The Platform for Collaboration on Tax (PCT) has released the final version of the Tax Incentives Principles. These aspirational principles are intended to support governments in developing the rationale for tax incentives and in strengthening their design, implementation, and evaluation.

Revenue has updated the Agents Guide to the Collector General’s Division to include two new sections dealing with dividend withholding tax and value added tax. The updated guide also includes details of the pay and file extension date for 2025 and relevant contact details for stamp duty. Furthermore, the guide confirms that the High Wealth & Financial Services Division with Revenue now deals with queries from medical insurers relating to TRS for medical insurance.

Revenue issued a press release last week confirming that the filing deadline for the annual Residential Zoned Land Tax (RZLT) returns for 2025 has been extended to 30 May 2025.  The extension provides taxpayers with additional time to complete the filing process. Revenue noted positive levels of engagement from site owners to date, with liabilities of approximately €12 million having been paid. However, Revenue is aware that some site owners who have commenced the process to register for RZLT have not yet submitted a return. The press release provides information on registering for the RZLT and submitting a return, together with links to information resources on Revenue’s website. In Tax News last week, we provided details of RZLT online information sessions being run by Revenue. A previous news story in April covered  quick start guide to RZLT. Site owners are reminded that there is a 24-hour turnaround time between completing the RZLT registration and issuance of the site ID required to complete the RZLT return hence early engagement is encouraged. Taxpayers using an agent/advisor to assist them in filing their RZLT return should note that the agent/advisor must be linked to their Revenue record through the Agent Link Manager application process.

Last week, the Institute, under the auspices of the CCAB-I, responded to the public consultation on the Research and Development tax credit and on options to support innovation. In our response, we outlined the need to enhance the existing regime to ensure Ireland maintains its competitiveness in attracting new research and development (R&D) investment while also incentivising further activity by existing claimants. Our key recommendations focused on the removal of the existing restrictions on subcontracting R&D activities to third parties and the inclusion of qualifying indirect expenditure (such as rent) and costs relating to staff hired from agencies in the tax credit claim. We also made recommendations for an increase in rate and the acceleration of the repayment of excess tax credits.  In our response, we recommended an increase in the tax credit rate to 35 percent, with a special rate of 50 percent for green investment between 1 January 2026 and 31 December 2030. We also outlined the importance for smaller businesses of increasing the de minimis repayable credit from €75,000 to €200,000 and that the three-year period for larger repayments is reduced to no more than two years. In addition, we recommended the introduction of legislation providing that grants are taxable on a receipt’s basis to provide clarity on grant recognition in tax credit claims. We outlined that any policy on innovation must be designed to encourage investment in digitalisation, decarbonization and sustainability. To successfully achieve its objectives, especially in terms of digitalisation and the green transition, an innovation award system must have a broad scope with a lower technical qualification threshold.

In Irish news this week, Revenue has issued updated guidelines for charging interest on late payment of tax and it has also produced a series of information sessions on the Residential Zoned Land Tax ahead of the 23 May 2025 pay and file deadline. In UK news, we want to hear your views on HMRC’s plans to reform behavioural penalties and we highlight a new peer led initiative designed to help agents get ready for Making Tax Digital for income tax. In International news, the EU has agreed to simplify the VAT rules on distance sales and imports.  Ireland Revenue has updated the guidelines for charging interest on late payment through Revenue Debt Management Services.  Revenue has produced a series of information sessions on the Residential Zoned Land Tax ahead of the 23 May 2025 pay and file deadline.  UK  We want to hear your views on HMRC’s plans to reform behavioural penalties.  Read about a new peer led initiative designed to help agents get ready for Making Tax Digital for income tax.  International  The EU has agreed its position on the VAT rules directive to simplify tax collection for imports and certain distance sales.  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 post EU exit corner here. 

In this week’s post EU exit corner, we bring you the latest guidance updates and publications relevant in the post EU exit environment. The most recent Trader Support Service bulletin is also available as is the latest Brexit and Beyond newsletter from the Northern Ireland Assembly EU Affairs team. The UK-EU Trade and Cooperation Agreement Domestic Advisory Group (DAG), which the Institute is a member of, has published a statement ahead of the UK/EU summit which takes place in London today. Miscellaneous guidance updates and publications Apply to import duty-paid EU excise goods into Northern Ireland, as a tax representative, 4-digit procedure to additional procedure code correlation matrix for Final Supplementary Declarations, 4-digit to 3-digit procedure to additional procedure code correlation matrix for imports, 4-digit to 3-digit procedure to additional procedure code correlation matrix for inventory exports, 4-digit to 3-digit procedure to additional procedure code correlation matrix for inventory imports, Simplified Process for Internal Market Movements (SPIMM) or UK Carrier (UKC) Scheme: Customs Declaration Service Data Element Completion Guide, and 4-digit to 3-digit procedure to additional procedure code correlation matrix for exports.

