Issues experienced by taxpayers and agents in respect of the 30 day residential property disposal service have been under discussion with HMRC. HMRC has now published further details of the temporary solution to allow taxpayers to offset a UK property disposal return CGT overpayment against another Self-Assessment tax. HMRC is also continuing to work on updating all the guidance on this service and is exploring a longer-term resolution to the offsetting issue. The two documents now published are as follows:- HMRC Offset of UK Property Capital Gains Tax; and HMRC UK Property Disposal Question and Answer.

In a letter to the Chancellor of the Exchequer Rishi Sunak, Institute President Paul Henry has set out the necessity for HMRC to extend the 2019/20 self-assessment deadline given the recently announced further restrictions in all regions of the UK due to rampant change in the nature of the Coronavirus pandemic. Chartered Accountants Ireland has called on the UK Government to introduce a short once-off and one month extension to the 31 January 2021 filing deadline to ensure businesses and their accountants are given sufficient time to prepare and file returns in adherence with public health requirements. Although Chartered Accountants will make every effort to ensure that as many tax returns as possible are filed on time, due to the extraordinary circumstances of the pandemic, there will be instances where it is just not humanly possible to make the deadline. A short extension to the filing deadline is essential for our members in business and practice who are doing all possible to meet their tax obligations in the most difficult of circumstances. Since the Institute published its position paper the Next Financial Year last summer, the Institute has been lobbying HMRC for automatic suspension of late filing penalties for a period of three months in addition to enhanced Time to Pay (“TTP”) for 2019/20 self-assessment tax debt. We have discussed this with HMRC at various forum meetings including meetings of the Representative Body Steering Group (the highest level forum meeting of stakeholders), the Virtual Communications Group monthly meetings and at bespoke meetings over the course of 2020. Although our recommendation for enhanced TTP was endorsed  by the Chancellor in the September Winter Economy Plan, HMRC has to date resisted any change to the forthcoming filing deadline. HMRC’s most recent communication indicated that its position in respect of the forthcoming self-assessment deadline is unchanged. The full message from HMRC is as follows:- “I am grateful for the evidence you have provided and the constructive engagement you have had with my policy teams. We have carefully considered your request. Many of you were on the Representative Bodies Steering Group call on 16 December, when Angela MacDonald discussed with you that we do not currently plan to waive late filing penalties. Let me explain our reasons. Our SA message this year is a simple one: We want to encourage as many customers as possible to complete their returns by 31 January 2021, even if they can’t pay in full, because filing their return is key to crystallising their SA liability and being able to get our support, if they need it, to pay their tax. But no-one will have to pay a penalty if they cannot file on time because of the impact of the COVID-19 pandemic. We do not want to complicate this message by sending a blanket signal that it’s OK to file late. That could have some serious disadvantages for our customers; de-coupling the payment and filing dates might confuse customers, and even lead to non-payment, interest accruing, and late payment penalties being triggered. It would also encourage some customers to file late who really don’t need to. We know that some customers will not be able to file on time because of the impact of the pandemic on them or their tax agent. These customers should get their returns in as soon as they can. We will not penalise people who need more time. We will accept pandemic-related personal or business disruption as a reasonable excuse. If their return is late due to pandemic-related delay on the part of an agent, this will also be a valid reasonable excuse. In the event that someone who has been unable to file on time receives a penalty notice, they or their agent will be able to get this cancelled easily by contacting HMRC. We are giving customers and agents more time by extending the penalty appeal period to 3 months. I know you will be disappointed that our decision is not what you and many of your members wanted. I understand and sympathise with the extreme pressures your members have been under in this exceptional year: they have helped deliver the economic response to the pandemic, helping UK businesses get the support they need while at the same time suffering the effects of the pandemic on their own firms. I am very grateful to them for their valuable and vital work. At present, filing rates are holding up well, but we will continue to monitor the situation during January and keep matters under review.” Our members survey last month indicated a preference for automatic suspension of late filing penalties.   However, the announcement of enhanced restrictions earlier this week due to the rampant change in the nature of the Coronavirus mean that businesses and their accountants face extreme difficulties, and the Government must extend the 31 January 2021 deadline and lift late filing penalties to ensure tax obligations can be fulfilled safely. Members will be kept abreast of developments on this issue in eNews and Chartered Accountants Tax News.

Revenue announced the extension of the 2019 Pay and File deadline until 6pm today, 11 December 2020. Chartered Accountants Ireland made representations to Revenue on technical difficulties members were experiencing with ROS throughout the week, particularly on Monday.  Revenue acknowledges the efforts of taxpayers and agents in working towards the deadline on its announcement of the extension. Revenue confirmed the extension yesterday afternoon in a press release. The total number of 2019 income tax returns filed as of yesterday afternoon was in excess of 500,000.

