Later this week, Regina Doherty, MEP, will lead a delegation of the tax matters subcommittee to meet with representatives of key Finnish and Estonian institutions to discuss topical international tax issues and challenges. The topics to be discussed will include the implementation of the OECD's Two-Pillar solution, the simplification of the tax system and improving competitiveness, tax incentives, the situation of cross-border workers, energy taxation, and the implementation of EU Directives.

The latest UK tax tidbits features updated guidance across a range of areas and updated guidance on how to spot genuine HMRC contact and identify phishing attempts. Appeals reviews and tribunals guidance, Simplifying the onboarding process for new starters: communication resources, Cryptoassets Manual, Apply for an agent services account if you're not based in the UK, Property Income Manual, Create an agent services account, Check if you need to carry out digital platform reporting, Check genuine HMRC contact that uses more than one communication method, Check if a phone call you've received from HMRC is genuine, Check if an email you've received from HMRC is genuine, Check if a text message you've received from HMRC is genuine, Check for signs of labour fraud in construction, What to do when an employee dies, Receive Income Tax or PAYE repayments on behalf of others, Collecting the right tax from wealthy individuals, Set up a private limited company, Claim tax relief on your private pension payments Employment Status Manual, and Named tax avoidance schemes, promoters, enablers and suppliers.

In Irish news, the OECD has published the Economic Survey of Ireland 2025, and we issue a reminder that the deadline for submitting the 2024 Special Assignee Relief Programme employer return is 23 February 2025. In UK news, the UK Government has launched a consultation on e-invoicing and HMRC’s Making Tax Digital user research programme is seeking volunteers. In International news, the OECD is to publish a consolidated report on Amount B as part of the Two-Pillar solution on BEPS. Ireland 1. Read about the OECD’s recently published Economic Survey of Ireland 2025 and the key messages from the report. 2. We remind readers that the Special Assignee Relief Programme (SARP) employer return for 2024 is due for submission by 23 February 2025. UK 3. The UK Government has launched a consultation on e-invoicing which will run for twelve weeks. 4. HMRC’s Making Tax Digital programme is looking for volunteers to assist with user research. International 5. Read about the consolidated report to be published by the OECD on Amount B. 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.

Revenue has recently updated three other Tax and Duty Manuals on the annual average exchange rates, licences for employees in private security, and charges on income for corporation tax. Details on these updates are set out below. The manual Annual Average Exchange rates includes the average market mid-closing rate relative to the euro, for the calendar year 2024. The manual Mandatory Licences for Employees in Private Security provides details to relevant taxpayers on claiming tax relief for the cost of a mandatory licence required for the performance of the taxpayers employment duties. The manual on Charges on Income for Corporation Tax purposes has been updated to include a new section dealing with the dissolution of companies.

Revenue has updated the Tax and Duty Manual Guidelines on PAYE Assessments to reflect Finance Act 2024. The manual has been updated to reflect the amendment introduced to the four-year time limit for making or amending PAYE assessments by a Revenue officer.  From 1 January 2025, the four-year limit commences at the end of the year following the year of assessment in which the employer return for that income tax month is made.

Revenue has updated the Tax and Duty Manual Small Benefit Exemption (SBE) to reflect Finance Act 2024. From 1 January 2025, the SBE has been updated to allow employers to give up to five qualifying incentives in a tax year to employees without incurring a charge to tax. To avail of the SBE, the cumulative annual value of the incentives cannot exceed €1,500. The manual includes details of the applicable limits in prior years on the total value and number of incentives which qualified for the exemption. Additional examples have also been included in the manual.

Revenue has issued a press release confirming that text messages claiming to come from them and which seek personal information from taxpayers are a scam. Revenue confirmed that they never request personal email through text, email or pop-up windows. Revenue advises that any emails or text messages which appear to be from Revenue and are suspected to be fraudulent or a scam should be deleted. Taxpayers should contact their local Revenue office to verify the status of any expected tax refunds. Individuals who have responded to these fraudulent emails or text messages and provided personal information are advised to contact their bank or credit card company immediately.

The annual Special Assignee Relief Programme (SARP) employer return for 2024 must be submitted to Revenue on or before 23 February 2025. The return should include details of all employees who availed of SARP relief for the period 1 January 2024 to 31 December 2024. Details on the filing of the return through Revenue’s online eSARP portal are available on Revenue’s SARP webpage.

