The Commission’s priorities on tax matters were outlined in a recent address to the European Parliament’s tax matters subcommittee. Commissioner Hoekstra said that simplifying and fraud-proofing the EU’s tax laws, further reforming VAT rules, favouring renewable energy through tax policy, and better addressing the tax gap would be some of his main priorities. The Commissioner also confirmed that he will look for opportunities to engage constructively on Pillars One and Two with the US Administration in light of the recent US executive order on the OECD global tax deal.

Last week Revenue published statistics relating to 2024 PAYE tax returns filed to date this year on the back of which PAYE taxpayers are being encouraged to use the myAccount service to finalise their tax position. The statistics showed that as at 29 January 2025, over 550,000 PAYE returns had been processed for 2024 which resulted in refunds of over €400 million to PAYE taxpayers. Revenue is reporting a continuing increasing trend in the use of Revenue’s my Account service to file tax returns. An underpayment of tax arose in approximately 12 percent of the returns processed and Revenue has advised that they will engage with the relevant taxpayers to collect the tax due by reducing tax credits over a four-year period. Revenue has reported they estimate a further €389 million of tax may have been overpaid by PAYE taxpayers in 2024. In light of this, Revenue has launched a campaign to encourage PAYE taxpayers to use the myAccount service to finalise their tax position. Revenue has provided details on how to access this service and detailed guidance on submitting a PAYE tax return and claiming tax credits and reliefs.

At a recent public meeting hosted by the FISC subcommittee on tax matters, experts discussed ‘A coherent tax framework for the EU’s financial sector’. The forum considered innovative solutions for the taxation of the EU's financial sector to further integration, facilitate cross-border operations and foster digitalisation and innovation. The hearing also considered the challenges stemming from the current VAT exemption for financial services.

In this week’s post EU exit corner, we bring you the latest guidance updates and publications relevant to 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. Bookings are now open for a HMRC webinar next week on the new arrangements for the movement of parcels and freight between Great Britain and Northern Ireland which commence from 31 March 2025, delayed from 30 September 2024. For more information, click read more. HMRC webinar on new arrangement for parcels and freight The Windsor Framework establishes a new set of arrangements for the movement of goods between Great Britain and Northern Ireland via both parcels and freight. HMRC has organised a free webinar on Monday 24 February 2025 from 2-3pm to help businesses that make parcel movements between Great Britain and Northern Ireland prepare for the new arrangements by 31 March 2025. HMRC is encouraging interested parties to sign up. This webinar follows on from the webinar held on 21 November 2024, which you can view the recording of on the newly launched WF resource page. On the day, the webinar will cover:  What the new parcel arrangements are, The UK Internal Market Scheme (UKIMS) and how to send business to business parcels under UKIMS, Illustrative parcel journeys for consumer and business parcel movements, and A Q&A slot. To register and pre-submit any questions, please click this link. You are also reminded to save the invite to your calendar once registered. Miscellaneous guidance updates and publications Multinational companies and companies based in both GB and NI Economic Operators Registration and Identification (EORI), EORI, Who should register for an EORI number, Place of registration, Finding and checking an EORI, and Location codes for ports of entry in Great Britain.  

The Department of Finance and the Department of Public Expenditure and Reform have published the Fiscal Monitor for January 2025 which confirms an Exchequer surplus of €3.6 billion in January. This compares to a surplus of €2.3 billion recorded for January 2024. Tax receipts collected in January were €10.1 billion, which was €2.3 billion ahead of the same period last year. Excluding the once off receipts arising from the judgement of the Court of Justice of the European Union (CJEU) in the Apple State aid case, total receipts of €8.4 billion were collected in January, ahead by €0.6 billion on the same period last year. Income tax receipts of €3.0 billion were recorded in January, €0.1 billion ahead of January 2024. Although January is not generally a significant month for corporation tax, receipts of €1.8 billion were collected in the month which was an increase on January 2024 by just under €1.8 billion, due almost entirely to once-off receipts arising from the CJEU ruling. January is a VAT-due month and generally the strongest VAT month of the year, encompassing the Christmas trading period. Receipts of €4.1 billion were collected in the month, up by 5.8 percent compared to January 2024. Excise duty receipts of €0.5 billion were collected in January, up by €27 million on the same month last year. Commenting on the figures, Minister for Finance, Paschal Donohoe said “Today’s figures show that tax revenues continued to demonstrate steady growth at the start of the year. In particular, the ongoing expansion of income tax and VAT receipts are a positive indicator of the fundamental strength of our economy. However, there are clear risks ahead. As a small open economy, Ireland is particularly vulnerable to changes in the global economic environment. This underlines the importance of continuing to pursue a balanced and sustainable fiscal policy. That is why Government has committed to using the once-off proceeds from the CJEU decision to improve our stock of infrastructure, as well as investing windfall tax revenues in the Future Ireland Fund to prepare for future challenges.”

The OECD has published the latest peer review results on preferential tax regimes under BEPS Action 5. The results highlight the progress made by jurisdictions in addressing harmful tax practices through the implementation of BEPS Action 5.