Irish stories this week cover the Revenue Chairman’s appearance before the Public Accounts Committee. The Chairman responded to questions relating to bogus self-employment claims, the tone of Revenue engagement and difficulties facing the self-employed and SME sector in meeting their tax obligations due to COVID-19. In UK developments, HMRC has set out its policy on the tax treatment of virtual Christmas parties, and read HMRC’s updates including COVID-19 compliance checks. While in international tax, the OECD published a report on the activities and achievements in the OECD’s international tax agenda for the G20 leaders.       Ireland Revenue chairman, Niall Cody, appeared before the Public Accounts Committee last week, responding to questions on bogus self-employment claims, the tone of Revenue engagement and the difficulties facing the self-employed and SME sector in meeting their tax obligations due to COVID-19; The CCAB-I made further representations to the Minister for Finance highlighting concerns on the impact of the transfer pricing provisions contained in Finance Bill 2020, which were not abated in Committee Stage Amendments; UK Read about HMRC’s policy on the tax treatment of Christmas parties and what to do if you pay employees early in December; Key messages from recent HMRC meetings are available including important updates on compliance work in respect of COVID-19 supports; and   International The OECD published a report outlining the activities and achievements in the OECD’s international tax agenda for the G20 leaders.

Revenue confirmed the Covid Restrictions Support Scheme (CRSS) e-Registration facility in ROS opened at the start of this week. Eligible businesses, or tax agents acting on their behalf, are encouraged to register for the scheme now. Revenue confirmed that the CRSS is a separate tax head for registration purposes so agents will need to organise an agent link form. Up to date tax clearance is also required for registration.  Updated guidance on the CRSS also issued on Tuesday.  To register for CRSS, in addition to having tax clearance, an eligible business must:make a declaration that it meets the eligibility criteria for the scheme, and provide the information listed in paragraph 3.1 of the CRSS guidelines.Turnover details provided as part of the registration process must be consistent with the information included in the relevant tax returns of the business. This will be validated against the information already held on Revenue systems. The updated guidance confirms that a partnership can be registered for CRSS by the precedent partner, on behalf of the partnership. The precedent partner will need to register for the CRSS under the tax reference number of the partnership trade. Registration is the first step for a business in accessing the scheme. The next step is making a claim; the claims portal will be available in mid-November.The Revenue press release provides further details on the CRSS registration facility. 

Irish stories this week cover the publication of TWSS employers on the Revenue website and the reduced VAT rate for the tourism and hospitality sector, as provided for in Budget 2021, is now in effect. In UK developments, the UK Government extended the furlough scheme to March and increased the Self-Employed Income Support Scheme. While in international tax, the European Commission has extended the relief from customs duties and VAT on the importation of personal protective equipment and medical equipment from outside the EU and is proposing further VAT reliefs for hospitals and medical practitioners. IrelandRevenue published the names and addresses of employers who availed of the TWSS last week;The VAT rate for the tourism and hospitality sector reduced from 13.5 percent to 9 percent on 1 November;UK The UK Government has just announced that workers across the United Kingdom will benefit from increased support with a five-month extension of the furlough scheme into Spring 2021. The Coronavirus Job Retention Scheme (CJRS) will now run until the end of March with employees receiving 80 percent of their current salary for hours not worked.  Similarly, support for workers through the Self-Employment Income Support Scheme (SEISS) will be increased, with the third grant covering November to January calculated at 80 percent of average trading profits, up to a maximum of £7,500.  For further details see here. InternationalThe European Commission announced an extension to the relief from customs duties and VAT on the importation of PPE and medical equipment from Third Countries. A new proposal for relief from VAT on vaccines and testing kits for COVID-19 for hospitals and medical practitioners is also included.   

Our top Irish stories this week include a review of the provisions contained in Finance Bill 2020 for the COVID Restrictions Support Scheme and the warehousing of income tax debt. In the UK, the UK Government announced that the Job Support Scheme will open on 1 November and run for six months, until 30 April.  While in international tax, the European Commission is seeking feedback on a new initiative to review the VAT rules for financial and insurance services. IrelandFinance Bill 2020 sets out the provisions for the  COVID Restrictions Support Scheme; The provisions relating to the warehousing of income tax debt are also considered;UK The UK Government announced that the Job Support Scheme opens on 1 November; HMRC launched a campaign to contact taxpayers who have ceased to trade and claimed the SEISS grant; andInternationalThe European Commission is seeking feedback on a new initiative to review the VAT rules for financial and insurance services.

Revenue confirmed that the Debt Warehousing Scheme remains available to businesses experiencing cashflow or trading difficulties as a result of COVID-19 restrictions, including those more recently announced. The Information Booklet on the Tax Debt Warehousing Scheme has also been updated providing details for businesses that are closed again due to the re-imposition of restrictions. In a press release, Revenue confirmed the availability of the scheme for those most recently affected by public health restrictions. It is noted that the terms of the scheme remain unchanged in the sense that access is automatic for SMEs and all relevant tax returns for the restricted trading period must be filed. The new paragraph 4.10 of the Information Booklet provides: “In these circumstances the trade is deemed to be still subject to the restrictions provided for in the regulations under sections 5 and 31A Health Act 1947 until it has re-opened again. This means that VAT and PAYE (Employer) debts for such businesses can continue to be warehoused in respect of the extended restricted period(s)”. Additional examples have also been included in the booklet.

