Tomorrow sees Chancellor of the Exchequer Rachel Reeves deliver the first Labour Party Budget in nearly fifteen years. The Institute’s Tax Team will be analysing the Budget’s tax announcements and a newsletter reporting on key areas will issue to members. Detailed analysis will follow in Chartered Accountants Tax News next Monday 4 November and in subsequent weeks. 

In Irish news today, the Institute, under the auspices of the CCAB-I attended the recent meeting of the Department of Finance Business Tax Stakeholder Forum and Revenue has amended the guidance on Relief for Investment in Corporate Trades to reflect revisions arising from the General Block Exemption Regulation and Finance (No.2) Act 2023. In UK news, ahead of next week’s Budget the Institute has written to the Exchequer Secretary to the Treasury on a range of tax policy and tax administration areas and this week’s miscellaneous updates features updated guidance on VAT on private school fees. In International news, the OECD has published a manual on Effective Mutual Agreement Procedures. Ireland The Institute, under the auspices of the CCAB-I, attended the recent meeting of the Department of Finance Business Tax Stakeholder Forum. Revenue has amended the guidance on Relief for Investment in Corporate Trades to reflect revisions arising from the General Block Exemption Regulation and Finance (No.2) Act 2023. UK Ahead of next week’s Budget the Institute has written to the Exchequer Secretary to the Treasury on a range of tax policy and tax administration areas. This week’s miscellaneous updates features updated guidance on VAT on private school fees. International The OECD has published a manual on Effective Mutual Agreement Procedures. 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.

The OECD has published an online Manual on Effective Mutual Agreement Procedures (MEMAP) as part of a broader project to improve the functioning of existing international tax dispute procedures and to develop supplementary dispute resolution mechanisms. MEMAP is intended as a guide to increase awareness of the Mutual Agreement Procedure (MAP) process and how it should function. It will provide tax administrations and taxpayers with basic information on the operation of MAP and identify best practices for MAP without imposing a set of binding rules upon member countries.

Revenue has updated the Tax and Duty Manual which provides guidance on the submission of iXBRL financial statements as part of corporation tax returns. The manual has been updated to confirm that companies liable to corporation tax whose affairs are managed in either the Large Corporates Division (LCD) or the High Wealth and Financial Services Division (HWFSD) are obliged to file their financial statements in iXBRL format (Paragraph 2.1).  Following the creation of the HWFSD, changes to the most recent Form CT1 where explicit references were made to the LCD have been removed (Paragraph 3).  Guidance on what should be included in the mandatory ‘DPLTurnoverRevenue’ and ‘DPLGrossProfitLoss’ tags following the introduction of a new section of the EU IFRS taxonomy for insurance/reinsurance and life assurance entities reporting under IFRS 17 (Insurance Contracts)( Paragraph 3.1.3) is included.  Further updates include:  updated examples to reflect more recent accounting standards and related taxonomies (Paragraph 1.6.1),  Small Company turnover and balance sheet thresholds under the Companies Act 2014 (Paragraph 3.1.1), and  New guidance on the inappropriate use of taxonomies (Paragraph 4.1.2).  For further information see eBrief No.255/24. 

Revenue has updated Tax and Duty Manual which provides guidance on the Relief for Investments in Corporate Trades (RICT). The manual has been updated to reflect the revision of Regulation (EU) No 651/2014, known as the State Aid General Block Exemption Regulation and the amendments made to Part 16 TCA by Finance (No.2) Act 2023 to the Employment Investment Incentive, Start-Up Relief for Entrepreneurs and Start-Up Capital Incentive schemes available under Part 16 TCA 1997.  The main updates include:  the insertion of a new section on investments from 1 January 2024 (section 2.6),  the insertion of a new section on Rate of Relief (section 4.4.1) and a new section on the calculation of the deduction from income for investments made from 1 January 2024 (section 4.4.2),  Section 7.1 in respect of eligible shares issued on or after 1 January 2024,  Section 8.2.1 in relation to the age of the RICT group,  Sections 9.2, 9.3 and 9.4 in relation to initial, follow-on, and expansion risk finance investment, and  Section 10 to reflect the limit on the amount that can be raised under Part 16 that applies from 1 January 2024. 

Revenue has updated the Tax and Duty Manual which provides guidance on the Revenue Online Service (ROS). The manual has been updated regarding security questions for the ‘Reset ROS Login’ process.  In addition, the reset option on the ROS home page has been moved and changed to ‘Trouble Logging In?’, while the ‘system password’ has been retitled ‘verification code’ in existing ROS registration screens as well as communications, e.g. SMS from the registration process.  The ROS Reset option in myAccount has also been updated to enable customers to receive a verification code without answering security questions.   Further information is available in eBrief No. 257/24. 

In a letter to the Exchequer Secretary to the Treasury, the Institute took the opportunity to highlight a range of tax policy and tax administration recommendations and concerns ahead of next week’s Budget and the 2025 Spending Review. From business taxes to the need to invest in HMRC, the Institute also advocates for a lower rate of corporation tax for Northern Ireland.  The full range of areas covered in the letter are as follows: Business taxation and the need for stability, certainty, and supports for investment, How tax policy can support the transition to net zero, The fuel duty dilemma, The Trader Support Service and the customs intermediaries’ market in Northern Ireland, Potential Budget Day announcements on capital taxes, Investment in HMRC, Making Tax Digital for income tax, Tax simplification and policy making, and A lower rate of corporation tax for Northern Ireland.  

