Revenue has published a new Tax and Duty Manual to provide guidance to filers submitting the annual VAT Return of Trading Details (RTD). Information is provided on the completion of the return, amending an RTD, compliance measures and addresses specific queries raised about VAT RTD filing.  

As previously reported, taxpayers have until 1 May 2024 to agree a Phased Payment Arrangement (PPA) with the Irish tax authorities to repay tax debt held within the Debt Warehousing Scheme.  However, some changes to the scheme are expected following comments last week from Minister for Finance, Michael McGrath TD, as he urged businesses to engage with Revenue. The remarks follow reports that businesses in certain sectors will face difficulties in repaying the warehoused debt. Revenue’s stated priority is to assist taxpayers in addressing the payment of their warehoused debts as flexibly as possible and are encouraging taxpayers to engage with officials now to address the debt position.  The Institute will keep members apprised of any updates via Tax News. The Debt Warehousing Scheme is currently in Period 3, running from 1 January 2023 to 1 May 2024, with interest accruing at 3 percent per annum on the unpaid debt. The 3 percent interest charge will be incorporated into the PPA for its duration. Where there is no PPA, the interest will be charged retrospectively.   Taxpayers are reminded that while they have until 1 May 2024 to agree a PPA with Revenue, they can make interim payments during this period, and also request for the offset of any refunds owing against the balance of tax warehoused.   Revenue has prepared a number of ‘How to” videos in relation to the PPA process which are now available on the Revenue website (link to videos).   The Institute will continue to keep members updated via Tax News.

Revenue has updated the Tax and Duty Manual for returns by employers in relation to reportable benefits under the Enhanced Reporting Requirements (ERR) which came into effect on 1 January 2024.   The updated guidance contains information about the service for compliance approach to be taken by Revenue to support businesses with the regime until 30 June 2024 as set out in a press release. During this time, Revenue will not be operating any compliance programmes in relation to the ERR and will not seek to apply any penalties for non-compliance.   The revised guidance also prescribes the reporting period, the form, and other particulars or documents that will apply in regard to reportable benefits. 