The OECD Economic Survey of Ireland 2025 was launched last week at an event hosted by the Institute of International and European Affairs. The report notes that the domestic economy in Ireland remains robust primarily due to strong labour market performance. However, it notes that caution needs to be exercised when addressing spending pressures arising from an ageing population, infrastructure deficits, climate change and housing shortages. The key messages from the survey are as follows: Fiscal restraint is called for in the near term. At the same time, enhancing the fiscal framework, increasing spending efficiency and improving the medium-term resilience of tax revenues will be key to ensuring long-run fiscal sustainability. Preserving Ireland’s cost competitiveness requires a reduction in labour and skills shortages, lower legal costs and easing of the administrative burdens on businesses. Speedier implementation of plans and pricing emissions more uniformly across sectors is central to achieving Ireland’s ambitious climate targets. Policies to increase housing density, improve land use and development, raise productivity and lower costs in the construction sector are needed in order to boost housing supply. Commenting on the survey findings, Minister for Finance, Pascal Donohoe  said: “Our economy is in good shape and this gives us the resources and the bandwidth to address many issues. But continued economic success is not a given. The world is changing; the global economy is changing; our own economy is changing. It is incumbent upon us all – but especially those in the public sector – to prepare for these changes.”

Last September at the Labour Party Conference the Chancellor of the Exchequer announced that a consultation would be launched on electronic invoicing (e-invoicing). This consultation has now been launched and will run for 12 weeks until 7 May 2025. The Institute will be responding to this and will be engaging with members on this important issue. In the meantime, members can also email tax@charteredaccountants.ie with their views. The launch of this consultation was accompanied by a Press Release. The consultation process is accepting written responses by email or alternatively an online form can be completed. Anyone wishing to join the round table events on this consultation should email einvoicingengagement@hmrc.gov.uk. Chartered Accountants Ireland has already highlighted the significance of this change to HMRC. Ireland has been consulting on the modernisation of its VAT regime including e-invoicing which the Institute responded to in January this year highlighting the challenges that SME businesses in particular will face. In a broader context, should this proposal proceed in the UK, the timetable for its introduction will need to be very carefully considered as many SMEs are facing significant change in other areas of the UK tax system in the future; the payrolling of benefits in kind from April 2026 and the mandation of Making Tax Digital for income tax from the same date to name but two.

HMRC’s MTD user research programme are looking for some help and the MTD software choices page has also been updated to add an additional software provider for 2024/25 bringing the total currently available to 16. HMRC is seeking the following types of volunteers to assist with MTD user research: Those who report partnership income, and Those who report foreign income (overseas pensions, dividend income, social security benefits and royalties etc). Volunteers will be interviewed to understand key behaviours, needs and difficulties. They will also be involved in conducting usability testing on a prototype for redesigned journeys within Self-Assessment. If you would like more information on taking part, please email tax@charteredaccountants.ie in the first instance and we will put you in touch with HMRC’s MTD team.

