This week we bring you HM Treasury’s response to the Institute’s letter on changes to the geographical scope of agricultural property relief and the latest report from the Administrative Burdens Advisory Board (“ABAB”) has been published. At a recent meeting HMRC advised that although the marriage allowance online form is not currently mandatory, using the form may mean that claims are processed quicker. HMRC has also issued another reminder email on the recent alcohol duty changes which took effect from 1 August 2023 and a detailed update has been published on the actions identified at the February 2023 HMRC Stakeholder Conference. And finally, the latest news and information bulletin from HMRC is available.  HM Treasury responds to letter on changes to the geographical scope of agricultural property relief  At end of August, the Institute’s Northern Ireland Tax Committee wrote to the Financial Secretary to the Treasury to express its concerns in respect of the proposal to restrict the geographical scope of agricultural property relief (“APR”) and woodlands relief (“WR”)  from April 2024. HM Treasury has now responded to that letter which you can read on our website.   The Institute recently submitted evidence to the House of Lords Finance Bill Sub-Committee  inquiry into Finance Bill 2023-24 and once again raised its concerns in relation to the APR and WR draft legislation, in addition to the proposal to merge the UK’s R&D tax relief schemes from April 2024. Members will be able to read this submission when the Committee confirms it has accepted the submission as evidence.  Latest report of the Administrative Burdens Advisory Board (“ABAB”)  The Tell ABAB Survey report was recently published and details responses to April’s ‘Tell ABAB Survey’, which this year had a record 7,500 responses. In previous years, responses have averaged around 3,000. Of the responses, 86.9 percent came from businesses and 12.7 percent from tax agents. This represents a significant shift from 2022 when 67.8 percent of responses were from businesses and 32.2 percent from agents.  Board members come from a range of businesses and professions, with their goal being to make “a noticeable difference for small business by supporting HMRC in:-  helping to reduce administrative burdens; and  ensuring that the tax system is easier, quicker, and simpler.”  The key findings from the survey reveal that burdens on business remain a significant concern and they continue to increase year on year. Off-payroll working rules, Making Tax Digital and changes in importing and exporting procedures have contributed to increasing burdens during the survey period. Additionally, businesses state that they have not witnessed benefits of digitalisation yet.  The shift to nomadic working poses challenges. According to the survey, 59.5 percent of those who worked from home or had employees working from home or as nomadic workers, were familiar with HMRC’s working from home guidance. Whilst this percentage might look relatively high, these workers now form a significant part of the workforce, with over 63 percent of respondents stating that they were working from home or as nomadic workers.  There is definite evidence from the survey that guidance to business is improving. Many respondents rated the ease of understanding written correspondence and the information on YouTube videos highly. Whilst there are still problematic HMRC forms, the numbers here are relatively low and although there are remaining frustrations with GOV.UK, these are also relatively low.  Another important message is that respondents continue to express a strong desire to speak to a human advisor. Satisfaction levels on response times for telephone calls remains low, with respondents being dissatisfied with this service for that reason. 

Thursday 5 October 2023 is the deadline to notify HMRC of a new source of income or gain for 2022/23.  Those required to register for self-assessment are:- Anyone who is self-employed or a sole trader which commenced in 2022/23; Anyone not self-employed but who had a new source of income or a gain in 2022/23; or  Anyone who became a partner in a partnership, or a new partnership commenced in business in 2022/23.   Failure to register by the deadline can result in HMRC charging a failure to notify penalty.   

