The 2023 Adjudicator’s report confirms that despite a lower number of complaints about HMRC in 2022/23 (950 complaints compared to 1,029 in 2021/22), the upheld rate (including fully and partially upheld complaints where the AO did find something went wrong) increased to 47 percent, an increase of 15 percent. The role of the Adjudicator was created in 1993 to introduce an independent tier of complaint handling for HMRC, and various other Government bodies. The Adjudicator’s Office (“AO”) aims to provide a free, impartial, and independent service, and to investigate all complaints within their remit, and to resolve individual complaints whilst highlighting trends in both customer service, and complaint handling. The Adjudicator seeks to continue to push the various Government departments it reports on, including HMRC, to improve quality in complaint handling, so that people will only feel the need to escalate more sensitive and complex complaints to the AO. In its HMRC update and case studies section, the Adjudicator says that 2022/23 has seen HMRC recover its service standards post-pandemic “with varying degrees of success”. Although HMRC’s Customer Services Group has struggled with volume, and also significant pressure on resources “meaning that the recovery has slipped and is therefore ongoing.” According to the report, recovery in HMRC’s Customer Compliance Group has been quicker leading to a “two-tier level of service being provided in HMRC, depending on where your complaint sits.” The main reasons for taxpayer cases related to poor complaint handling by HMRC officials with the conclusion that for many, complaints were not being prioritised in HMRC’s Customer Service Group. Increasing numbers of taxpayers, often vulnerable, “are stuck in the complaints system for long periods with little or no meaningful response from HMRC.”  

The Spring Finance Bill 2023 (official title: Finance (No 2) Bill (Session 2022-23)) continues its passage through the parliamentary process with all remaining House of Commons stages completed since out last update, including Committee Stage, Report Stage, and Third Reading in the House of Commons. The Bill has now completed all House of Lords stages and is expected to receive Royal Assent tomorrow, Tuesday 11 July. The Government has also announced that “Legislation Day” will take place on Tuesday 18 July. On that day, the Government will publish draft legislation for inclusion in Finance Bill 2024, alongside explanatory notes, tax information and impact notes, responses to consultations and other supporting documents. It is expected that the draft clauses will largely cover pre-announced policy changes. Because the Spring Finance Bill is a ‘Money Bill’ the House of Lords cannot make any changes to it hence the text of the Bill is therefore essentially now final meaning it is substantively enacted for UK GAAP and IFRS purposes.

Tax revenues for the first half of the year were €40.9 billion, according to the recent June Exchequer figures. The figures represent a €4 billion increase (or 10.9 percent) on the same period last year. The 12-month rolling Exchequer surplus stands at €1.1 billion. The breakdown of tax revenues is as follows: Income tax receipts were €15.5 billion to end-June, €1.3 billion, nearly 9 percent higher than the first six months of 2022 and somewhat above profile; VAT receipts to end June were strong at €10.3 billion, €37 million (0.4 percent) higher than profiled and over 13 percent higher than to end-June 2022; and Corporation tax receipts of €10.55 billion have been collected to end-June, €1.8 billion or over 20 percent ahead of the same period last year, in line with expectations. Total gross voted expenditure to end-June amounted to €41.9 billion, €3.4 billion (8.7 percent) ahead of the same period in 2022. Commenting on the figures, the Minister for Finance, Michael McGrath T.D., said: “We have also today, published the Exchequer figures for the first half of the year. These show that, broadly speaking, we are where we expected to be in terms of tax revenue. Income tax and VAT remain robust, demonstrating the strength of our economy, but volatile corporation tax continues to pose a vulnerability for the public finances. The best way to ensure that we retain the fiscal firepower to address the issues of today and the challenges on the horizon is by maintaining a sensible budgetary policy that balances investment in our public services and infrastructure with the long-term sustainability of our public finances. The fiscal strategy for Budget 2024 that we have set out in the Summer Economic Statement today strikes that balance. Shortly, I will bring proposals to Government on the establishment of a long-term savings fund and a public investment fund to be utilised during an economic downturn.”

