Last Tuesday 18 July was “Legislation Day” (or “L-day”) when the Government published draft legislation for inclusion in Finance Bill 2024. Also published were explanatory notes, tax information and impact notes, responses to consultations, several new consultations, and other supporting documents. L-Day came just days after the Spring Finance Bill 2023 received Royal Assent to become the Finance (No. 2) Act 2023, and the second Finance Act of 2023. Following the Spring Finance Bill 2023 receiving Royal Assent, the Government published a statutory instrument implementing the new UK transfer pricing (“TP”) documentation requirements. The Transfer Pricing Records Regulations 2023 mean that for the first time the UK has mandatory TP documentation requirements. HMRC have also published new guidance on this in its International Manual. Chartered Accountants Ireland is disappointed to see draft legislation published last week on L-day for the potential merger of the UK’s SME and large company R&D schemes from April 2024 which we were opposed to in our response to this consultation earlier in 2023. However, we are pleased to see that the Government plans to simplify how the high-income child benefit charge is collected which was a recent recommendation in a consultation response in June. Last week’s L-day announcements contained few surprises and largely built on previous policy announcements at both Spring Budget 2023 and April’s Tax and Administration Maintenance Day. The Government also made some announcements in a small number of technical tax policy areas and published some new consultations and summaries of responses to previous consultations. Changes to the UK’s Pillar Two rules also featured which we will cover in detail next week. The Government also intends to change the income tax rules for anyone who inherits a pension which will make them liable for income tax at their marginal rate from 6 April 2024. This announcement was made briefly in the guidance on abolishing the pensions lifetime allowance which was published on L-day last week. Other headlines from last week’s L-day announcements included:- Research and development tax reliefs – draft legislation to introduce a new permanent rate of relief for the most R&D intensive loss-making SMEs from 1 April 2023 and on the proposed design of a potential merged scheme combining the SME and RDEC schemes. Further, the restrictions on overseas R&D expenditure, delayed from April 2023, will be introduced for expenditure incurred on or after 1 April 2024. With a few exceptions, expenditure on overseas R&D will no longer be qualifying; Reform of audio-visual creative tax reliefs – draft legislation to implement the previously announced modernisation and reform of the existing audio-visual tax reliefs into expenditure credits. The reforms include a higher rate of relief for animation and children’s TV, which will also be extended to animated films; Administrative changes to the high-income child benefit charge – the Government wants to simplify the process for those who become liable to this, particularly for those who currently need to register for Self-Assessment (“SA”) to pay the charge. Details will be provided in due course on how this will enable employed taxpayers to pay this through their tax code, without the need to register for SA; and Data HMRC collects from taxpayers – the draft Finance Bill clauses have been published for technical consultation before introducing the changes in the Autumn Finance Bill. Subsequent amendments to regulations will be required to enact the changes and set out the detailed requirements. The changes will take effect from no earlier than 2025/26 and broadly the changes mean that HMRC will be given extra powers to collect information about the amount of dividend payments earned by owner managed business directors while employers will have to report the number of hours worked by individual employees. HMRC will continue working closely with businesses and other affected parties to progress these changes, ensuring clear requirements, guidance, and adequate time for implementation. If you have any comments or questions about the draft legislation, please email: responsivenessdataconsultation@hmrc.gov.uk In addition, the following consultations have been published: Mass Balance approach to account for chemically recycled plastic for Plastic Packaging Tax; Tax incentives for occupational health; Taxation of Employee Ownership Trusts and Employee Benefit Trusts; and Review of the VAT Terminal Markets Order legislation.

Revenue has advised that a request to offset VAT repayments against warehoused debt is now available in ROS. The Tax and Duty Manual which provides guidance on offsetting VAT repayments has been updated accordingly. 

The second 2022/23 self-assessment payment on account for income tax and Class 4 NIC (National Insurance Contributions) is due for payment on or before midnight Monday 31 July 2023. Each payment on account is half of the previous year’s tax bill. Information on time to pay arrangements and how to apply is available on GOV.UK. Anyone who is self-employed is required to make two payments on account every tax year unless:- their last Self-Assessment tax bill was less than £1,000; or they’ve already paid more than 80 percent of all the tax owed, for example through their tax code. If a taxpayer knows their tax bill is going to be lower than last year, a request can be made to HMRC to reduce payments on account.

Revenue has published preliminary statistics on 2023 Local Property Tax (LPT) as of 14 July 2023. The rate of payment compliance is 94 percent and the total amount collected to date in 2023 is €394 million. Approximately €5 million has been collected in respect of newly liable properties. Further information is available here.