Revenue is to write to the owners of approximately 25,000 properties to advise them of the actions they need to take, where the data available to Revenue indicates that the recipient may have a liability to Vacant Homes Tax (VHT). Revenue has provided a sample of the correspondence which will issue in the coming days.    If a property owner receives this letter, they are required to confirm the status of their property. This is the case even if their property does not meet the relevant conditions for the tax to apply. Revenue will use the information provided to update its VHT register.   Not all property owners who will be liable to VHT will receive a letter from Revenue. If a property owner has a liability to VHT but does not receive a letter, they are still obliged to file a VHT return and complete their self-assessment obligations. A report detailing the basis on which Revenue identified a subset of those who may potentially have a liability to VHT can also be accessed here.  Property owners are responsible for determining whether they have a liability to VHT for a chargeable period and satisfying their pay and file obligations. To assist property owners in understanding their obligations in respect of VHT, Revenue has published comprehensive guidance on its website in addition to the recently published Tax and Duty Manual.  Revenue has advised that VHT will only apply to properties which are residential properties for the purposes of Local Property Tax (LPT) and have been used as a dwelling for less than 30 days in a chargeable period. VHT will not therefore apply to:  derelict or uninhabitable properties,  residential properties which were inhabited for 30 days or more in the relevant chargeable period, or  residential properties which were sold or subject to a qualifying tenancy during the relevant chargeable period.  According to Revenue’s press release, those who own a vacant residential property which does not fall within one of the above exclusions are required to confirm if their property is liable to the tax as soon as possible, and by 7 November 2023 at the latest.  During the confirmation process, property owners will have the option to claim an exemption from VHT, where applicable. It is important that owners with properties which do not fall within any of the above exclusions, but may still be otherwise exempt from the tax, file a return in order to meet their VHT obligations and claim their exemption.  As previously advised, the first chargeable period for VHT is 1 November 2022 to 31 October 2023.   VHT is set at a rate equal to three times the property’s standard LPT rate, that is, the LPT rate for the relevant band before any Local Authority Adjustment factor. The amount is calculated by the Revenue system when a return is submitted. All VHT requirements are in addition to any LPT requirements which apply to a property.  There are a range of options available to pay VHT, including:  spreading the payments over 2024 by monthly direct debit,  paying in full through an Annual Debit Instruction (ADI), and  paying in full by credit or debit card.  Property owners who intend paying by monthly direct debit should instruct Revenue by 1 January 2024. Monthly direct debit payments will then be deducted each month from 15 January 2024 to 15 December 2024. ADI payments will be taken on 21 March 2024 unless the property owner elects for an earlier date. Payment by personal credit or debit card will be processed on the day the payment details are provided.    

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.  

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 also 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. 

In Irish news, the CCAB-I has written to the Taoiseach and Minister for Finance highlighting difficulties around the new rules concerning the tax treatment of GMS income of General Practitioners which take effect next year and Revenue has updated its process to allow for the automatic offset of RCT credits against tax liabilities. In UK news, from Monday 2 October, waiting times on the Agent Dedicated Line will increase and the 2022/23 self-assessment registration deadline is approaching next week. In International news, the OECD has published comments received on Amount B of Pillar One.  Ireland The Institute, under the auspices of the CCAB-I, wrote to the Taoiseach, Leo Varadkar T.D., and the Minister for Finance, Michael McGrath T.D., with concerns about the tax treatment of General Medical Services (GMS) income of General Practitioners (GPs) which will change from 1 January 2024. Revenue has updated its process to automatically offset relevant contracts tax (RCT) credits against tax liabilities as they fall due and tax returns are filed. UK From Monday 2 October, waiting times on the Agent Dedicated Line are expected to increase. The 2022/23 self-assessment registration deadline is approaching next week. International The OECD has published comments received on Amount B of Pillar One 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.          

Back in July, the OECD invited public comments on Amount B under Pillar One. Amount B relates to the rules which aim to simplify and streamline the application of the arm's length principle. The OECD has now published the comments received. 