The European Commission is seeking feedback on an initiative to provide standard forms and computerised formats to be used in relation to the sixth update to Council Directive 2011/16/EU on administrative cooperation in the field of taxation. The consultation period runs until 4 March 2025.

In Irish news today, the Institute, under the auspices of the CCAB-I, has responded to the public consultation on the tax treatment of interest in Ireland and we bring you an update from Revenue on compliance information provided to taxpayers and businesses. In UK news, HMRC has issued an update for those severely impacted by the recent exceptional weather events, and it confirms it is not proceeding with plans requiring employers to provide more detailed employee hours data. In International news, the OECD has published guidance on the operation and management of a tax administration audit program. Ireland 1. Read the response by the Institute to the public consultation on the tax treatment of interest in Ireland. 2. Revenue is to write to non-filers of income tax and corporation tax returns. UK 3. HMRC contacts the Institute advising it will take a pragmatic approach to late filing for those affected by the recent exceptional weather. 4. In line with the Institute’s recommendation, HMRC confirms it is not proceeding with plans requiring employers to provide more detailed employee hours data. International 5. The OECD have recently published the VITARA Reference Guide on The Audit Program which provides guidance on a tax administration audit program. 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 two other Tax and Duty Manuals. Details are set out below. The manual on the Exemption of the Annual Allowance for reserve members of the Garda Síochána is updated to provide for the continuation of this Income Tax exemption for reserve members of the Garda Síochána. The manual on Charges on Income for Corporation Tax purposes has been updated to include a new section dealing with the dissolution of companies.

Last Monday we highlighted that the Institute would be contacting HMRC to flag our concerns about the 2023/24 self-assessment online filing deadline in the context of the recent exceptional weather. We asked HMRC to take a pragmatic approach to this issue given the particular impact this has had on taxpayers, businesses, and agents in Northern Ireland and their ability to file returns on time. HMRC contacted us last Thursday with an update which confirms that whilst a blanket easement is not possible, HMRC will take a sympathetic approach towards those filing after the deadline on a case-by-case basis. HMRC has also advised that if a return is late because a taxpayer applied before 31 January 2025 for confirmation of available overlap relief in the context of basis period reform, they have until 28 February 2025 to file their return without incurring a late filing penalty. More information on this is available in the most recent Stakeholder Digest. The Institute recommends that if a return is filed late because of the recent weather, the additional information box should be completed to outline the specific reason(s) why and claim reasonable excuse. Further guidance is available in the Stakeholder Digest on delayed overlap relief requests and what action to take when filing a return late. The full update from HMRC on the impact of the exceptional weather is as follows: “Thank you for raising the possible impacts of the recent severe weather across parts of Ireland and the UK on people and businesses in the run up to the Self-Assessment deadline. Undoubtedly, this would have impacted some individuals, businesses and agents still trying to submit SA returns. Given the timing of these very recent events and the fact that areas most impacted are difficult to identify, we are not in a position to invoke a unilateral easement. We will however take a sympathetic approach towards those filing after the deadline on a case by case basis. We don’t want to collect penalties – our aim is to support taxpayers to get their tax right and avoid fines. We will cancel penalties where taxpayers can provide a reasonable excuse within 30 days of the penalty being issued, in which case no financial fine is levied. We will of course take into account the impact of adverse weather when it comes to such appeals. We will also take steps to ensure that teams reviewing forthcoming appeals are alert to the detail of the guidance and will apply it empathetically, appropriately and consistently. Please be reassured that HMRC will be delivering a fair, even-handed and consistent approach across everyone impacted in whatever capacity.” By way of reminder, those without a reasonable excuse will be issued with a penalty including: an initial £100 fixed penalty, which applies even if there is no tax to pay, or if the tax due is paid on time, after 3 months, additional daily penalties of £10 per day, up to a maximum of £900, after 6 months, a further penalty of 5 percent of the tax due or £300, whichever is greater, and after 12 months, another 5 percent or £300, whichever is greater. 31 January 2025 was also the due date for paying any remaining income tax and Class 4 national insurance contributions for 2023/24 and is also the first self-assessment payment on account deadline for 2024/25.

Revenue has updated the Tax and Duty Manual Exemptions and Reliefs from Stamp Duty to provide guidance on the exemptions available to state financing agencies and funds. An appendix has also been added to the manual which provides a complete list of the reliefs and exemptions included in Part 7 Stamp Duty Consolidation Act 1999

Revenue has updated the Tax and Duty Manual Charitable Tax Exemption to reflect amendments arising from Finance Act 2024. The main changes are as follows: A new paragraph has been included to provide for a charity to accumulate funds for charitable purposes and still retain its charitable exemption. To retain the exemption in these circumstances, the charity must expend the income by the end of the fifth year after the year in which the income was received, and The two-year waiting period for eligibility for the Charitable Donation Scheme (CDS) has been removed. In circumstances where a charity has merged or re-organised into another entity, it is no longer a requirement that the predecessor entity must have been approved for the CDS for two years.