The OECD has published its report on turning the Tax Administration 3.0 vision into organisational reality. The report focuses mainly on the issues relevant for the digital transformation of tax administrations and the actions they can take.

We take this opportunity to remind you of the forthcoming deadline for 2024/25 expenses and benefits returns/employment related securities which is this coming weekend on Sunday 6 July 2025. The 2024/25 online filing deadline to apply for a PAYE settlement agreement is Saturday 5 July 2025, with payments due by 22 October 2025 (19 October 2025 if not paying electronically). Here’s a reminder of the key deadlines next month:  6 July 2025: deadline for submitting all 2024/25 P11D(b) and P11D forms (if benefits not processed via payroll) and the employee must receive their copy of the P11D,  6 July 2025: deadline for online reporting of the 2024/25 annual return in respect of employment related securities, 19 July 2025: deadline for non-electronic payment of Class 1A National Insurance Contributions (NIC) for 2024/25, and  22 July 2025: deadline for electronic payment of Class 1A NIC for 2024/25.  HMRC are continuing to hold a series of webinars for employers and payroll providers on a range of related topics. The latest webinars available to register for will cover: Social functions and parties, Travel expenses, and Company cars and vans.

In March 2024 HMRC delivered the IT functionality which allows taxpayers to directly register for the VAT Import One Stop Shop (IOSS) system in Northern Ireland, the HMRC system which allows business to report and pay VAT on imports of low value goods to consumers in the EU, Northern Ireland, or both. HMRC is now working on the second phase of delivery of its IOSS system which will allow agents to register and act on behalf of businesses. HMRC is seeking agent volunteers to participate in testing during phase 2, a unique opportunity to help shape delivery in this phase. The role of a VAT IOSS agent/intermediary is to fulfil the VAT reporting and payment obligations on behalf of businesses who are involved in business to consumer imports of low value goods into the EU and Northern Ireland. HMRC is seeking support to develop its VAT IOSS intermediary service and would benefit from end-user feedback on the prototype designs. HMRC has provided a high-level overview of what would be expected from participants. HMRC is looking for Northern Ireland based agents/intermediaries. Volunteers will be participating in one to one moderated MS Teams sessions with HMRC’s implementation team. Sessions are expected to be one hour in length and timings will be flexible to suit participant availability. Participants will be required to sign a consent form to take part which will also include an agreement not to disclose any information relating to the project and their participation. The objective is to test and gather feedback on the digital prototypes of the VAT IOSS agent service including the registration, return filing, and payment journeys to ensure that these meet user’s needs. Sessions are expected to commence from this month onwards. The ask from HMRC is whether you would be willing to take part in this user research to support them with delivery of phase 2. Email tax@charteredaccountants.ie if you would like to participate or require more information.

HMRC has published the 2025 edition of the Tax Gap for 2023/24, the difference between the estimated amount of theoretical tax that should have been paid to HMRC and the amount that has actually been paid. According to the publication, this fell in real terms to 5.3 percent despite the cash figure of £46.8 billion being at a record high and comparing unfavourably to £46.4 billion in 2022/23. The key trends are that there is a continuing fall in the VAT gap, upward trends in both the small businesses tax gap and corporation tax, however avoidance is showing a small reduction the reasons for which are not clear. The information published represents the best estimate of the Tax Gap at the time of publication and is subject to revision by HMRC if more data becomes available. Since HMRC began to publish this information in 2005/06, the Tax Gap had fallen from 7.4 percent to 5.1 percent in 2017/18 but was broadly stable at circa 5.5 percent in more recent years. In the report’s introduction, HMRC compares the movement in percentage terms for each category of tax from the first year of reporting to 2023/24. The only tax head to show an increase is corporation tax which increased from 11.4 percent in 2005/06 to 15.8 percent in 2023/24; all other tax heads have reduced. The Tax Gap for small businesses remains the largest component by taxpayer group with a 60 percent share in 2023/24. The VAT gap has reduced from 13.8 percent of the theoretical VAT liability in 2005/06 (£11.6 billion) to 5.0 percent in 2023/24 (£8.9 billion). However, although the trend has been one of gradual decline, this has been more erratic in recent years which does not make sense in the context of Making Tax Digital for VAT being fully implemented from 1 April 2022. Avoidance has been revised down in the period 2019/20 to 2022/23 from 0.2 percent to 0.1 percent and according to the report was at an estimated record low in 2023/24 though the reasons for this are not clear and could be because some aspects have been reclassified to other behaviour categories. In its accompanying press release on the 2023/24 figures, the Government overtly references its objective of raising an additional £7.5 billion via measures announced in the 2024 Autumn Budget and Spring Statement to close the tax gap. The following publications and news releases all relate to the 2025 Tax Gap edition: https://www.mynewsdesk.com/uk/hm-revenue-customs-hmrc/pressreleases/tax-gap-estimated-at-5-dot-3-percent-3392916, Quality report: Measuring tax gaps, and Measuring tax gaps tables.