The Institute, under the auspices of the CCAB-I, made representations on behalf of members at last week’s meeting of the TALC Collection subcommittee. Among the issues discussed, Revenue provided updates on the implementation of the Enhanced Reporting Requirements for employers, the Debt Warehousing Scheme and the vacant homes tax. Revenue also reminded the group of the costs to which the VAT flat rate farmer scheme applies. Revenue is aware of an issue in the Statement of Net Liabilities process and will be contacting the affected taxpayers.  Enhanced Reporting Requirements for Employers (EER)   Despite the CCAB-I's concerns over the introduction of ERR, Revenue has advised us that the requirements will enter force from 1 January 2024. In the meantime, Revenue intends to go live with the reporting portal in the second week in December. In the meantime, Revenue will continue to hold information webinars up to 14 December 2023 on the new  requirements for employers for agents and employers.   Revenue issued e-Brief 254/23 this morning referencing an update to Revenue’s guidance on the small gift exemption, which include examples of how ERR will apply.   A recent snap poll of our members last week has indicated that 60 percent of organisations are not ready for the Enhanced Reporting Requirements. As the 1 January 2024 deadline approaches, we continue to meet with Revenue to discuss implementation and guidance. We will continue to keep members updated via Chartered Accountants Tax News.   Debt Warehousing Scheme   Revenue reported that the total debt warehoused in the scheme was €1.8 billion consisting of over 57,000 businesses, 67 percent of which owe less than €5,000 each. Over 5,500 businesses owe a combined €1.5 billion, each owing in excess of €50,000. Revenue is continuing its telephone outreach campaign contacting businesses owing in excess of €50,000.   The Debt Warehousing Scheme is currently in Period 3, running from 1 January 2023 to 1 May 2024, with interest accruing at 3 percent per annum on the unpaid debt. The 3 percent interest charge will be incorporated into the phased payment arrangement (PPA) for its duration. Where there is no PPA, the interest will be charged retrospectively.   Taxpayers have until 1 May 2024 to agree a PPA with Revenue and are reminded that they can make interim payments during this period, and also request for the offset of any refunds owing against the balance of tax warehoused.   To assist taxpayers and their agents in quantifying the PPA instalments and interest payments, Revenue is providing a PPA calculator on its website. Revenue is encouraging taxpayers to engage now in the PPA process as there is flexibility in terms of payment terms, amounts and downpayments. In addition, payment breaks can be arranged once the PPA has been commenced. A nominal downpayment amount of 0.1 percent of tax and interest can be input using the online application system to commence the process of engagement and negotiation with the caseworker.   Revenue has prepared a number of ‘How to” videos in relation to the PPA process which are now available on the Revenue website (link to videos).   Vacant Homes Tax  Revenue provided current statistics on the Vacant Homes Tax (VHT) that was due to be reported on by 7 November 2023. Of the 50,000 properties reported to Revenue, only 5,000 properties were declared vacant. Revenue wishes to remind property owners that there is only an obligation to file a VHT return where the property is vacant.  Of the 5,000 declared to be vacant, 2,000 properties have been claimed to be exempt VHT. The VHT liability on the remaining 3,000 properties is due for payment by 1 January 2024.  Earlier in the year, Revenue wrote to owners of some 25,000 properties to advise them of the actions they needed to take, where the data available to Revenue indicated that the recipient may have a liability to Vacant Homes Tax (VHT). Revenue received responses from 45 percent of this cohort. Revenue intends to review the non-responders after the due date for payment of VHT, 1 January 2024.  Statement of Net Liabilities  Revenue is aware of some 1,000 instances in the Statement of Net Liabilities process where an offset of 2022 Income Tax refund against 2023 Preliminary Tax was selected but the refund issued, resulting in an underpayment of 2023 preliminary tax. Revenue will be contacting the affected taxpayers.  VAT Flat Rate Farmers Scheme  Farmers who are not registered for VAT are not, in the normal course, entitled to credit for, or repayment of, VAT incurred by them on their business inputs. However, a flat-rate farmer, who would not otherwise be entitled to reclaim VAT on costs incurred for the purpose of their farming business, can reclaim VAT on certain costs in accordance with Value-Added Tax (Refund of Tax) (Flat-rate farmers) Order 2012. Revenue wishes to remind farmers, and their agents, that VAT reclaimable is that VAT paid in relation to costs incurred only on:  (a) the construction, extension, alteration or reconstruction of that part of the building or structure which was designed solely for the purposes of a farming business and has actually been put to use in such a business carried on by him or her,  (b) the fencing, drainage or reclamation of any land which has actually been put to use in such a business carried on by him or her, or  (c) the construction, erection or installation of qualifying equipment for the purpose of micro-generation of electricity for use solely or mainly in his or her farming business.  It is to be noted that outlay for other purposes, such as on the acquisition of milk bulk tanks, feed bins, milking parlour equipment, automatic scrappers and automatic calf feeders do not come within the scope of this refund order. 

From next year, individual taxpayers will see more in their pockets as a result of the planned reductions in national insurance contributions However, today’s Autumn Statement featured little in the way of immediate tax cuts and supports for small and medium sized businesses As a region, Northern Ireland continues to be left behind on key issues and supports   22 November 2023 – Today’s Autumn Statement was a missed opportunity to provide struggling businesses with tax incentives and supports which would allow them to grow and thrive, according to Chartered Accountants Ireland. The Institute, which represents almost 5,000 members in Northern Ireland, more than two thirds of whom work in business, made these remarks as Chancellor Jeremy Hunt delivered his Autumn Statement in Westminster earlier today. Commenting, Janette Burns, Chair of the Northern Ireland Tax Committee of Chartered Accountants Ireland said:  “Today’s Autumn Statement was clearly delivered with one eye on a general election next year. More cash in people’s pockets after the cuts in national insurance take effect from January and April next year are positive and will also help reduce the cost of employment. But today the Chancellor did not deliver the same level of tax supports that we know many small businesses urgently need and want as they continue to grapple with high inflation. Confirmation that companies will be able to fully expense the cost of capital investment in new plant and machinery against profits permanently, and beyond the original end date of 31 March 2026, is a bold move and will provide the certainty needed for major investment plans, which in turn will bolster the economy and productivity. But this is only of real benefit to larger companies".  What’s needed is targeted incentives and supports for small and medium businesses. For example, Northern Ireland’s hospitality sector could have benefited from a reduction in the 20% VAT rate. Just a few miles down the road in Ireland, the rate is 13.5% and many other European countries have much lower rates than the UK. When coupled with high food prices, this makes it very difficult for Northern Ireland hospitality businesses to compete.   Paul Millar, Chairman of Chartered Accountants Ulster Society added:  “The relief available to SME companies which incentivises R&D activity was reduced by almost 34% from April this year. We urge the Chancellor not to further reduce relief this for genuine innovation activity as part of the plans announced today to merge the two current schemes. This is just another example of where the Chancellor could have taken the opportunity to set out a detailed roadmap for this relief which would have provided certainty to those investing in R&D.  In recent years Northern Ireland businesses have shown how adaptive and resilient they are. This was highlighted at the recent investment conference which showcased the brightest and the best we have to offer. But more needs to be done. The Government needs to recognise and reward this by establishing a pipeline of tax supports and incentives to enable businesses to truly grasp the entrepreneurial mindset which we know would help Northern Ireland crystallise all the opportunities that are there for the taking. Let us not forget that Northern Ireland also has legislation potentially within its grasp to reduce its corporation tax rate to match that in the Republic. Innovation, creativity, and a more entrepreneurial approach will benefit all here by driving economic growth, and job creation.  The time is ripe to help Northern Ireland level up. But this cannot begin until we have our politicians back in Government. Once again, we urge them to look at the bigger picture. We echo the recent sentiment that political decisions should not affect operational decisions. But this equally applies to the business of doing what is needed to help grow our economy, and ultimately benefit all of our citizens.” Other information:- The main tax announcements by the Chancellor today were as follows:- National insurance contributions for the self-employed will reduce by 1% from 6 April 2024; Employee national insurance contributions will reduce by 2% to 10% from 6 January 2024; The 100% deduction available to companies for investments in new plant and machinery is being made permanent and will not end on 31 March 2026; and The UK’s SME and large company R&D tax relief regimes are being merged into one scheme which will commence from 1 April 2024.