Next week representatives from the Institute’s Northern Ireland Tax Committee and a number of VAT specialists from local member firms are meeting with HMRC’s VAT policy team to discuss the end of the second-hand motor vehicle VAT margin scheme on 31 October 2023. We need your assistance in gathering supporting evidence to lobby for an extension to the scheme’s deadline. Read below for the supporting evidence requested by HMRC. The meeting will also be an opportunity to discuss the new second-hand motor vehicle VAT related payment scheme. Feedback on the end of the VAT margin scheme and the new VAT related payment scheme should be emailed to the Institute by the end of Monday 2 October 2023. As advised earlier this month, only vehicles moved from Great Britain to Northern Ireland before 1 May 2023 which are sold by 31 October 2023 qualify for the VAT margin scheme; if sold after 31 October 2023, VAT will need to be charged on the full selling price of the vehicle, and not the margin made. We are aware that many second-hand car dealers have significant pre-1 May 2023 stock of these vehicles, which are selling very slowly due to the ongoing inflationary crisis and general economic conditions.   If sold after 31‌‌‌ October 2023, VAT must be accounted for on the full selling price of the vehicle as the conditions for the new second-hand motor vehicle payment scheme, which only applies to eligible motor vehicles moved from Great Britain to Northern Ireland after 30 April 2023, will not be met.  The Institute highlighted this issue to HMRC earlier in the month; as a result, HMRC has requested details or estimates in respect of the following:- The numbers of second-hand vehicles dealers in Northern Ireland had in stock on 1 May 2023 that were sourced from Great Britain; How many of these remain unsold at present, and their estimated value; How many are likely to be unsold on 31 October 2023, and their estimated  value; and If there is any category of vehicle that may be particularly affected by having a cut-off date of 31 October 2023 after which the margin scheme could no longer be used. We recognise that many dealers may not be able to provide all of the detail requested in such a short period of time, especially the category of vehicle, but any information or evidence to support the difficulties being experienced in selling these vehicles would be appreciated.

Last week, HMRC announced via the latest Agent Update and an email to agents that from next Monday 2 October 2023 it will no longer aim to operate to a 10-minute service level on the Agent Dedicated Line (“ADL”), therefore waiting times may vary depending on how many agents are calling HMRC at any one time. The Institute wishes to make clear that it does not agree with HMRC that this change will allow an improvement in HMRC services. The announcement comes against the continuing backdrop of resource and budgetary pressures being experienced by HMRC. In addition to no longer working to a 10-minute wait time on the ADL, the announcement also confirms that from 2 October, information on call waiting times will be introduced, and PAYE queries will be re-routed to PAYE advisers, not those on the ADL. We have asked HMRC to provide more information on precisely what PAYE queries will be rerouted in order that agents may directly call the relevant helpline instead of calling the ADL and being rerouted. We have previously discussed the importance of the ADL with HMRC, and although the ADL will remain available, we are disappointed to see what will effectively be a reduction in service levels to agents. Coupled with the recent closure from 12 June to 4 September of the self-assessment (“SA”) helpline, we are concerned that this will have a serious impact on the ability of agents to support their clients in busy season in the next few months in the run up to the 2022/23 online SA filing deadline on 31 January 2024. The Institute will continue to discuss the impact of these changes, and HMRC service levels with HMRC. As the ADL changes take effect from next week, we want to hear from you about the impact that this change is having. Please get in touch by email to let us know so that we may represent your views at meetings with HMRC.

Thursday 5 October 2023 is the deadline to notify HMRC of a new source of income or gain for 2022/23. Last week HMRC also issued a reminder of this deadline. Those required to register for self-assessment include:- Anyone who is self-employed or a sole trader in a business which commenced in 2022/23; Anyone not self-employed but who had a new source of income or a gain in 2022/23; or Anyone who became a partner in a partnership or any new partnership which commenced in business in 2022/23.  Failure to register by the deadline can result in HMRC charging a failure to notify penalty.

