Revenue has published a revised Vehicle Registration Tax Manual Section 1A providing updated guidance on the declaration and payment of VAT for new and used vehicles. Further information is available in Revenue’s eBrief 172/22.

The Report of the Commission on Taxation and Welfare has been published. The Commission was tasked to review how best the taxation and welfare system can support economic activity and income redistribution, whilst promoting increased employment and prosperity in a resilient, inclusive, and sustainable way, ensuring that there are sufficient resources available to meet the costs of public services and supports in the medium and longer term. A key message of the report is that, over time, the overall level of taxation as a share of national income will have to increase. The Commission recommends broadening the base within and across most tax heads to secure sustainability of the taxation system against future challenges. The Commission calls for increasing the yields from taxes that are less distortionary, promote environmental goals and enhance the overall progressivity of the system. In order to achieve this, the Commission proposes that the balance of taxation must shift away from taxes on labour and towards taxes on capital, wealth, and consumption, with a strengthening of the PRSI system also required. Welcoming the report, the Minister for Finance, Paschal Donohoe said: "The report is a significant body of work running to more than 500 pages and containing 116 recommendations. This report poses serious questions that we as a society must carefully consider and the recommendations will foster real debate around how we reform our taxation and welfare systems over the longer term in order to safeguard their sustainability and adapt to a rapidly changing environment. Given the significant and wide-ranging recommendations contained in the Report, it is important to allow for detailed consideration of the recommendations. It is my intention to discuss the Report with my government colleagues over the coming weeks and outline an initial response as part of my Budget day statement.”

The Institute continues to engage with HMRC on Making Tax Digital (“MTD”) and the Government’s Tax Administration Strategy. Over the summer, the Institute was represented at various forum meetings at which the many barriers to the successful introduction to MTD for income tax from April 2024 were discussed and highlighted including the lack of available software and the limited numbers of taxpayers participating in the trial. During a meeting at the end of August ahead of the announcement of the new Prime Minister and her ministerial team, the Institute and other Professional Bodies reiterated the need for HMRC to take stock now of the very challenging timetable for MTD for income tax and revise this, where required, to enable HMRC to  re-consult with stakeholders. Business, taxpayers and HMRC alike would benefit from this additional time and collaboration. HMRC should also focus on delivering current objectives well rather than over-stretching capacity. Even more pressing, MTD for VAT and the closure of the online VAT portal from 1 November 2022 was also highlighted as a major concern given this could impact on the Exchequer if businesses are not signed up to MTD for VAT on time and are unable to pay the VAT due online. The Professional Bodies are clear that further digitalisation of the UK tax system is only possible if it is delivered and implemented in such a way that it allows businesses and taxpayers sufficient time to prepare and participate in trials. The UK Government also needs to deliver certainty and stability for businesses during the current cost of living and energy crisis. The Professional Bodies stressed that any in-year tax changes being considered by the Government should take this into account.

The UK Government is preparing to hold a mini fiscal event later this week with reports indicating that this will take place on Friday 23 September. The new Chancellor Kwasi Kwarteng is also expected to set out more detail on the recently announced energy supports. A full Budget is still expected to take place in the autumn as normal. Next week’s Chartered Accountants Tax News will feature the detail of the tax announcements made in Friday’s mini fiscal event. The energy bill support previously announced is expected to start for households from 1 October though it is not yet clear how the scheme will work in Northern Ireland. Detailed plans for businesses are not expected to be available until later in the year but are expected to be backdated to the start of October and will last for a six month period.

As previously advised, for the majority of businesses in the Debt Warehousing Scheme Period 2 will end on 31 December 2022. Revenue intends to contact taxpayers in October 2022 requesting they make arrangements to repay the warehoused debt. Those eligible for the April 2023 Period 2 extension will receive letters in February 2023.If a Phased Payment Arrangements (PPA) is required, it must be applied for through the normal online channels and will be subject to caseworker approval. A standard PPA will have a down payment of 25% and a duration of up to 36 months. These applications can process very quickly. For non-standard PPAs, the taxpayer will need to outline a business case for why a non-standard PPA is required and, as part of the caseworker review of the application, additional supporting documentation may be requested.  The extent of additional documentation required will be dependent on the specific circumstances of the case and may include some of the following documents: Up to date bank statements List of all assets and any encumbrances thereon Outline of what, if any, cost cutting measures have been implemented in the business including drawings by the owner, directors. Cash flow projections Up to date management accounts Copies of any relevant Contracts which would impact [positively or negatively] on the ability to make repayments.