Revenue extended the deadline from 30 September to 31 October for taxpayers wishing to enter into a phased payment arrangement (PPA) to avail of the reduced interest rate (3 percent) on outstanding ‘non-COVID-19’ tax debts. Chartered Accountants Ireland requested an extension to the deadline in a letter to the Revenue chairman, Niall Cody. As confirmed in a Revenue eBrief, the extended deadline allows for taxpayers and their accountants to finalise a PPA covering non-COVID-19 tax debt in respect of liabilities due by 30 September 2020. Revenue confirmed the extension to the deadline in a press release on Wednesday evening, which noted the challenges that taxpayers and their agents are experiencing at this time. Over €46 million of tax debt is now covered by a PPA to which the reduced interest rate applies. Collector General, Joe Howley …” strongly encouraged the uptake of this opportunity and of the extended deadline that now applies”. Where a PPA is in place, a business will qualify for tax clearance, which may allow access to the EWSS and other schemes. Revenue confirmed to Chartered Accountants Ireland that a reduced interest rate PPA would be available for a 2019 income tax liability, where preliminary tax was underpaid in 2019. As the due date for the full liability reverts to the date the preliminary tax was due (i.e. 31 October 2019) the liability is due before 30 September 2020. Accrued interest at the full rate from 31 October 2019 to the date of the PPA applies in such a scenario. The Revenue information booklet provides detailed information on the reduced interest rate on non-COVID-19 tax debt. 

The TWSS reconciliation process and the requirement to report the subsidy paid amount to Revenue before 31 October 2020 features as our top Irish story this week. Revenue has also provided details on how payments received under the TWSS and PUP will be taxed.  In the UK, was the Chancellor’s Winter Economy Plan a trick or treat, and what’s new with HMRC? While in international tax, the OECD has published a report on BEPS Action 13 Country by Country Reporting.      IrelandTWSS reconciliation process – employers are required to report the actual subsidy paid to employees to Revenue before 31 October 2020; A Revenue press release sets out details on how payments received under the TWSS and PUP will be taxed;UK Was the Chancellor’s Winter Economy Plan a trick or treat? Read more on the tax measures announced last week; What’s new with HMRC? We set out some takeaways from a recent meeting; andInternationalProgress on transparency, the OECD has published a report on the BEPS Action 13 Country by Country Reporting. 

Accountants working in practice have provided an essential public service assisting businesses in accessing Government COVID-19 wage supports and grants. Firms have taken on this extra workload while also dealing with a workflow disruption of up to eight weeks due to the Government public health restrictions, and like other small and medium-size businesses all over the country, many firms have been working with a reduced complement of staff over the summer due to health and safety concerns and childcare constraints.  In addition, accountants tell us of delays in getting access to client premises to carry out essential audit work.  This has all culminated in firms facing a race against the clock this Autumn to get tax returns submitted by the deadlines.  Members in practice from all over the country have been in contact with us in recent weeks telling us of the huge work pressures they face and resourcing constraints in meeting the tax deadlines.  This is a challenge also facing members of our fellow CCAB-I accountancy bodies.   Chartered Accountants Ireland and the CCAB-I have made representations to the Government and to Revenue on the deadline crisis facing accountants.  In the CCAB-I Pre-Budget 2021 submission and Chartered Accountants Ireland publication The Next Financial Year, we have called for a suspension of surcharges over the corporation tax deadline for 23 September and the income tax deadline for 12 November.  These publications were distributed to all TDs and Senators and to the Government.   Chartered Accountants Ireland under the auspices of the CCAB-I has made representations to Revenue through the TALC forum and we set out the issues in advance for Revenue in a letter which was discussed at the Main TALC meeting yesterday. We understand that Revenue are considering the continued availability of the surcharge suspension for Corporation Tax returns.We will update you on this important matter via our website, Tax News and Chartered Accountants eNews.  Deferred launch of CRO customer portalWe represented members concerns with the Companies Registration Office (CRO) on its plans to launch a new CORE customer portal at this difficult time for accountants and companies.  The CRO has acted on our representations and announced the postponement of the implementation of the CORE portal until December 2020 after the key filing periods have passed. We will keep you updated on further developments.The CRO held several webinars on the Digital Transformation programme.  Please see a recording of the webinar and the subsequent Q&A for further information.  Thank you for your invaluable feedback and we will continue to lobby for the suspension of surcharges.  Norah CollenderProfessional Tax Leadernorah.collender@charteredaccountants.ie 

In our top Irish story this week, Revenue confirmed certain proprietary directors can claim the EWSS. Read the Tax and Duty Manual on the Stay and Spend tax credit and about the launch of the registration facility for businesses wishing to participate in the scheme, and why you should register for the EWSS now. In the UK, read the NI Tax Committee’s response to HMRC’s Revised Charter and see the latest Making Tax Digital update for agents.    IrelandRevenue confirmed certain proprietary directors can claim the EWSS from 1 September,The Stay and Spend credit registration facility for service providers opened last week, along with the publishing of a new manual on the scheme;Register now – Revenue are reminding employers and accountants that EWSS registration cannot be backdated,UK HMRC’s revised Charter should focus more on the important role of agents, according to the NI Tax Committee; andThe latest Making Tax Digital and Digital Services updates are available.