In Irish news this week, the administrative challenges of the Enhanced Reporting Requirement (ERR) were raised by Deputy Shay Brennan in the Dáil and we bring you an update from the recent TALC Collections sub-committee meeting. In UK news, members have been sharing their perspectives on the Institute’s refreshed campaign to reduce the corporation tax rate in Northern Ireland and the Institute is advocating for more broad ranging reform of the UK enquiry regime. In International news, the OECD has published a report on the use of technology by tax administrations globally. Irish 1. View the parliamentary question on ERR raised by Fianna Fáil finance spokesperson, Shay Brennan TD last week following our recent meeting with the Deputy.   2. Read about the representations made by the Institute, under the auspices of the CCAB-I, at the recent TALC Collections sub-committee meeting.   UK 3. In response to the Institute launching its refreshed campaign to reduce the corporation tax rate in Northern Ireland, members and the Institute’s senior management have been sharing their perspectives on the new campaign.   4. Read about the recommendations of the NI Tax Committee who are advocating for wider reform of the UK enquiry regime in their submission to the consultation on behavioural penalties.   International 5. The OECD has published a report outlining how technology is being leveraged by tax authorities around the world. 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.

Revenue has updated the guide outlining the adoption into Irish tax legislation of the various international frameworks for the exchange of tax information between countries. The updated guide includes details on the European Union Directives on administrative cooperation in the field of taxation (DAC’s), the relevant OECD frameworks and the US Foreign Account Tax Compliance Act (FATCA).

Revenue has published a new guide on the Taxation of Deposit interest which provides details on the income tax liabilities arising on domestic and foreign sourced deposit interest income, including the relevant tax rates and reporting obligations. The guide outlines details on the taxation of interest through the application of Deposit Interest Retention Tax (DIRT) as well as the tax treatment of interest where tax has not been deducted at source. Details of relief for foreign tax suffered on deposit interest are also provided.

Revenue has published a new stamp duty manual providing guidance on the application of Consanguinity Relief which allows for a one percent reduced rate of stamp duty on the conveyance and transfer of land between certain related parties. The guidance outlines the relevant eligibility criteria and the interaction between the relief and the Young Trained Farmers relief. The guidance in Schedule 1 - Stamp Duties on Instruments has been updated to remove the material on consanguinity relief as the details are now included in the new guidance.

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 most recently published Brexit and Beyond newsletter from the Northern Ireland Assembly EU Affairs team. The House of Lords Northern Ireland Scrutiny Committee has paid a visit to NI to examine how effectively its voice is represented on the Windsor Framework as part of its ongoing inquiry and the UK and the US governments have agreed to further reduce tariffs on cross-border trade.  Miscellaneous guidance updates and publications This week’s miscellaneous guidance updates and publications are as follows: Appendix 23 Imports: Declaration Category Data Sets, Appendix 21: Import Declaration Category Data Sets, Apply to claim a repayment or remission of import duty on ‘at risk’ goods brought into Northern Ireland, Appendix 25 BIRDS: Declaration Category Data Sets, Appendix 24: Declaration Category Data Set, Appendix 22: Declaration Category Data Sets Landing Page and Introductory Text, Apply for a voluntary clearance amendment (underpayment) (C2001), Report a problem using the Customs Declaration Service, Moving licensed goods into or out of Northern Ireland, Discover customs authorisations that help you import and export goods, Notices made under The Customs (Import Duty) (EU Exit) Regulations 2018, Check how to move goods through ports that use the Goods Vehicle Movement Service, Create a goods movement reference, and External temporary storage facilities codes for Data Element 5/23 of the Customs Declaration Service.  

The Minister for Finance, Paschal Donohoe presented the Finance (Local Property Tax and Other Provisions) (Amendment) Bill 2025 to Dail Eireann last week. The bill provides changes to the charging structure for Local Property Taxes (LPT) and expands all the charging bands by twenty percent. LPT charges will increase by five to six percent for homes values under €1.26 million and homes valued between €1.26 million and €2.1 million will see an increase in base charges of seven to fourteen percent. The principal changes introduced by the Bill were outlined in our previous two Tax Newsletter items on 7 April 2025 and the main changes proposed at this second stage are as follows: The Bill as previously published allowed local authorities to vary LPT charges upward by 25 percent from 2026 onwards. The amendment now proposed means a deferral of the introduction of this increase by one year meaning it will take effect from 2027. Partial relief on LPT applies to a property which has been adapted for use by a person with a disability. The practice to date on an administrative basis, has meant a reduction of €87,500 in the chargeable value of the relevant adapted property. The amended Bill is proposing a widening of the valuation bands meaning a reduction of €105,000 of the chargeable value of adapted properties where certain conditions are met. This will ensure the administrative practice that has been place since 2021 will be put on a legislative footing.  In the Minister’s opening statement, he noted that the Central Statistics Office (CSO) has indicated that property prices have increased by more than 20 percent nationally since November 2021. The Minister also highlighted that if property revaluation were to proceed in November 2025 without any changes to the bands or rates, around 70 percent of properties would move up by at least one band.  