Issue 131 of HMRC’s latest Agent Update is available. HMRC has also shared with us the below additional information in support of this. This is intended to provide useful additional background information/context. Address rejections Investigations are continuing on Self-Assessment (SA) registrations that are being rejected on the basis of the address. This is related to routine enhancements HMRC is continually introducing to ensure taxpayer information is kept secure. HMRC’s hints and tips article in Agent Update 128 details some of the ways in which agents themselves can help reduce the number of rejections, particularly by ensuring that the address from the Royal Mail Postcode Finder is used in the client’s Personal Tax Account and that this matches any subsequent SA repayment claims.   HMRC does not currently envisage being able to adopt a solution to this issue in the short term therefore we have been asked to remind agents to continue to report instances of rejection. Missing PAYE Codes HMRC continues to examine where PAYE codes do not appear on the PAYE Desktop Viewer. It has been established that where there has been no change to a PAYE code, then the previous year’s code is carried forward or uplifted following the start of the new tax year. In these circumstances the code is not visible on PAYE Desktop Viewer.  The PAYE Desktop Viewer will, however, display codes sent to employers.   Auto coding queries It has been confirmed that a taxpayer may still have PAYE expenses coded in their tax code despite ceasing SA because those expenses are still possibly relievable. Ceasing SA will not remove expenses already coded. It is therefore the taxpayer’s responsibility to check their current tax code and notify HMRC if those expenses are no longer relevant. When a taxpayer ceases SA, the link between PAYE and SA is broken and therefore any data relating to employment expenses from the return is sent to be updated. Please note that if a taxpayer or agent has updated HMRC in the current tax year to advise of a change to a tax code, the expenses on the latest return submitted will not alter that code. This is because the tax return is current year minus 1 hence the in-year update from the taxpayer/agent will be the most up to date information. If a taxpayer believes that the tax code is incorrect they should follow HMRC guidance on this. SA returns filed after 30 December: tax code adjustments HMRC processes a vast amount of data each year. To do this, it carries out planning activities and decides the timeline of those processes which depend on resource availability, requirements, and priorities. On some occasions HMRC may need to turn off processing of specific information if it believes it will impact on the delivery of other functions. HMRC processes PAYE codes before the end of the filing deadline for SA as processing in January allows taxpayers to review and advise of any changes needed before the new tax year starts. You can read more about this process on GOV.UK. SA returns which require clerical overview because of an error may miss the deadline for the PAYE code review hence these tax codes will therefore include the latest available information.

In this week’s miscellaneous updates, we bring you the following: HMRC has clarified its position on the claim notification process for certain claims for R&D tax relief and a new tool has been launched which aims to help businesses and individuals understand HMRC compliance checks. A new Brief on the use of VAT grouping within the care industry was recently published and the Scottish Government has published the tax advisory group minutes for November 2024. HMRC has published guidance on how the changes to company size thresholds from 6 April 2025 affect the application of the off-payroll working rules and the latest schedule of HMRC Talking Points live and recorded webinars for tax agents are available for booking. Spaces are limited, so take a look now and save your place. And finally, check HMRC’s online services availability page for details of planned downtime and the online services affected. R&D tax relief claim notification process HMRC has recently advised us that their published guidance on claim notifications available from 8 September to 17 October 2024 was not correct and could have misled taxpayers (and their advisers) into believing that a claim notification was not needed where a claim for a previous period which began before 1 April 2023 was made via an amended corporation tax return submitted after that date. Recognising this, HMRC recently confirmed that they will accept R&D tax relief claims for periods for which a claim notification was due but has not been received if both of the following two conditions are met: The company made a valid claim in an amendment to a corporation tax return for an accounting period beginning before 1 April 2023, which was submitted to HMRC between 1 April 2023 and 30 November 2024 inclusive, and The accounting period for which a claim notification form was not delivered, but ought to have been, had a claim notification period ending between 8 September 2024 and 30 November 2024. Revenue and Customs Brief 2 (2025) Revenue and Customs Brief 2 (2025): the use of VAT grouping within the care industry has been published. This Brief provides information about the treatment of state-regulated care providers that form a VAT group with non-state-regulated providers of welfare services. It explains: how HMRC treat state-regulated care providers who form a VAT group with a non-state-regulated care provider, actions HMRC will take with new VAT group applications, and actions HMRC will take with existing VAT groups. These VAT group structures involve both: a provider which is not state-regulated, meaning they are not registered with the Care Quality Commission in England or the equivalent bodies in Northern Ireland, Scotland and Wales, and a provider that is state-regulated. HMRC has identified a growing use of VAT grouping structures by state-regulated care providers to recover VAT on costs that relate to supplies of welfare services that would otherwise be exempt from VAT. These structures incorporate an unregulated entity into the supply chain between the state-regulated provider and the local authority or NHS ICB to which the supply is made. Identical supplies made to private individuals remain exempt from VAT. HMRC consider these VAT grouping structures to be a form of tax avoidance. The Briefing therefore sets out the action that HMRC has begun taking as a result.   HMRC processes PAYE codes before the end of the filing deadline for SA as processing in January allows taxpayers to review and advise of any changes needed before the new tax year starts. You can read more about this process on GOV.UK. SA returns which require clerical overview because of an error may miss the deadline for the PAYE code review hence these tax codes will therefore include the latest available information.

