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 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.  

Revenue has issued a warning of a scam SMS (text message) purporting to come from Revenue seeking personal information from taxpayers in connection with a tax refund or seeking debit/credit card details. The Revenue Commissioners never send emails or text messages requiring customers to send personal information via email, text or pop-up windows. Further information is available here.

Last week, we posted an update on the new R&D tax credit filing requirements, including the specified return. To the extent it was not clear how the new forms will apply, it was confirmed at the recent R&D Discussion Group that the new Specified Return will need to be completed and returned via MyEnquiries along with the Form CT1 2022 where: An acceleration of the second and third instalment is claimed in accordance with section 766(4D) or 766A(4C) TCA 1997 A R&D tax credit is claimed in accordance with section 766C TCA 1997 A R&D tax credit is claimed in accordance with 766D TCA 1997. As mentioned last week, the Form CT1 2023 is expected by 10 July and will include sections reflecting the updates to the R&D tax credit.

The Minister for Finance, Michael McGrath TD, has published an analysis by his department entitled Future-proofing the Public Finances – the Next Steps. A key recommendation in the analysis is the establishment of a long-term public savings vehicle to ensure that windfall corporation tax receipts are not used to fund permanent expenditure increases or tax reductions. Secondly, such a fund could contribute to meeting budgetary pressures in the future. The report also notes that, under almost all of scenarios simulated, the drawdowns from such a long-term public savings vehicle would still not be sufficient to cover the full increase in ageing-related costs expected by 2030. Therefore further reforms to the pension system – including increases to the rate of PRSI – will be required. Commenting on the scoping paper, Minister McGrath said: “The analysis published by my department today highlights some of the vulnerabilities the public finances face from both revenue and expenditure perspectives. On the revenue side, while the headline budgetary accounts look to be in very good shape, this is largely the result of corporation tax receipts, which have increased more than five-fold in the past decade. My department estimates that around half of these receipts could be potentially transitory in nature. Looking ahead, Government is also aware of the major expenditure challenges on the horizon. Shifting demographics and adapting to the climate and digital transitions will impose large costs on the public finances. While the Irish demographic picture is currently favourable, developments in the coming decades will mean that we will be spending significantly more just to maintain the current level of service, all because of an ageing population. The paper my department published today outlines some of the options available to Government to help to mitigate against these risks to the public finances. Taking into account this analysis, it is my intention to bring forward proposals for a long-term savings vehicle which will be used to pre-fund part of the future costs of structural change. The paper also discusses different approaches to using the windfall receipts including for a new long-term savings vehicle, and using a portion to pay down debt and for additional, targeted capital investment. I was pleased to brief cabinet on this paper yesterday. Subject to government approval, setting up such a long-term savings vehicle will require primary legislation.” Further information is available on gov.ie.

The Minister for Finance, Michael McGrath TD, has welcomed European Commission approval of the enhancements to the Temporary Business Energy Support Scheme (TBESS) announced in Finance Bill 2023.The approval has been received under the State Aid Temporary Crisis and Transition Framework (TCTF). The enhancements announced in the Finance Bill (and which were called for by the Institute) include: Extending the scheme to 31 May 2023, with the option to further extend the scheme by Ministerial Order to not later than 31 July 2023, Reducing, with effect from 1 September 2022, the energy cost threshold for qualification for the scheme from a 50 percent increase in electricity or gas costs to a 30 percent increase, and Increasing, from 1 March 2023, the level of relief from 40 percent to 50 percent of eligible costs. The time limit for making claims under the scheme has also been extended. The enhancements are in addition to amendments made in February 2023 to increase the monthly limit to €15,000 per qualifying business in relation to a trade or profession, subject to an overall cap of €45,000 in cases where a business is carried on from more than one location. These changes took effect from 1 March 2023. Commenting, Minister McGrath said: “I am pleased to note that the European Commission has approved the enhancements to TBESS brought forward in Finance Bill 2023. These changes, in particular the lower entry threshold for the scheme, which is backdated to September 2022, will ensure that additional businesses can benefit from this vital support and I encourage businesses who have not already done so to register for and submit claims under the scheme.” As of 20 April, 28,035 businesses have registered for the scheme. Revenue has approved 35,613 claims to the value of €77.6 million.

Revenue has updated the TBESS guidelines to reflect the enhancements introduced in Finance Bill 2023. A qualifying business can submit claims on Revenue’s Online Service (ROS) for the March and April 2023 claim periods from Monday 17 April 2023. From the week commencing 24 April 2023, Revenue will begin reassessing claims already submitted for the period from 1 September 2022 to 28 February 2023 based on the revised 30 percent energy costs threshold. This means that it will not be necessary for a business to revise claims already submitted for these periods. Once claims have been reassessed, the business will receive a notification to their ROS inbox confirming the reassessment has occurred after which the payment due to the business will be processed. The updated TBESS guidelines also contain deemed reference unit prices for the May 2022 reference period, as provided by the Sustainable Energy Authority of Ireland (based on data provided by suppliers and the Commission for Regulation of Utilities). Further information is available in eBrief no. 096/23.

Revenue has published a new Tax and Duty Manual providing guidance on the operation of the digital games tax credit, as provided for in section 481A TCA 1997 and the Digital Games Regulations 2022. The aim of the measure is to provide an incentive to digital games developers to produce digital games that contribute to the promotion and expression of Irish and European culture. The relief is a corporation tax credit and it may be claimed by digital games development companies.    The relief is available from 22 November 2022 in respect of certain expenditure incurred by digital games development companies on the development of eligible digital games provided certain conditions are met.

Revenue has updated its process for identifying and contacting taxpayers and agents in instances of non-filing of Income Tax returns.  Previously a copy Reminder to File Notice issued to an agent for each notice issued to their linked clients.  To improve efficiency and enhance communications to agents, these agent copies will no longer issue. Instead, a single ROS inbox notification will be sent to each agent, listing out their clients based on linked TAIN that were issued the notice, with a reminder to the agent to file for their clients. The reminder to file outstanding Income Tax returns for the 2021 tax year were issued to taxpayers last week and agents will receive their respective notification lists in the coming days. A sample of the agent notification can be viewed here. 

Revenue has updated its Tax and Duty Manual regarding the tax treatment of the reimbursed travel and subsistence expenses to office holders and employees. The updated guidance clarifies that hybrid employees working part-time from home cannot claim expenses for travelling between home and the office. It also includes the new civil service rates effective from 1 September 2022.

Revenue has updated its Tax and Duty Manual regarding the payment and receipt of interest and royalties without deduction of income tax. The updated manual now includes: Reference to the International Monetary Fund in section 8 'Payments to certain statutorily tax-exempt bodies', and In respect of applications under section 246(3)(d) TCA 1997: To require completed Forms RTS 1A and supporting documents accompany applications, To remove the postal contact address, To provide My Enquiries contact information.

The Department of Finance has published the minutes of the recent Business Tax Stakeholder Forum. The Forum is limited in scope to discussing direct business taxation. It is consultative in nature with the focus on knowledge and information sharing, including reflecting on tax developments at the EU and international level as well as domestic corporation tax legislation. As previously reported, the Institute, under the auspices of the CCAB-I, was represented at the inaugural meeting of the Business Tax Stakeholder Forum. The meeting provided an opportunity for the Institute to engage with the Department of Finance in a constructive and meaningful way. While the forum is not a decision-making body, it is intended to complement the wider engagement process between the Department and its business tax stakeholders.