On Friday, the Department of Finance held the fourth meeting of the Business Tax Stakeholder Forum at the Department of Finance on Merrion Road. The Institute was in attendance under the auspices of the CCAB-I. The meeting was chaired by Sinead Ryan, Assistant Secretary with responsibility for business and international tax policy.  Among the matters discussed were recent developments in domestic tax (including the recent publication of Finance Bill 2024) and international tax (including recent work in implementing Pillar Two and finalising work on Pillar One).   Of particular interest to readers will be the Department’s request for a list of priority areas within domestic legislation where legislation could be updated with the dual aims of enhancement and simplification. The Institute will be discussing the matter with our Tax Committee with a view to providing a list of issues ahead of the Christmas break. 

With speculation now reaching fever pitch about potential tax rises, the Labour Party’s first budget in nearly fifteen years is just 10 days away on Wednesday 30 October 2024. The Institute’s Tax Team will be analysing the budget as normal. On the day, we will be issuing a newsletter reporting on key tax announcements. Detailed analysis will follow in Chartered Accountants Tax News on Monday 4 November and subsequent weeks.  

In this week’s miscellaneous updates, we bring you news of updated guidance from HMRC on VAT on private school fees and HMRC has made a new direction impacting R&D tax relief claims. The latest schedule of HMRC live and recorded webinars for tax agents is also 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.  Updated guidance - VAT on private school fees  HMRC has published updated guidance for private schools on if, when and how they must register for VAT on private school fees. It is still expected that the change will commence from 1 January 2025. Further guidance is available on GOV.UK. According to the updated guidance this is based on the legislation and technical note published on 29 July 2024 but will be updated if any policy or legislative changes are announced on Budget Day on 30 October 2024.  The guidance explains:   Who must register for VAT.   The normal tests apply meaning that the educational provider must register for VAT if total taxable turnover exceeds £90,000 for the last 12 months or is expected to exceed £90,000 in the next 30 days.  Guidance is provided on how to apply the tests, and it will also be possible to register for VAT voluntarily.   When to register for VAT.   Education providers will be able to register from 30 October 2024. However, the precise date of when they will need to register is dependent on the value of school fee payments they receive and when they receive them. VAT should not be charged, nor VAT invoices produced until the education provider has registered.   How to register for VAT.  The education provider should follow the normal process for registering for VAT entering ‘private education provider’ in the ‘business activity’ section of the application and selecting the correct standard industry classification code.  How to determine if VAT is chargeable on goods, services and payments.   Guidance is provided on a wide range of circumstances, including where education services include other elements such as school meals and the treatment of grant payments, and  How to reclaim VAT on supplies.   Once registered for VAT, the educational provider may reclaim VAT incurred on the goods and services used to make its taxable supplies. Guidance is again provided on a number of areas, including partial exemption and how to recover VAT incurred pre-registration.   R&D direction and recent R&D Tribunal decisions  HMRC made a new direction on R&D earlier this month. This direction specifies how information and notifications required under both R&D schemes should be made and authenticated and updates the rules to align with recent changes to the reliefs. The direction is available at: HMRC Directions regarding claim notifications and additional information made 1 October 2024.  HMRC has also highlighted to us a range of First Tier Tribunal cases on R&D-related decisions:  Tribunal finding for the company: H&H Contract Scaffolding Ltd v HMRC TC/2023/08212 (a penalty case), and Get Onbord Ltd (in liquidation) v HMRC TC/2022/13281,  Tribunal finding for HMRC: Assembly Global Networks Ltd v HMRC TC/2023/08328, Flame Tree Publishing Ltd v HMRC TC/2022/13745, Tills Plus Ltd v HMRC TC/2022/11982 and Strictly Money Ltd v HMRC TC/2022/02573.

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 Department for Environment, Food and Rural affairs has also sent emails on exporting honey and apiculture products to the EU from 29 November 2024 and export health certificates for composite products.  Miscellaneous guidance updates and publications  Taking a vehicle out of the UK,  Additional Information (AI) Statement Codes for Data Element 2/2 of the Customs Declaration Service (CDS),  Search the register of customs agents and express operators,  Notices made under the Cash Controls (Amendment) (EU Exit) Regulations 2019,  CDS BIRDS Declarations and Customs Clearance Request completion instructions,  Reference Documents for The Customs Tariff (Preferential Trade Arrangements) (EU Exit) Regulations 2020,  Reference Documents for The Customs Tariff (Suspension of Import Duty Rates) (EU Exit) Regulations 2020, and  Reference Document for The Customs (Origin of Chargeable Goods) (EU Exit) Regulations 2020. 

In Irish news today, we have prepared our annual ‘At a Glance’ document outlining the various measures and changes contained in Finance Bill 2024 and Revenue has published updated guidance on the Help to Buy Scheme. In UK news, the 2023/24 paper self-assessment filing deadline is approaching at the end of this month and a new process for claiming relief for employment expenses began earlier this week. In International news, Member States have updated the EU list of non-cooperative tax jurisdictions.   Ireland  1. Read our “At a glance” document for a brief overview of Finance Bill 2024. 2. Revenue has updated guidance on the Help to Buy scheme to clarify that a renovation or refurbishment of an old residential property does not qualify for the scheme.  UK  3. Read about the changes to the process for claiming relief for employment expenses which took effect from Monday 14 October. 4. The 2023/24 paper self-assessment filing deadline is approaching.  International  5. Member States have updated the EU list of non-cooperative tax jurisdictions.  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.