The key measures announced on Friday ranged from changes to the capital allowances regime, to confirming that the corporation tax increase will not go ahead to tinkering with Stamp Duty Land Tax thresholds for residential properties, amongst others. The main changes are as follows:- The cancellation of the already legislated for increase to the main rate of Corporation Tax (“CT”) from 19 percent to 25 percent. The planned increase in the rate of Diverted Profits Tax from 25 percent to 31 percent from April 2023 was also cancelled; The Annual Investment Allowance (“AIA”) will be set at £1 million permanently. This was originally raised from £200,000 as a temporary measure which was due to end on 31 March 2023. The Institute recommended that the AIA, as a minimum, remain at £1 million until at least the end of this decade in its response to the HM Treasury consultation “Potential Reforms to UK’s Capital Allowances Regime”; The reduction in the basic rate of income tax from 20 percent to 19 percent will now take place one year earlier from 6 April 2023. Unexpectedly, the additional rates of income tax will be abolished from the same date. This will also be accompanied by changes to the dividend tax rates including reversing the 1.25 percent increase which took effect from 6 April 2022; There will be a four-year transition period for gift aid relief to maintain basic rate relief at 20 percent until April 2027; The Stamp Duty Land Tax (“SDLT”) 0 percent threshold doubled from £125,000 to £250,000. The level at which first-time buyers start paying SDLT increased from £300,000 to £425,000 and first-time buyers relief is now available on property purchases up to £625,000. These changes all took effect for purchases of residential property in England and Northern Ireland on or after 23 September 2022. HMRC has also published information on how these changes interact with the additional 3 percent SLDT surcharge for purchases of additional residential properties, the additional 2 percent surcharge for non-residents; and linked transactions; and The introduction of new investment zones where enhanced tax reliefs will be offered for SDLT, Enhanced Capital Allowances, Structures and Buildings Allowance and Employer National Insurance Contributions (“NICs”). The Government intends to work with the devolved administrations and local partners to make sure all regions benefit; if they are willing to do so. Further measures were also announced designed to encourage investment. These were as follows:- From 6 April 2023, an expansion of the Seed Enterprise Investment Scheme by doubling the annual investor limit from £100,000 to £200,000 and increasing the gross asset limit of the investee company to £350,000. This is also expected to be accompanied with changes aimed at “making it easier for investors to claim tax reliefs”; The Enterprise Investment Scheme and the Venture Capital Trusts Scheme will both be extended beyond 2025; From 6 April 2023, changes to the Company Share Option plan scheme by increasing the employee share option limit from £30,000 to £60,000 and removing a condition which limits the types of shares eligible for inclusion within the scheme; The introduction of a new VAT free shopping scheme for non-UK visitors via an online scheme “as soon as possible”. Northern Ireland is not expected to be included in this scheme; The repeal of reforms to the Off-Payroll Working rules (IR35) introduced in the public sector in 2017 and extended to medium and large-sized organisations in the private and voluntary sectors in 2021. From 6 April 2023, workers providing their services via an intermediary will be responsible for determining their employment status and paying the correct amount of tax and NICs; and A freeze on Alcohol Duty rates from 1 February 2023. Further details of the Government’s reforms to alcohol taxation are still to come and more information on Friday’s announcements is available.

The Government also announced plans to close the Office of Tax Simplification (“OTS”). According to the Chancellor’s speech, embedding tax simplification into the institutions of government and setting a mandate to HM Treasury and HMRC to focus on simplifying the tax code will replace the work of the OTS. The current projects of the OTS will continue until it is disbanded. The OTS expects to publish its report on the taxation of Property Income in October and it will continue to gather evidence on its Hybrid and distance working review. As the OTS is a statutory body, its closure will take effect from the date of Royal Assent to the Finance Bill.

Wednesday 5 October 2022 is the deadline to notify HMRC of a new source of income or gain for 2021/22 and to register for self-assessment if self-employed or a sole trader, not self-employed, or registering a partner or partnership.

