Director-General Gerassimos Thomas has published an opinion piece on the Carbon Border Adjustment Mechanism (CBAM) and how carbon pricing supports the long-term investment needed for the green transition. In the article, he notes that since the introduction of the EU Emissions Trading System in 2005, there has been a 37 percent reduction in power and industrial emissions up to 2021, with EU GDP growing more than 50 percent in the same period. The CBAM is the next phase in the EU’s commitment to a greener, brighter future for Europe and its global trade partners.

Revenue has updated the Tax and Duty Manual regarding the Charitable Tax Exemption following the changes announced in Finance (No.2) Act 2023. The updated guidance confirms that: The tax exemption available under section 208 TCA 1997 is extended to include professional services income of a charity; and Revenue will withdraw the charitable tax exemption from the date in which the charity is no longer eligible, where withdrawn, Revenue will notify the Charities Regulator. The updated guidance also addresses applications for the tax exemption under section 208A TCA 1997 by overseas charities and under section 209 TCA 1997 for certain bodies established for the promotion of human rights.

The Bahamas, Belize, Seychelles, and Turks and Caicos Islands have all been removed from the EU list of non-cooperative jurisdictions, following agreement by Member States. While the Bahamas and Turks and Caicos Islands have been fully delisted, Belize and Seychelles have been moved from Annex I to Annex II (pending the results of a supplementary review). This is another important milestone in the Union’s ongoing efforts to promote tax transparency.

Revenue has updated the Tax and Duty Manual to reflect the increase in the employee (PAYE) tax credit to €1,875 for 2024 (from €1,775 in 2023) as provided for in Finance Act 2023, together with a new table to show the credit amount for prior years. 

Revenue has updated the Tax and Duty Manual regarding payments to property owners under the Repair and Leasing Scheme, which was introduced to bring vacant properties into social housing use.  The updated guidance clarifies that the scheme includes both a direct lease agreement and a rental availability agreement and, while both a local authority and an approved housing body (AHB) can enter into a direct lease agreement, only a local authority can enter into a rental availability agreement.  Further clarifications are also provided in relation to the amounts that may be reimbursed under the repair and leasing scheme.  References to the Home Renovation Incentive have been removed. Under the scheme, if a vacant property is suitable for social housing, the cost of necessary repairs is paid by the local authority or an approved housing body (AHB). The owner then leases the property to the local authority or AHB, who will make it available for social housing. The property owner receives an agreed lease payment from the local authority or AHB and the value of the repairs is gradually offset against this lease payment over the period specified in the lease.

Revenue has updated the Stamp Duty Manual which provides guidance on the stamp duty relief, under section 81AA SDCA 1999, in respect of certain transfers of agricultural land to young trained farmers. The manual has been updated to clarify the circumstances in which the relief can apply where the land is conveyed or transferred into joint ownership.  The updated guidance also addresses the application of limit on the relief in certain circumstances including where the land has been acquired by a young trained farmer and their spouse/civil partner who is not a young trained farmer.

Check out the latest items on the Agent Forum. Remember, in order to view each item, you must be signed up and logged in. We also take this opportunity to remind you that HMRC is currently conducting an exercise in which it is asking members of the forum to confirm they wish to continue to as a registered user.   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. 

Revenue has updated the Tax and Duty Manual for Remote Working Relief. The manual now reflects that payments to employees of the remote working daily allowance of up to €3.20 must be reported by employers under the Enhanced Reporting Requirements (ERR) which came into effect on 1 January 2024.  In addition, the updated guidance confirms that the remote working daily allowance applies to directors, including proprietary directors, where the director has incurred and defrayed relevant expenses ‘out of’ the relevant emoluments, that are subject to tax under the PAYE system, and all other conditions must be satisfied. 

In Irish news, Revenue provides an update on the implementation of the enhanced reporting requirements for employers and in UK news, the Autumn Finance Bill has completed all stages in the House of Commons. In International news, members from the European Commission’s VAT team discuss the new Central Electronic System of Payment Information (CESOP).  Ireland Revenue has published details of compliance with the enhanced reporting requirements (ERR), which came into effect on 1 January 2024. Revenue has updated the Stamp Duty manual which provides guidance on company reconstructions and amalgamations. UK The Autumn Finance Bill has completed all stages in the House of Commons. From 1 July 2024, HMRC is changing the income tax treatment for certain double cab pick-ups from vans to cars. International The European Commission’s VAT team discuss the new Central Electronic System of Payment Information (CESOP). 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.