Looking beyond headline corporation tax receipts to the health of the corporate sector is key Budget 2024 is a first step towards meaningful support for entrepreneurs Use of tax policy as a lever to encourage landlords to remain in rental market will work for society and the economy   High time for childcare to be recognised as part of critical infrastructure     10 October 2023 – Reacting to today’s Budget speeches, Chartered Accountants Ireland has highlighted the importance of supporting enterprise across the country. The Institute represents over 32,700 members, two-thirds of whom work in business.   Supporting enterprise   Director of Public Affairs, Dr Brian Keegan commented  “A healthy corporate sector is critical to Ireland’s economic growth. Without it, the state simply doesn’t have the tax receipts to effect change across so many areas of the economy and society.    “It’s positive to see the focus switching away from the headline corporation tax receipts and the enterprise sector being singled out and supported. These businesses create significant local employment and deserve the support announced today of a €250 million fund to help meet the increased cost of doing business in 2024.   “We hope that the scheme is introduced in a timely manner as businesses are already grappling with additional costs of statutory sick pay, impending pension auto-enrolment and a significant uplift in the minimum wage to €12.70.”  Supporting entrepreneurism   The Institute has also noted the uplift in the R&D credit from 25% to 30% as well as an enhanced capital gains tax relief for angel investors. It states that these measures send the signal that Ireland is open for business and wants to support entrepreneurism.  Dr Keegan continued  “The R&D tax credit has been hugely successful in encouraging research and innovation and creating employment. New capital gains tax reliefs for angel investors should result in early funding being made available to businesses when they need it most – at inception. There have been few new initiatives for the corporate sector in the past decade, and it was positive today to see recognition of the sector to Ireland’s economy.”   Tackling housing  The lack of adequate, affordable, reasonably located housing for staff is one of the biggest barriers to expansion reported by Chartered Accountants Ireland members. The Institute said that today’s tax break of €600, rising to €1,000 over three years, announced for small, private landlords if they remain in the rental market will help to boost Ireland’s housing supply. Cróna Clohisey, Tax and Public Policy Lead said  “Small landlords are an essential feature of a fully functioning residential property market, and properties owned by these landlords are more likely to be in regional, less densely populated parts of the country, providing much needed rental stock in areas that are not as attractive to institutional investors.  “Today’s announcement for landlords will help stabilise the rental market and give more certainty to tenants but also importantly make it more attractive for a small private landlord to enter the rental market. Combined with an increased rental tax credit, the measures will go some ways to helping people access housing, and it will work for society and the economy.”  Childcare as a critical infrastructure issue   Today’s announcement of an increase in the national childcare subsidy (NCS) from €1.40 to €2.14 as well as extending the NCS to certain childminders will help with the cost of childcare but will not address significant capacity constraints within the market.   Clohisey continued  “The cost of childcare is unaffordable for many working parents and today’s announcement to increase the NCS from September 2024 is welcome. However, a survey of our membership last month shows that in addition to cost, the biggest challenge working parents face is a lack of available childcare places.      “While a commitment was made today to address supply issues through core funding, we are asking government to recognise that childcare provision is part of the critical infrastructure necessary for a functioning economy. The crisis needs to be addressed with a long-term strategy with children at the forefront, that adequately funds the sector, increases capacity, and supports working parents.”    ENDS      

The Minister for Finance, Michael McGrath TD and the Minister for Public Expenditure and Reform, Paschal Donohoe TD, will announce Budget 2024 on Tuesday 10 October 2023. We will issue our Budget 2024 newsletter tomorrow evening covering all the main points. You can keep up-to-date with the announcements by visiting the Institute's Budget 2024 landing page.  

