenue has published guidance on the Residential Zoned Land Tax. UK Read about the key announcements on last week’s legislation day including the news that the date of registration for self-assessment is not being changed, as recommended by the NI Tax Committee.   The deadline for paying the second self-assessment payment on account for 2021/22 is Sunday 31 July. International    5. The OECD has published a report on housing taxation. 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.    

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. HMRC’s latest update on the agent forum is also available in addition to the June 2022 Digital Services update which features the latest on Making Tax Digital and the Trust Registration Service.

Revenue’s guidance on "Plant in leased buildings - treatment of leasing income and capital allowances" is now available in Tax and Duty Manual Part 09-02-03. Tax and Duty Manual Part 09-01-03 has been archived.

Revenue has updated several chapters of the Pensions Manual to reflect amendments in Finance Act 2021. The updated chapters include benefits on death-in-service, transfer payments and personal retirement savings accounts.

The European Commission recently launched a public consultation, in form of a questionnaire, on a revision of the Union Customs Code. The aim of the initiative is to revise the Union Customs Code to strengthen the legal framework for customs and make it suitable to address the challenges that have emerged in the recent years.

Revenue has updated several computational examples throughout the Tax and Duty Manuals to reflect the position for the current year of assessment. Updated manuals include the Home Carer’s tax credit, Medical Insurance, and repayments under Section 460 Taxes Consolidation Act 1997.

In Revenue Statistics in Asia and the Pacific 2022,  a new report released by the OECD recently, the OECD provides harmonised data on tax revenues for 28 economies in the region. According to the report, tax revenues in Asia and the Pacific fell by -1.2 per cent of GDP to 19.1 per cent of GDP on average in 2020 as a result of the COVID-19 pandemic.