This week we bring you an update from HMRC on the use of digital signatures and HMRC has published updated guidance on the patent box regime and senior accounting officer legislation. The advisory fuel rates which took effect from 1 September 2023 are available and HMRC has launched a new childcare manual. The House of Commons Treasury Committee has published a report following its inquiry on tax reliefs and new guidance on how to get a PAYE code adjusted for foreign tax has been published. HMRC has also provided an update on corporate criminal offence investigations and new Save As You Earn (“SAYE”) bonus rates and early leaver rates took effect from 18 August 2023. The latest Agent Update 112 is also available. Update on digital signatures Read the update below from HMRC on digital signatures. “HMRC accept digital signatures on the following forms: 64-8 (Agent Authorisation); Marriage Allowance; P87 and Hold Over Relief (HS295). For these forms, signatures signed on the screen of a digital device or displayed in a keyboard typed font will be accepted. All other claims and paper tax returns will still require a wet signature. Regardless of the type of signature, it must be provided by the taxpayer.  Where the taxpayer or agent submits a form or claim as part of a digital journey (e.g. submitting a tax return online) then their identity is verified as part of the digital journey and as such a signature is not required. During the Covid-19 pandemic, a number of easements were in place during this unprecedented national emergency. However, signatures are an important safeguard for taxpayers, which outside of a national emergency HMRC cannot dispense with.   HMRC accept a scan of a wet signature on holdover relief claims (form HS295) when this is attached to an online tax return.  In other circumstances we require a wet signature apart from those outlined above.   HMRC has issued guidance on record keeping. Records can be kept in a variety of formats: on paper, digitally or as part of a software program. However, there are some records that, by law, must be kept and preserved in their original form. For example, a C79 import VAT certificate (Record keeping for VAT notice 700/21). The Taxes Management Act 1970 s12B and the Finance Act 1998 Sch 18, para 22 provide further detailed information on record keeping including those records that must be preserved in their original form.   We are working on bringing the guidance together and will be issuing further updates in due course.”  Treasury Committee recommends review of tax reliefs The House of Commons Treasury Committee recently published the outcome of its inquiry into tax reliefs in a report which, unsurprisingly, concluded that the UK tax system is too complicated, and that the “huge and seemingly ever-expanding suite of tax reliefs” is an important factor in this. To promote a simpler, better value and more effective tax system which is less prone to abuse the Committee made the following recommendations:- a comprehensive and systematic review of existing tax reliefs to look for opportunities for simplification; HMRC should publish full costings of all tax reliefs; greater public consultation is needed on new and existing tax reliefs; ·non-structural tax reliefs, i.e., those designed to promote certain behaviour, should be classed as public spending, and scrutinised as such; and the Government should conduct five-year reviews of individual tax reliefs and commit to remove those reliefs that no longer serve their policy goal or are vulnerable to abuse. Relief for foreign taxes in PAYE codes If an employee works overseas, some overseas tax authorities may require their UK employer to deduct tax from the same earnings against which the employer also has to operate UK payroll. Where an employee’s PAYE code needs adjusted to give relief for foreign tax, HMRC advises the employee or their employer to make contact by phone, stating that their call relates to coding in accordance with section PAYE81715 of HMRC’s PAYE manual. HMRC release data on corporate criminal offence investigations HMRC has recently released updated data on the number of corporate criminal offence investigations in progress as at 30 June 2023. At that date, there were nine live investigations with a further 25 potential investigations under review, and 83 rejected. The Corporate Criminal Offences for failure to prevent the facilitation of tax evasion were introduced by Part 3 of the Criminal Finances Act 2017. With potentially unlimited fines for organisations found guilty of the offences, organisations must take their responsibilities seriously and put in place reasonable procedures to stop the facilitation of tax evasion. SAYE bonus rates According to the latest Employment Related Securities Bulletin, after the launch of the new Save As You Earn (“SAYE”) bonus rates automatic mechanism and specimen SAYE prospectus, new SAYE bonus rates and early leaver rate took effect from 18 August 2023. These are:- 3-year bonus rate: 1.1; 5-year bonus rate: 3.2; and early leaver rate: 1.42%. This is the first time that new participants will receive a bonus since 2014. Going forward, the rates will change on the 15th day following a change in the Bank of England Bank Rate. The next date the Bank of England may be expected to change the Bank Rate is next month as the Bank decided last week to maintain the base rate. HMRC will not routinely provide updates within Bulletins. However, the bonus rates, early leaver rate and the effective date of any change will be recorded in change in bonus rates for SAYE Share Option Schemes Agent Update 112 Get the latest guidance and information in Agent Update 112 including the following:- Alcohol Duty: apply the new duty rates and check the 2 new reliefs, before submitting a return this month; The Plastic Packaging Tax – mass balance approach consultation; Self-Assessment student loan deductions and payrolled benefits in kind; and Overlap relief – preparing for the new tax year basis.