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.

Revenue has updated the Tax and Duty Manual Rent Tax Credit to reflect Finance Act 2024. The updated manual reflects the increase in the rent tax credit from 1 January 2024 to €1,000 for a single person and €2,000 for a jointly assessed married couple/civil partners. As the increase applies retrospectively from 1 January 2024, the manual also outlines how to make a claim for the increased credit for 2024. Relevant examples in the manual have also been updated to reflect the increased credit.

Under plans announced by the previous government, from April 2026 employers would have been required to provide more detailed employee hours data through PAYE Real Time Information. In our response to the original consultation which proposed this, the Institute argued that HMRC should not proceed with these plans and should instead ensure that it makes more effective use of the data it already collects. The Government has now announced in HMRC’s latest Stakeholder Digest that it is withdrawing these specific plans after listening to stakeholder feedback about the administrative burden these requirements would have brought. The requirements for the self-employed to provide start and end dates of self-employment and for company owner-managers to provide details of dividend income paid by their company in self-assessment tax returns are going ahead as planned. These requirements will come into effect from 2025/26 for which guidance will be published in due course.

Revenue has updated the Tax and Duty Manual Universal Social Charge (USC) to reflect Finance Act 2024. The main changes to the manual are to reflect the increase in the rate thresholds and the reduction in the USC rate of four percent to three percent. Relevant examples in the manual are updated for these changes. The list of payments exempt from USC has also been updated.

The Taoiseach, Micheál Martin, has appointed Maura Kiely as Revenue Commissioner to succeed Gerry Harrahill. Maura joined Revenue in 2017 and previously worked with the Central Bank and in private practice.

In this week’s miscellaneous updates, HMRC is holding a webinar tomorrow on the national minimum wage (NMW) for seasonal workers and a further webinar is being held next week on the NMW and apprentices. A number of webinars are also being held for employers, details of which are set out below. HMRC has also published a new release of guidance for consultation on Pillar Two. The minutes of the November Wealthy External forum, which the Institute is represented on, have also been published on GOV.UK and finally HMRC has started at trial which involves emailing ‘guidance packages’ to taxpayers following the submission of research and development (R&D) tax relief claim notification and additional information forms. New Pillar Two guidance consultation HMRC has published a consultation document containing supplementary pages of draft guidance. This release includes pages that had not previously been published, including pages on flow-through entities, joint ventures, and additional top-up tax amounts. It also includes pages created/revised to reflect amendments to the UK’s Pillar Two legislation in the current Finance Bill, including to the Under Taxed Profits Rule. Responses can be provided on any guidance content, including previously released pages, and these will be reviewed before publication of the final manual. Please email responses to pillar2.consultation@hmrc.gov.uk including the page reference number where applicable. For further information, see the introduction page in the consultation document. Webinars for employers HMRC is holding the following live webinars for employers over the next few weeks: 4 February - getting payroll information right, 5 February -  employer filing obligations, 11 February - statutory maternity and paternity pay, 12 February-  statutory sick pay, and 19 February - taxing employee's benefits and expenses through your payroll. HMRC’s collection page for new employers contains further information and links to previously  recorded webinars. New R&D guidance trial HMRC has started a trial which involves emailing ‘guidance packages’ to taxpayers after the submission of R&D tax relief claim notification and additional information forms. This aims to provide key pieces of guidance and support when making R&D tax relief claims. According to HMRC: the emails will be sent on a random basis, the content of the email will differ depending on the form(s) submitted. However, it will include contact details for HMRC if the recipient was not aware that the form(s) were submitted, and there is no requirement to respond to the email.

Revenue has confirmed that they are aware of the difficulties the recent exceptional weather may have caused for the timely tax compliance of adversely impacted taxpayers and businesses. Revenue has also indicated that when agreeing flexible payment arrangements, they will take into consideration the financial circumstances of those impacted and particularly those who are experiencing temporary cash flow difficulties. The Press Release confirms that impacted taxpayers and businesses should contact the Collector-General’s office once their situation permits, to agree mutually agreeable arrangements for restoring timely tax compliance.

Revenue has informed us that notices will be issued to taxpayers who are currently registered for income tax or corporation tax and who have not filed income tax or corporation tax returns for years up to and including 2023. The notice is a Level 1 Compliance Intervention in accordance with Revenue’s Compliance Intervention Framework. Revenue is reminding taxpayers that the non-filing of a required tax return can result in a more detailed review by Revenue and is a prosecutable offence.   Agents will receive a single notification in their ROS inbox, listing their clients who have been issued the notice, together with a reminder for agents to file any outstanding returns for their clients.

Last week, the Institute, under the auspices of the CCAB-I, responded to the public consultation on the tax treatment of interest in Ireland. In our response, we stated the need for significant reform in order to remain competitive within the global race for talent and investment. As such, our most important proposal was our recommendation for a direction of travel which ends in a system which allows all commercial interest as a tax-deductible expense, whether trade-related or not, subject to the limitations described in the Interest Limitation Rule and the Anti-Hybrid Rules. The key policy rationale for such a move is the inherent protection afforded to the tax base in these rules. In our view, such a move presents an opportunity for a world-class and robust system to govern the taxation of interest in Ireland. The consultation looked at the taxation of both interest income and interest expenses, with every aspect of the Taxes Consolidation Act 1997 relevant to interest considered. The overall structure of the consultation was twenty-seven questions across the following broad headings: Taxation of Interest Income Interest Deductibility ATAD Interest Limitation Rule Anti-avoidance provisions and other restrictions Financial Services Transactions Withholding Tax Reporting Obligations Reforming Existing Interest Regime We made recommendations under each heading, however we have also been conscious of the need for caution in what is a complex and carefully balanced area of taxation. Our proposal for a system based around the Interest Limitation Rule and the Anti-Hybrid rules reflects the opportunity to choose a new way of taxing commercial interest which should not prejudice taxpayers and their existing arrangements. We hope that this consultation will form part of a wider and ongoing process of stakeholder engagement in the months and years ahead. As always, we will keep you updated via Tax News.

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. HMRC has also sent a guidance email about how to prepare for the next stage in the Windsor Framework which commences from 31 March for parcels and freight moving from Great Britain to Northern Ireland. A new WF guidance page was also launched last week which aims to provide information and resources to help businesses deal with any changes. Miscellaneous guidance updates and publications Notices made under the Taxation (Cross-border Trade) Act 2018, Notices under The Customs Transit Procedures (EU Exit) Regulations 2018, Search the register of customs agents and express operators, External temporary storage facilities codes for Data Element 5/23 of the Customs Declaration Service, Authorised Consignee Temporary Storage (ACTS) location codes for Data Element 5/23 of the Customs Declaration Service, Transit newsletters — HMRC updates, and Attending an inland border facility.