In this week’s miscellaneous updates, the February 2025 Employer Bulletin has been published and HMRC has now published its revised interest rates for late and early payments. In a tongue in cheek Press Release ahead of Valentine’s Day, HMRC is encouraging anyone in love with their side hustle to check if you need to tell HMRC about your income from online platforms. The Public Accounts Committee has published a report on HMRC services and the National Audit Office reports on the cost of the tax system. The Charter for Budget Responsibility has been approved by Parliament and finally, the Institute of Fiscal Studies has published an article looking at how changes in UK Government revenues compare with other advanced economies. February 2025 Employer Bulletin The latest Employer Bulletin is highlighting a range of issues relevant to employers including the following which HMRC has asked us to specifically highlight: “Statutory Neonatal Care Leave and Pay The government intends to introduce a new statutory entitlement to Neonatal Care Leave and Pay from 6 April 2025. This will provide employed parents whose babies are admitted to neonatal care with a day-one employment right to take up to 12 weeks off work, depending on the length of time their baby is in neonatal care. Eligible parents will also be entitled to up to 12 weeks of statutory pay.   The Department for Business and Trade laid the regulations to implement this right in January 2025. Subject to Parliamentary agreement, the new entitlement will apply to babies born on or after 6 April 2025.   A summary of the entitlement is provided in the following sections. Full guidance will be available soon.   Eligibility This will be available to a broad range of ‘parents’, including adoptive parents, parents who are fostering to adopt and the intended parents in surrogacy arrangements.   Employed parents whose babies are admitted into neonatal care up to the age of 28 days, and who have a continuous stay of seven full days or more, will be entitled to leave as a new day-one employment right. Eligible parents will be able to take a minimum of one week, and a maximum of 12 weeks, depending on how long their baby is in neonatal care. This is on top of their other parental entitlements such as maternity, paternity and shared parental leave.   For eligible parents to also qualify for Statutory Neonatal Care Pay, they must also meet continuity of service and minimum earnings tests. This means the eligible employee must have worked for their employer for at least 26 weeks ending with the relevant week and earn on average at least £125 per week before tax from April 2025.   Notice and information requirements Leave and pay can be taken in 2 Tiers, Tier 1 and Tier 2. The notice and evidence requirements for each Tier are: Tier 1 - is a period when the child is still receiving neonatal care, and including one week after the care has ended.  Tier 2 - is the period outside the Tier 1 period and before the end of 68 weeks from the date of the child’s birth.  Neonatal Care Leave notice periods An employee will need to give notice to take Neonatal Care Leave (NCL). The length and format of notice for leave will vary depending on whether the employee intends to take leave in Tier 1 or Tier 2.   For leave taken in Tier 1, the employee will need to notify their employer before they would be due to start work on the first day of absence, or as soon as possible thereafter. The notice does not need to be in written form.      For leave taken in Tier 2, the employee will need to provide notice at least 15 days before the start of a period of one week leave. For a period of 2 or more weeks of leave, the employee will need to provide notice at least 28 days before the start of the leave. The notice must be in written form.   Neonatal Care Pay notice periods An employee must provide written notice for Tier 1 Neonatal Care Pay (NCP) within 28 days beginning with the first day of the week in which NCP is being claimed.   For Tier 2 NCP, an employee must give a notice at least 15 days in advance in order to claim pay for one week’s leave. Notice must be given at least 28 days in advance to claim pay for 2 or more weeks of leave.   Neonatal Care Leave and Neonatal Care Pay information requirements At the same time, to receive leave and or pay for leave taken in either Tier 1 or Tier 2, an employee must provide the following information to the employer:  the employee’s name the date of the child’s birth if applicable, the date of the child’s placement with the adopter or prospective adopter if applicable, the date of the child’s entry into Great Britain to live with the overseas adopter the date the child started to receive neonatal care, or each date if the child received neonatal care on 2 or more separate occasions if the child is no longer receiving neonatal care, the date that the care ended if it is the first time a notice is being given, a declaration that the employee meets the parental relationship criteria that they, the employee, has cared for or intend to care for the child during the week or weeks to which the notice relates The Neonatal Care (Leave and Pay) Act 2023 applies only to Great Britain. At the current time, no legislation to introduce Neonatal Care Leave and Pay has been introduced in Northern Ireland, therefore, the measure will not apply in Northern Ireland.   Further information is available at: Pay Regulations: https://www.legislation.gov.uk/ukdsi/2025/9780348268041/contents Leave Regulations: https://www.legislation.gov.uk/ukdsi/2025/9780348268034/contents GOV.UK Press release: https://www.gov.uk/government/news/parents-to-receive-day-one-right-to-neonatal-care-leave-and-pay.” Public Accounts Committee report on HMRC services Last month the House of Commons Public Accounts Committee published its report ‘HMRC Customer Service and Accounts 2023-24’. The reports outlines HMRC’s performance in delivering customer service and draws six conclusions from its findings whilst also making six accompanying recommendations for improvement. A response is expected from the Government within two months.   National Audit Office report on the cost of the tax system The National Audit Office has published its report ‘The administrative cost of the tax system’. The report concludes, not surprisingly, that the cost to HMRC of running the tax system is increasing. In part this is due to rising complexity in the different tax regimes and taxpayer numbers, but it is also due to the additional cost of introducing and remediating digital systems and moving to a more highly-skilled workforce. HMRC does not measure the overall efficiency of its administration of the tax system, but there is evidence from different parts of the system that there is scope for increased efficiency and productivity. Although enhanced digitalisation has increased revenue, it does not seem to be reducing running costs. Customer service performance has also declined and efficiency targets have proved difficult to achieve without compromising services. Charter for Budget Responsibility Last month the House of Commons voted to approve the Charter for Budget Responsibility, the Government’s new fiscal and debt management policy. The accompanying press release sets outs that “through the Charter, fiscal and economic stability will be enhanced by confirming the Government’s intention to move to one major fiscal event per year” This seems to confirm that there will only be one major fiscal event every year in the autumn therefore major tax changes are unlikely to be announced at the Spring Statement on Wednesday 26 March 2025. Institute for Fiscal Studies article on Government revenues The Institute for Fiscal Studies recently published an article entitled ‘The UK’s near-record Government revenues are not uncommon internationally’. This considers how changes in UK Government revenues compare with that of other advanced economies, including the G7 and EU27. The article notes that although these are at record high levels, the UK has only recently begun to catch up with its peers in terms of average revenue as a percentage of Gross Domestic Product.