In this week’s EU exit corner, we bring you the latest guidance updates and publications relevant to EU exit and news that importers can seek an extension to use CHIEF for a short period beyond 30 September where there is a business reason. We also update you on recent developments in relation to the Protocol on Ireland / Northern Ireland. Update on the Protocol  News reports say that a call is expected to take place this week between Maroš Šefčovič and the new UK Foreign Secretary James Cleverly which aims to start off an intensive period of talks in respect of the Protocol. As with previous talks, these are likely to be date driven with some reports suggesting Friday 28 October will be set as the target date as this is the deadline to stop further Assembly elections in Northern Ireland. By law, a further election must be called then if an Executive and Assembly have not been formed after the most recent elections in May. Short CHIEF extension Last week, HMRC launched a new online form that should be used to request permission to use the Customs Handling of Import and Export Freight (“CHIEF”) system for imports after 30 September. Readers will be aware that the new Customs Declarations Service (“CDS”) should be used instead of CHIEF for imports after Friday 30 September. In order to request a short extension, the online form must be completed and the EORI number of the business and any subsidiaries that an extension is requested for must be provided. The business must also have a clear business reason for the extension; for example, an extension may be granted to those currently using CHIEF if the  business cannot find or use a suitable customs agent before 1 October 2022. In addition, where an extension is granted, the business will also be provided with assistance to help them move to the CDS as soon as possible. If a business continues to  using CHIEF for imports from 1 October 2022 without permission for an extension, HMRC may revoke access. HMRC will also be contacting a small number of traders directly to grant continued access to CHIEF where the business has not fully migrated imports to the CDS. Miscellaneous updated guidance etc. The latest guidance updates, and publications relevant to EU exit are as follows:- Check simplified procedure value rates for fresh fruit and vegetables; Reference Documents for The Customs (Tariff Quotas) (EU Exit) Regulations 2020; Refunds and waivers on customs debt by HMRC; Correction for late payment interest on customs debt and £25 minimum charge; Country codes for the Customs Declaration Service; Medical devices: UK approved bodies; Search the register of customs agents and fast parcel operators; Check simplified procedure value rates for fresh fruit and vegetables; and Search the register of customs agents and fast parcel operators.

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. HMRC’s latest update on the Agent Forum is also available in addition to the August 2022 Digital Services update which features the latest on cyber security and the Trust Registration Service.

Revenue has updated its Tax and Duty Manual on Phased Payment Arrangements (PPA). The guidance now reflects the enhanced PPA system that allows for PPA consolidation. It also sets out temporary changes to PPA during Covid-19 which remain in place. Previously taxpayers were unable to add additional liabilities to their existing PPA. However, the ability to add extra periods to a PPA has become a necessity because of the need to incorporate warehoused debt into a PPA at the end of the Debt Warehouse Period 2. The enhanced PPA system allows for PPA consolidation, providing taxpayers greater flexibility in the management of their PPA. Taxpayers can apply for PPA consolidation on ROS. Further information regarding Debt Warehousing Scheme PPAs is available here.

Revenue would like to remind members about the filing obligations of charitable organisations and to highlight that those charities that do not hold tax exemption must file returns. Revenue has issued a note stating: “If a registered charity wishes to apply to Revenue for tax exemption, an application must be submitted, through Revenue’s online applications system, which can be done via ROS. Where Revenue grants tax exemption to a registered charity, it issues a CHY number to that charity; this indicates that the charity has tax exempt status. A registered charity that does not hold tax exemption is obliged to file all returns, as appropriate, to Revenue. There is no obligation on tax exempt charities to file tax returns to Revenue for the taxes to which the exemption applies. They must file returns for those taxes to which the exemption does not apply. Any enquiries in this regard can be sent via Revenue’s secure online MyEnquiries facility.” Details about applying for tax exemption are available here.

Mindful of the disruption that may arise for taxpayers and their agents as Ulster Bank and KBC leave the Irish banking market, Revenue has confirmed that, where members have previously set up RDIs for their clients with Ulster Bank or KBC bank accounts, a change of bank details on ROS will update the RDI. Any queries that may arise should be sent to ROS Payment Support via MyEnquiries, selecting ‘Other than the above’ and then by selecting ‘Revenue On-line Service (ROS) Payments’ from the ‘more specifically’ menu. Revenue will shortly be writing to all ROS customers advising on how to update bank details quickly and securely through its online channels to avoid disruption to payments or refunds during the upcoming Pay & File period. In addition, messaging on updated bank details will display on ROS and MyAccount screens from 10 October. Agents should maintain similar awareness with their clients who may be using an Ulster Bank or KBC account for payments and refunds.  If a customer misses their payment due to delay in the update of bank details, they should engage with Revenue in the first instance via the My Enquiries channels set out above, to outline their difficulty and Revenue will work with the taxpayer or their agent to address the matter on a case-by-case basis.     