In this week’s EU exit corner, we bring you the latest guidance updates and publications relevant to EU exit. We also bring you key outputs from a meeting last week on the newly opened reimbursement scheme. The latest Trader Support Service and Borders Weekly Stakeholder bulletins are also available. Reimbursement scheme – more information As set out last week, the long-awaited duty reimbursement scheme was launched on 30 June. The Institute lobbied on the need to open the scheme for several years and is pleased to see this come to fruition. By way of reminder, the reimbursement scheme allows for reimbursement of tariffs paid on goods classed as being at risk which later became not at risk under the original Protocol, and on goods which will move in the new red lane which should originally have been green lane movements under the Windsor Framework. This includes the following scenarios:- Final sale of goods takes place in NI; Goods are consumed in NI; Goods are destroyed in NI; Goods are moved back to GB from NI; and Goods are exported to RoW (Rest of World) from NI. Chartered Accountants Ireland attended a meeting with UK government officials from HMRC and HM Treasury last week to discuss the reimbursement scheme in more detail. The below information was discussed in the meeting. In order to claim, the trader must gather evidence to support the claim and submit this to HMRC via an online application where a caseworker will consider the application. More evidence may then be requested by the caseworker in order to finalise and process the application. Claims can be made by: the importer for the original ‘at risk’ movement into NI, if they are established in the UK; or the appointed agent or representative acting on their behalf (if the original importer is not established in the UK, only their UK appointed agent or representative can submit the application). At the meeting it was once again confirmed that interest will not be paid on refunds received by traders; HMRC stated that the reason for this is that until the regulations underpinning the scheme were laid, there was no statutory basis on which claims for refunds could be made. The Institute is considering making representations on this given the known cash flow impact that delayed refunds have had for many traders since January 2021. It was also confirmed that reimbursements can be claimed for single or multiple movements. For goods moving from GB to NI, the full amount of the overpaid duty will be refunded. For RoW to NI movements, the duty repaid will be the difference between the UK and EU rates (if the EU rate is higher). The difficulty that some traders will have in providing evidence to support goods originally moved on the basis of “at risk” which subsequently become “not at risk” was discussed in detail, particularly for small items which often do not have a serial number and cannot be fully traced in terms of their end use. HMRC stated that they have not set out an exhaustive list of evidence which is required to support claims but were clear that using approximate apportionments will not be sufficient. Overall, HMRC will seek to be as pragmatic as possible to ensure the evidence provided is robust, whilst at the same time ensuring that the scheme is not open to abuse. It was pointed out that previous goods movements split between “at risk” and “not at risk” using the apportionment method on arrival into NI will be particularly problematic in terms of evidencing these becoming not at risk. In particular, the traceability of low-value non-serial numbered products brought into NI in bulk which then go into a parts store, and are used as required without any record kept, are likely to cause particular issues. HMRC is willing to discuss such cases in more detail. The deadline for making claims is three years from the point of the original duty being paid, where this is paid after 30 June 2023. For historic claims going back to 1 January 2021, the three-year window runs from 30 June 2023 to 30 June 2026. At the meeting HMRC also highlighted that the guidance on moving certain categories of steel into Northern Ireland without being subject to safeguard charges where relevant quotas are open has been updated. And finally, as the scheme is now open, we welcome your feedback on its operation and any issues you may be experiencing. Miscellaneous updated guidance etc. 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; Data Element 2/3: Document and Other Reference Codes: Licence Types – Imports and Exports of the Customs Declaration Service (CDS); Claim a waiver for duty on goods that you bring to Northern Ireland from Great Britain or countries outside the UK and EU; Classifying edible fruit, vegetables and nuts for import and export; Reference Documents for The Customs Tariff (Preferential Trade Arrangements) (EU Exit) Regulations 2020; Reference Documents for The Customs (Tariff Quotas) (EU Exit) Regulations 2020; Notices made under s32A of the Taxation (Cross-border Trade) Act 2018; Customs, VAT and excise UK transition legislation from 1 January 2021; 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); Border Force customs offices list; Summary of movements of goods into Northern Ireland from Great Britain 2022; Apply for a voluntary clearance amendment (underpayment) (C2001); Get proof of origin for your goods; and Check your goods meet the rules of origin.

The European Commission recently published a progress report on Pillar One. The Commission has stated that it “will do its utmost to ensure a timely and consistent implementation of Pillar One at EU level.”

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. 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.

The European Commission is calling for feedback on its proposal to amend to Council Regulation (EU) No 904/2010 regarding VAT administrative cooperation and combating VAT fraud. The feedback period will run until Thursday 3 August.

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.

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.