In this week’s detailed miscellaneous updates which you can read more about below, HMRC will be publishing a new guidance manual to cover the implementation of the OECD’s Pillar Two rules in the UK and the first deadline for in scope groups to register to report for Pillar Two is next Monday 30 June 2025. HMRC has also provided us with an update on the ongoing Class 2 national insurance contributions (NICs) issue which has resulted in incorrect tax calculations being issued to some taxpayers for 2024/25. In other news this week: HMRC has published the latest Agent Update: Issue 132, The Government has published an updated policy paper ‘Tax Policy Making Principles’, which sets out its approach to delivering tax policy changes through the single major fiscal event cycle, and how it will engage with stakeholders during tax policy development. This is the first update on this from the new Government since it came to power last year. Note that we are not aware of any stakeholders being consulted on this, The Public Accounts Committee has held an evidence session with HMRC about the steps they are taking to ensure wealthy individuals pay their taxes as part of its ongoing inquiry in this area, The latest version of the Tax agents handbook has been published, and The minutes of the most recent meeting of the HMRC Guidance Strategy Forum are available on GOV.UK. Pillar Two manual to be published HMRC will be publishing a new guidance manual to cover the implementation of the UK’s Pillar Two rules. Over the last two years, draft content for this manual has been published in tranches for consultation. Four separate tranches have been published as follows: 15 June 2023,  21 December 2023, 12 September 2024, and  28 January 2025. Earlier this month, HMRC advised that consultation responses have been reviewed and will be reflected in the HMRC guidance manual where appropriate. In the introduction to the consultation on the fourth tranche of draft guidance, HMRC states “the guidance manual will be published in full in late spring” so we should expect to see this soon.   The deadline to register to report for Pillar Two is also approaching. Groups in the scope of the Pillar Two rules in the UK must register within six months of the end of the first accounting period which started on or after 31 December 2023. This means impacted groups with an accounting period ended 31 December 2024 must register by 30 June 2025. Registration and reporting must be done using HMRC’s online service for this. 2024/25 Class 2 NICs issue From 2024/25, self-employed people with profits below the 2024/25 limit of £6,725 can opt to pay Class 2 NICs voluntarily for certain contributory state benefit purposes. Those with profits above this limit no longer have to pay Class 2 NICs to access the affected benefits. HMRC has been investigating why some taxpayers, including some paying voluntarily, have received a self-assessment tax calculation (SA302) from HMRC that includes a liability for Class 2 NICs. HMRC has advised us that the nature of the error depends on individual circumstances, but in general, some taxpayers have seen a Class 2 NICs liability added to their account when it should not have been. This issue mainly affects taxpayers with self-employed profits above £12,570. In some cases, HMRC has been able to correct this and the taxpayer will have been notified. In most cases, the impact is an incorrect Class 2 NICs charge of £358.80, but in some circumstances, the amount is less.   HMRC will notify the taxpayer when they correct their record and has confirmed that anyone who has made a payment will either be refunded or, have a credit added to their Self-Assessment statement. The root cause of the issue has been identified, and a fix is expected to be implemented by the end of July. Once the fix is in place, HMRC will correct the affected tax calculations. This will happen before any incorrect amounts due impact the tax owed for 2024/25.

The Department of Finance has published minutes of the Business Tax Stakeholder Forum meeting held on 28 March 2025 which was attended by representatives from the Institute, under the auspices of CCAB-I. The forum provides a platform for key business tax stakeholders to engage with the Department of Finance on issues concerning business taxation and related policy matters. To date in 2025, the Institute has made several submissions under the framework, including recommendations to enhance the new Participation Exemption for Certain Foreign Distributions and the introduction of a DWT exemption for Investment Limited Partnerships. CCAB-I’s letter on the Participation Exemption for Certain Foreign Distributions highlighted the challenges posed by certain conditions of the exemption which are limiting the intended benefits of the relief. CCAB-I called for a broadening the geographical scope of the exemption and amendment of the five year ‘look back’ rule. The Institute also outlined the case for the introduction of a DWT exemption for ILP’s and the importance of this exemption in enhancing the attractiveness of the Irish ILP regime. There will be further discussions of our proposals at a bespoke meeting on the matter later this week. The Institute also provided feedback on a recent questionnaire issued by the Department of Finance on the Special Assignee Relief Programme (SARP) and Foreign Earnings Deduction (FED).