A new OECD report, Tax Policy Reforms 2022, highlights the critical role of tax policy as countries promote economic recovery from the global pandemic and respond to energy price hikes. The report details recent tax reforms across 71 countries. The report notes that reductions in taxes on labour and more generous corporate tax incentives are among the key tax policy tools available to countries for stimulating growth. The report also acknowledges that governments acted swiftly to shield households and businesses from their mounting energy costs.

Last week, a delegation from the European Parliament’s Subcommittee on Tax Matters met with representatives from key government bodies including the Department of Finance, the Revenue Commissioners, and the Finance Committee and the Committee for Budgetary Oversight of the Oireachtas. The discussions focused on the tax climate in Ireland and important tax reforms. It was highlighted while meeting representatives of the multinational enterprises that these companies will not leave Ireland even if the government increased its tax rate.

In this week’s EU exit bulletin, we bring you the latest guidance updates and publications and remind you that CHIEF closes for import declarations from the end of this month. We also update you on recent developments in relation to the Northern Ireland Protocol Bill. Northern Ireland Protocol Bill update Thursday 15 September 2022 was the deadline for the UK to respond to the various infringement proceedings launched by the European Commission in respect of the Protocol on Ireland / Northern Ireland. The four infringement proceedings launched in August concern customs enforcement, and excise and VAT rules. These were in addition to the three infringement proceedings which began on 15 June 2022. We understand that the UK responded to the European Commission ahead of the deadline but no detail has been provided as yet as to the contents of the UK’s responses. The European Commission is considering next steps. Closure of CHIEF for import declarations The Customs Handling Import and Export Freight (“CHIEF”) system will close for import declarations from the end of September 2022. If your business or clients make import declarations, you must move to the Customs Declaration Service now, otherwise you won’t be able to import goods to the UK from 1 October 2022. Follow the two steps below to be ready for the change: Use the trader checklist (or declarant checklist if you make declarations yourselves without an agent) to move across to the Customs Declaration Service; and Watch HMRC’s YouTube videos which explain how to subscribe to the Customs Declaration Service, use the service, and carry out an import declaration. It can take several weeks to be fully set up, so businesses need to act now. Miscellaneous updated guidance etc. The latest guidance updates, and publications relevant to EU exit are as follows:- UK Domestic Advisory Group membership and Civil Society Forum participation under the UK-EU Trade and Cooperation Agreement: expressions of interest – Chartered Accountants Ireland is already a member of this group; Making a full import declaration; Making an import supplementary declaration; Making a simplified frontier declaration; List of ports using the Goods Vehicle Movement Service; Get UK customs clearance when importing goods into the UK: step by step; Apply to use simplified procedures for import or export (C&E48); Amend or cancel simplified import declarations; Advisory fuel rates; Attending an inland border facility; Declaring reusable packaging for Great Britain imports and exports; Finding commodity codes for imports into or exports out of the UK; Claim personal allowances and tax refunds if you're not resident in the UK; Check simplified procedure value rates for fresh fruit and vegetables; Amend or cancel a Customs Declaration Service import declaration; Report goods arriving at a UK port on a commercial vessel; Top-up your duty deferment account using the Customs Declaration Service; Paying into your Customs Declaration Service cash account; and Check if a business holds Authorised Economic Operator status.  

In Irish news, Revenue will be issuing Level 1 Compliance Intervention letters to all taxpayers eligible for the Debt Warehousing Scheme and the Report of the Commission on Taxation and Welfare has been published. In UK news, read about recent engagement with HMRC on Making Tax Digital and key points from the Institute’s response to the consultation on repayment agents focus on the root cause of repayment agents and makes recommendations to reduce their impact in future. Today’s mini fiscal event in the UK will feature in Monday’s Chartered Accountants Tax News - see below for how to sign up. In International news, Germany, France, Italy, Spain, and the Netherlands pledge to introduce a minimum 15 per cent effective corporate tax rate. Ireland 1.     Revenue will be issuing Level 1 Revenue Compliance Intervention letters to all taxpayers who were eligible for the Debt Warehousing Scheme. Read more about the upcoming communications here. 2.     The Report of the Commission on Taxation and Welfare has been published.   UK 3.     Read about recent engagement with HMRC on Making Tax Digital.   4.     Key points from the Institute’s response to the consultation on repayment agents focus on the root cause of repayment agents and makes recommendations to reduce their impact in future. International 5.     Germany, France, Italy, Spain, and the Netherlands pledge to implement a minimum 15 per cent effective corporate tax rate by 2023.     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.