As reported last week, Revenue is continuing to issue notices to employers’ ROS inboxes, inviting them to register for webinars on the new Enhanced Reporting Requirements (ERR) for employers. The notice will contain a link to Eventbrite where a free ticket can be booked to attend a webinar on a suitable date and time. These webinars are scheduled to take place over the next 8 weeks. A sample event invitation can be viewed here.  The Institute has emphasised to Revenue the need for detailed and timely guidance for employers to prepare for the new reporting requirements. We will continue to liaise with Revenue and inform members via Tax News.   

In Irish news, the Institute has informed the Minister for Finance of members’ concerns with the proposed new enhanced reporting requirements and we give you an update from the recent meeting of the Tax Administration Liaison Committee Collections subcommittee. In UK news, the Autumn Statement will take place on Wednesday 22 November, and the Institute is discussing with HMRC the 31 October 2023 deadline for the end of the VAT margin scheme in respect of certain second-hand cars.  In International news, the OECD publishes the 2023 Secretary General tax report.  Ireland The Institute, under the auspices of the CCAB-I, has written to the Minister for Finance, Michael McGrath T.D., to highlight significant concerns our members have about the proposed introduction of Enhanced Reporting Requirements. Read our update from the September 2023 meeting of TALC Collections subcommittee. UK Last week the Chancellor of the Exchequer announced that the Autumn Statement will take place on Wednesday 22 November. The Institute is discussing with HMRC the 31 October 2023 deadline for the end of the VAT margin scheme in respect of certain second-hand cars. International This year’s Secretary General tax report has been published providing an update on the progress on the OECD’s 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 which features updated guidance and publications and the news that the UK has agreed a deal to associate to Horizon Europe.     

Revenue has published a Tax and Duty Manual which highlights further changes to the 2022 income tax return (2022 ROS Form 11).  The changes include a workaround, advocated by CCAB-I, to enable the filing of the 2022 Form 11 where rental income is paid to non-resident landlords and there is no collection agent, or the tenant has not withheld tax from rent paid.  Other changes include pre-population of certain PSWT information, a new sub-panel to claim the rent tax credit as well as updates to the tax credits panel to reflect increased values, warning messages and some changes to the EII, SURE and SCI sub-panels. The 2022 ROS Form 11 has been available since 1 January 2023 but is updated on an ongoing basis to include additional prepopulated information from third parties.  Readers are reminded that there is no ROS offline version of the 2022 Form 11 but it can be prepared offline using the Return Preparation Facility (RPF). Further information is available in eBrief No.177/23.  Revenue’s Tax and Duty Manual – A Guide to Self-Assessment- has also been updated at paragraph 4 to reflect the available online payment options.

In Irish news, Revenue has updated its website to include information on the new enhanced reporting requirements for employers and has provided a note regarding the tax treatment of GMS income of GPs in certain circumstances. In UK news, HMRC recently published its 2022/23 annual report, and has estimated error and fraud in R&D as it publishes its approach to R&D compliance. In International news, OECD research suggests a modest recovery in tax revenues in the Asia-Pacific region post-pandemic. TaxNews will be taking a seasonal break for the next few weeks, returning 4 September 2023.  Ireland Revenue updated its website to set out information on the new enhanced reporting requirements for employers to report details of non-taxable small benefits, travel and subsistence and remote working allowances paid to employees and directors from 1 January 2024. Revenue has provided us with a note in relation to the tax treatment of GMS (General Medical Services) income of GPs in circumstances where GMS payments have been mandated to a medical practice by a GP that is an employee of, or partner in, the practice. UK HMRC has published its annual report and accounts for the year ended 31 March 2023 together with the HMRC Charter annual report 2022/23. HMRC estimates error and fraud in R&D and publishes approach to R&D compliance. International OECD research observes modest recovery in Asia-Pacific tax revenues. 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 earlier this week to discuss CCAB-I’s pre-Budget 2024 submission. 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 several of the business tax reliefs. 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 and also to retain and attract talent was also highlighted.