HMRC is seeking industry experts in tech development, Artificial Intelligence, life sciences and advanced manufacturing sectors to join its Research and Development (R&D) Expert Advisory Panel.  Apply to join the panel here. The panel’s work will involve: providing insights into innovative R&D methods and projects,  assisting HMRC in improving guidance to ensure it is clear, targeted and offers the support required for specific high growth technical sectors,  providing sectoral feedback by acting as a forum for discussing sector-specific issues related to the administration of R&D tax reliefs, and   supporting HMRC’s communications and messaging on R&D tax relief.  Applications close on 8 June 2025. Email HMRC if you require any further assistance.

The deadline for employers to provide employees with their P60 for 2024/25, either on paper or electronically, is Saturday 31 May 2025. The P60 summarises the employee’s total pay and deductions for the year. By that date, employers must give a P60 to all employees on payroll who were working for them on the last day of the tax year (5 April 2025). If an employer is exempt from filing payroll online, copies of P60s can be ordered from HMRC. 

The Institute has been working with HMRC and the other Professional Bodies to drive readiness for the first tranche of mandation for Making Tax Digital (MTD) for income tax from April 2026. We are also aware of members concerns about this project and will continue to represent your views to HMRC. An Institute strategy is also being implemented to aid preparations which involves a range of resources, webinars and events including a HMRC led event in September which we will share more details of when available. As part of our joint Professional Body collaboration we are pleased to share details of a new initiative by the Association of Tax Technicians (ATT) who have confirmed that you don’t need to be an ATT member to participate. The first event takes place this week on Wednesday 21 May. More details of this new initiative are highlighted below. Join an MTD peer-discussion group. Sign up here. To help you prepare, this is a series of monthly online drop in sessions where you can speak to your peers about tips and practical advice on getting ready. Facilitated by the ATT’s technical team, these sessions aim to serve as an open forum for attendees to share and discuss their practical concerns around MTD and support each other. Topics driven by you could include (but are not limited to): The challenges of getting clients ready, Resourcing and workflow issues, The choice of software, and Pricing MTD services. These one hour sessions are taking place from 12–1pm on the following dates: Wed 21 May, Tue 17 June, Wed 23 July, Wed 20 August, Wed 17 September, and Tue 28 October.

HMRC is consulting on potential reforms to its behavioural penalty regime. The consultation is open until 18 June 2025 and seeks views on options to ‘simplify and strengthen’ the behavioural penalty regime for inaccuracies and failures to notify. The Institute will be responding to the consultation and is seeking your views on the proposals. HMRC has been holding workshops on the proposed changes and have provided a useful document summarising the proposals an overview of which is provided below. Contact us by email by Friday 6 June to share your feedback. For failure to notify penalties, HMRC is proposing to remove the timing of disclosure as a factor in determining the relevant penalty ranges and is also proposing to remove the narrower penalty ranges. There are also proposals to combine consideration of the type and quality of disclosure into one step, so that there is one set of headline rates. ‘Telling’ and ‘helping’ would be combined into one category to reduce overlap. For deliberate and repeated non-compliance, the potential changes are: increased penalty rates for all deliberate behaviour (e.g. same level as category 2 offshore penalties), a new higher tier of penalty rates for repeated deliberate non-compliance (e.g. at the same level as Category 3 offshore penalties) and the potential for higher rates to be 'reset' for new occurrences in the future, the merger of ‘deliberate but not concealed’ and ‘deliberate and concealed’ into a single ‘deliberate’ category, and to codify ‘deliberate’ in penalty legislation, e.g. regarding intent, blind-eye knowledge, and, potentially, recklessness. There are also proposals for offshore penalties and penalty suspension. Alternative approaches are also considered as are a range of potential new non-financial penalties, many of which are very concerning.