In this week’s EU exit corner, we bring you the latest guidance updates and publications relevant to EU exit. The latest Trader Support Service bulletin is also available. We also remind you that the deadline for applying for the new UK Internal Market Scheme to ensure applications are processed in time is next Monday, 31 July. Miscellaneous updated guidance etc. The latest documents and publications relevant to EU exit are as follows:- Reference Document for The Customs (Northern Ireland) (EU Exit) Regulations 2020; Report payments and view your allowance for non-customs state aid and Customs Duty waiver claims; Check if you can claim a waiver for goods brought into Northern Ireland; Request Customs Declaration Service data on imports and exports; 4-digit to 3-digit procedure to additional procedure code correlation matrix for imports; Simplified procedures exclusion list of procedure and additional procedure codes for CDS; Appendix 2: DE 1/11: Additional Procedure Codes of the Customs Declaration Service (CDS); Reading notes for Declaration Category Data Sets: CDS Declaration and Customs Clearance Request Instructions; Additions and deductions for Data Element 4/9 of the Customs Declaration Service; Appendix 1: DE 1/10: Requested and Previous Procedure Codes of the Customs Declaration Service (CDS); CDS Declaration Completion Instructions for Imports; Appendix 21: Import Declaration Category Data Sets; Imports and Exports of the Customs Declaration Service (CDS); Data Element 2/3: Documents and Other Reference Codes (Union) of the Customs Declaration Service; Authorised Consignee Temporary Storage (ACTS) location codes for Data Element 5/23 of the Customs Declaration Service; Maritime ports and wharves location codes for Data Element 5/23 of the Customs Declaration Service; Notices made under the Customs (Export) (EU Exit) Regulations 2019; Bringing commercial goods into Great Britain in your baggage; and Notices made under the Customs (Import Duty) (EU Exit) Regulations 2018.

Revenue has published preliminary statistics to 20 July 2023 for the Temporary Business Energy Support Scheme (TBESS). With 29,893 businesses registered for the scheme, claims paid out amount to €107.22 million. Businesses are reminded that TBESS claims for the periods September 2022 to July 2023 must be submitted by 30 September 2023. Further information is available on revenue.ie.

HMRC’s latest schedule of live and recorded webinars is now available for booking. Spaces are limited, so take a look now and save your place. Basis period reform – moving to the tax year basis: book now This webinar provides an introduction to basis period reform and looks at:- The tax year basis applicable from 2024/25 The transitional year to basis period reform of 2023/24; and Overlap relief. Agent services account access groups: book now This webinar looks at access groups within the agent services account including:- about access groups; clients lists and transacting with clients; adding team members; managing access groups; examples; and error messages, filters, and client references. An overview of the new alcohol duty structure and rates: book now From 1‌‌‌ August‌‌‌ 2023, alcohol duty will be charged in relation to the strength of the product as opposed to the product type. This webinar will explain the new alcohol structure and rates, including the reduced rates for draught products An overview of the new alcohol duty structure and small producer relief: book now This webinar will provide a background into the new small producer relief, including eligibility criteria, and how to calculate this. Capital allowances and vehicles: book now This webinar is part of HMRC’s annual Self-Assessment programme covering the rules for cars, qualifying expenditure, pools and rates, and vehicle hire purchase. A recording is also available to register to view of the webinar UK freeports – examples of tax and customs benefit.

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.

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.

The OECD will publish its annual review of Asia and the Pacific tomorrow. The publication, “Revenue Statistics in Asia and the Pacific”, presents key indicators tracking progress on the mobilisation of domestic resources and informing tax policies to bridge the financing gap for the Sustainable Development Goals to build sustainable public finances in the wake of the pandemic.

In Irish news, representatives from the Institute met with the Minister for Finance to discuss the CCAB-I's Pre-Budget Submission 2024 and also engaged with Revenue to discuss the new Enhanced Reporting Requirements for Employers. In UK news, read about how agents can action post that they have sent to HMRC which is more than a year old and anyone authorised under the UK Trader Scheme should apply to the new UK Internal Market Scheme by the end of this month. In International news, the OECD agrees an Outcome Statement on the Two-Pillar Solution. Ireland The Minister for Finance met with Institute representatives to discuss the CCAB-I’s Pre-Budget Submission 2024. Institute representatives, under the auspices of the CCAB-I, engaged with Revenue to discuss the implementation of the new enhanced reporting requirements for employers. UK Read in our miscellaneous HMRC updates about the approach to be taken by agents to ask HMRC to action agent post which is more than a year old. HMRC is recommending that anyone signed up to the UK Trader Scheme apply to the new UK Internal Market Scheme by the end of this month International The OECD has agreed an Outcome Statement on the Two-Pillar Solution. 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 EU exit corner here.

Representatives from the Institute, under the auspices of the CCAB-I, met with the Minister for Finance, Michael McGrath T.D and his team last week to discuss CCAB-I’s Pre-Budget Submission 2024. The need to simplify the tax system and reduce the administrative burden on businesses was discussed, as were the complexities experienced by small businesses, in particular, when availing of the R&D tax credit, EIIS and SURE. The importance of long-term investment in critical infrastructure, not least housing, in order to maintain Ireland’s position as a competitive place to do businesses was also highlighted. The need to reform the personal tax system to retain and attract talent was also discussed.