On 5 February last, the report stage and third reading of the latest Finance Bill took place in the House of Commons. The Government’s proposed amendments to the Bill were passed, as was a new clause which had been tabled to introduce a new investment exemption for the electricity generator levy.  The Bill has now moved to the House of Lords where second reading was scheduled to take place on 21 February 2024. As the Bill is a ‘Money Bill’, it should be noted that this is a formality only as no changes can be made to the Bill by the House of Lords. This therefore means that, for UK GAAP/IFRS purposes, the Bill is now classed as ‘substantively enacted’. 

HMRC has published a new section in its Employment Income manual which sets out that from 1 July 2024, certain double cab pick-ups will no longer be treated as vans for income tax purposes leading to significantly higher benefits in kind as a result of being treated as cars. The UK Government has agreed to update the terms for transitioning from the Digital Services Taxes to Pillar One and HMRC has published the latest performance data for the quarter ended 31 December 2023. And finally, this week, the National Audit Office has published its report on tax measures to encourage economic growth.   Change in treatment of double cab pick-ups  HMRC has confirmed in its Employment Income Manual that from 1 July 2024, certain double cab pick-ups will no longer be treated as vans and will be classed as cars for income tax purposes.   According to the guidance in the Employment Income Manual, from 1 July 2024, HMRC will no longer interpret the legislation that defines car and van for tax purposes in line with the definitions used for VAT purposes. This VAT approach for double cab pickups differentiated the treatment based on payload, with anything under one tonne classified as a car, and anything a tonne or more as a van. This rule was replicated as a pragmatic way of resolving the primary suitability and classification of double cab pickups. Going forward, classification of double cab pickups will therefore need to be determined by assessing the vehicle as a whole at the point that it is made available to determine whether the vehicle construction has a primary suitability as per the two-part test outlined at EIM23115 onwards.   As a result, from 1 July 2024, most if not all double cab pickups will be classified as cars when calculating the benefit in kind. This is because typically these vehicles are equally suited to convey passengers and goods and have no predominant suitability.   Transitional arrangements will apply for employers who have purchased, leased, or ordered a double cab pickup before 1 July 2024, meaning that they will be able to rely upon the previous treatment until the earlier of disposal, lease expiry, or 5 April 2028. The position prior to 1 July 2024 remains unchanged as outlined at EIM23150.   Digital Services Taxes and transition to Pillar One  The UK, together with Austria, France, Italy, and Spain, has agreed to update the terms for transitioning from their Digital Services Taxes to Pillar One and have also published a joint statement on the transitional approach.  In 2021, 130 countries of the G20/OECD Inclusive Framework agreed on a two Pillar package of reforms to the international tax framework. In support of that, in a joint statement in the same month, the US, Austria, France, Italy, Spain, and the UK announced the terms of a political compromise on the transition from existing Digital Services Taxes to the new multilateral solution and to continuing discussions through constructive dialogue.  In light of the continuing multilateral negotiations at the G20/OECD Inclusive Framework, those same countries recently announced an extension of the political compromise set forth in the October 2021 joint statement through to 30 June 2024 which is consistent with the revised timeline.   Latest HMRC performance data  The latest HMRC quarterly performance data has been published and specifically data in relation to the quarter ended 31 December 2023. Monthly performance data is also available for the month ended 31 December 2023.   The Institute continually discusses HMRC service levels with HMRC and welcomes your feedback at any time by email. We recently requested feedback in relation to the most recent self-assessment filing deadline and are still accepting feedback on this until the end of this month. Members are encouraged to get in touch and share their experiences to enable the Institute to engage more effectively on their behalf with HMRC. 

Revenue is urging PAYE taxpayers to finalise their 2023 tax position as soon as they can, to ensure that they have claimed all tax credits and reliefs they are entitled to and receive any refund they are due. Health expenses, rent tax credit and mortgage interest tax credit can all be claimed via Revenue’s online MyAccount service. PAYE taxpayers are also reminded that they need to inform Revenue of any additional income which they have earned outside the PAYE system.