In its response to the consultation “Raising standards in tax advice: protecting customers claiming tax repayments”, the Institute sets out some of the root causes underlying why repayment agents have been able to set up in recent years. This includes tax complexity, and the UK’s tax policy making process amongst others. Although some proposals in the consultation could assist in mitigating poor behaviours by certain repayment agents, educating taxpayers to understand how the tax system impacts on them and enabling them to claim reliefs and allowances through a simple online process via their Personal Tax Account would reduce the number of taxpayers seeking help from these agents in the first place. In respect of the consultation proposals:- Repayment agents should not be treated any differently to any other tax agent and should be required to both sign up for an agent services account and obtain formal authorisation by clients via a 64-8 or through the online authorisation service; Clearer information and restrictions on the use of assignments would all help improve the issues arising from poor behaviours by certain repayment agents; The use of personal online credentials by repayment agents is not only a fraud risk but, if the agent is a member of a professional body such as Chartered Accountants Ireland, is also a breach of professional standards. HMRC should use the relevant powers at its disposal to report such breaches to the relevant professional body; and HMRC is considering a number of options, which would have a UK-wide application, to restrict the assignment of tax repayments. HMRC needs to be clear that such options will also apply to all types of repayment agents located both within and outside the UK as there is a risk that some repayment agents may go offshore to avoid any restrictions introduced. The Institute also made a number of other recommendations which you can read in the submission here.

The Institute recently made an informal submission to the House of Lords Sub-Committee on the Protocol on Ireland in respect of the Northern Ireland Protocol Bill. It has now been confirmed that the submission has been accepted by the Sub-Committee as evidence. The Sub-Committee has since formally opened its inquiry into the Bill which the Institute will be responding to. The Committee is scrutinising the Bill’s provisions, examining the economic, political and legal impact of the legislation, and assessing the EU’s response, in the context of and to inform consideration of the Bill by the House of Lords. This crucial inquiry is taking place during the autumn hence we encourage you to share your feedback by email.

Members have raised issues regarding uploading 2021 Form CT1s which have been prepared using Revenue’s ROS Offline application. Following representations, Revenue has informed us that where a return has been started on ROS Offline (i.e. work-in-progress) but was not received by Revenue before the IT release of 16 August 2022, the return cannot be submitted in ROS without a technical amendment. Details of this technical amendment are contained in Appendix 2 of Revenue’s updated 2021 Form CT1 Tax and Duty Manual. The alternative for taxpayers and agents is to restart the Form CT1 using the updated ROS Offline application. Where Forms CT1 were received by Revenue before the IT release of 16 August 2022, these were fixed by Revenue and processed accordingly.

In this week’s EU exit corner, we bring you the latest guidance updates and publications relevant to EU exit 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.

Revenue will be issuing Level 1 Revenue Compliance Intervention letters to all taxpayers who participated in the Debt Warehousing Scheme, as well as to those taxpayers who were eligible to participate, to offer them the opportunity to self-review their returns and make an unprompted qualifying disclosure of any previously undeclared liabilities for taxes eligible for warehousing in Period 1. The benefits of the debt warehousing scheme will be available to taxpayers in respect of additional eligible tax liabilities provided the unprompted qualifying disclosure is submitted by 31 January 2023. It is expected that the letters will start arriving from Friday 23 September 2022.

HMRC’s latest schedule of webinars is now available for booking. Spaces are limited, so take a look now and save your place. HMRC has also made available a YouTube video which contains an overview of how to report COVID-19 support payments and grants on Company Tax Returns, what happens if you’ve claimed too much and the records that must be kept.  Making Tax Digital for VAT: register here This webinar will provide some of the basics of Making Tax Digital for VAT. This includes what has changed, using software and keeping digital records, plus an introduction to penalty reform. From April 2022, these requirements apply to all VAT-registered businesses, including those with turnover below the £85,000 VAT registration threshold. If you have any questions, please send them to email HMRC prior to the webinar, including the title of the webinar in the ‘Subject’ line of your email. HMRC will answer as many questions as possible on the day.

Do you use HMRC online services? Don’t be caught out by the planned downtime to some services. HMRC are warning about the non-availability of specific services on the HMRC website, a range of services are impacted. Check the relevant page for information on planned downtime.