Last week we highlighted a request from HMRC for agents to participate in phase two of testing the VAT Import One Stop Shop (IOSS) system in Northern Ireland, the system which allows business to report and pay VAT on imports of low value goods to consumers. As mentioned HMRC is now working on the phase of delivery of this which will allow agents to register and act on behalf of businesses. HMRC is seeking agent volunteers to participate in testing during phase two. Read more about how you can get involved in this unique opportunity and email tax@charteredaccountants.ie if you would like to participate or require more information.  

In this week’s detailed miscellaneous updates which you can read more about below, HMRC is seeking participants for a 12-month project aimed at improving corporation tax guidance, and a number of changes have been made to the personal tax query resolution service.   In other news this week:    The Institute for Fiscal Studies has published a paper which asks what role taxation can/might play in reducing inequality in low/middle-income countries,   HMRC has published a guidance collection page for taxpayers on setting up and running a small business, and   HMRC is holding webinars this week looking at statutory maternity and paternity pay and statutory sick pay.   Corporation tax guidance research project   HMRC’s Comms and Guidance team are currently conducting research as part of a 12-month project aimed at improving corporation tax guidance. According to HMRC, this initiative is being conducted in response to reports that there is a lack of understanding around certain tax principles.   The project will explore the following four phases:   wholly and exclusively,   capital v revenue,   record keeping, and   director’s loans.   The team is currently in the discovery phase for wholly and exclusively, the goal being to understand how organisations manage and submit expenses on their corporation tax return, and how well they grasp the relevant tax principles. HMRC’s team is keen to speak with:   Limited companies,   Foreign companies with a UK branch or office,   Clubs, co-operatives, or other unincorporated associations (for example: community groups, sports clubs), and   Agents and accountants acting on behalf of these taxpayers.    They are especially interested in micro-entities and small companies with:    An annual turnover of no more than £10.2 million, and   No more than 50 employees.    The research is being undertaken via a 60-minute MS Teams session and will require completion of a consent form and privacy notice in advance. As a thank you, participants will receive a £60 Love2Shop voucher, redeemable at a wide range of high street and online retailers.    If you or a client would be interested in participating, please contact customerengagementforums@hmrc.gov.uk.    Changes to the personal tax query resolution service for agents   Earlier in the year we highlighted the launch by HMRC of a new enquiry service for agents, the personal tax query resolution service which was launched on 31 March. HMRC has been analysing and improving the service since then to make it quicker and easier to access; this includes introducing interactive guidance and enabling agents to access the service using the 'Where's my reply' tool instead of emailing HMRC. These changes are now live.    The ‘Where’s my reply’ tool should first be used by agents to check that their query meets the eligibility criteria before the agent subsequently submits their query. Queries should therefore no longer be sent by email. The aim of this change is to enhance the user experience, save time, and increase HMRC’s efficiency so that the relevant teams can focus on dealing with eligible queries and responding within the relevant timeframes. The guidance in the ‘Tax agents handbook’ has since been updated to reflect this.    By way of reminder, this service is specifically for PAYE and Self-Assessment queries for individuals; it is not available for employer related queries. Before using the service, you must:    have checked the ‘Where’s my Reply’, and at least 20 working days must have passed from the reply date given by the tool,   have tried at least twice to resolve the query by contacting HMRC’s Agent Dedicated Line or Agent Webchat, and   not have already initiated a complaint with HMRC related to the query.    In response, HMRC aims to:    make contact with the agent within 48 hours to acknowledge their query,   provide an update every five working days by phone, and   resolve the query within 20 working days or make an action plan if this is not possible.    To help HMRC resolve queries within the set timeframe, agents are asked to:    provide all relevant information and documentation,   respond promptly if HMRC asks for clarification, or more information,   not to chase a query before the 20 working days have passed, and   not to use this service to chase repayments. 

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. HMRC is seeing an increase in applications to the UK Internal Market Scheme and have developed a document setting out helpful hints and tips to help minimise errors when applying and speed up the authorisation process. And finally, the new UK-US Trade deal came into force last week.  Miscellaneous guidance updates and publications   This week’s miscellaneous guidance updates and publications are as follows:  Data Element 2/3: Documents and Other Reference Codes (Union) of the Customs Declaration Service,   Simplified procedures exclusion list of procedure and additional procedure codes for CDS,   Appendix 2: DE 1/11: Additional Procedure Codes of the Customs Declaration Service (CDS),   Appendix 22: Declaration Category Data Sets Landing Page and Introductory Text,   Appendix 2: DE 1/11: Additional Procedure Codes,   Appendix 1: DE 1/10: Requested and Previous Procedure Codes,   Reference Document for The Customs (Northern Ireland) (EU Exit) Regulations 2020,   Data Element 2/3: Documents and Other Reference Codes (National) of the Customs Declaration Service (CDS),   Manage your import duties and VAT accounts,   Software developers providing customs declaration software,   Apply for repayment of import duty and VAT (CHIEF),   How to claim a repayment of import duty and VAT if you've overpaid,   Check if a business holds Authorised Economic Operator status,   Apply for a repayment of import duty and VAT in the Customs Declaration Service,   Check when you can account for import VAT on your VAT Return,   External temporary storage facilities codes for Data Element 5/23 of the Customs Declaration Service, and   Internal temporary storage facilities (ITSFs) codes for Data Element 5/23 of the Customs Declaration Service.

In Irish news this week, Revenue has revised its guidance on the VAT waiver of exemption following the High Court decision in the Killarney Consortium case and Revenue has also updated its guidance on Relevant Contracts Tax (RCT) to clarify the application of RCT on contracts involving both the sale of land and provision of construction services. In UK news, the latest Tax Gap data has been published and HMRC is seeking agent volunteers to take part in testing during phase two of delivery of its Import One Stop Shop system. In International news, the European Commission has published its annual report on taxation. Irish 1. Revenue has updated its guidance on the collection of cancellation amounts arising from the cancellation of a waiver following the High Court’s judgment in the Killarney Consortium C v Revenue Commissioners case. 2. Read the updated guidance published by Revenue on the RCT treatment of contracts that involve both construction services and land sales. UK 3. The 2023/24 Tax Gap data has been published by HMRC. 4. Are you an agent involved in filing Import One Stop System (IOSS) returns and payments on behalf of clients? HMRC is seeking agents to participate in testing during phase 2 of delivery of the IOSS system. Read about what you can expect and how to get involved. International 5. Read the Annual return on taxation 2025 which was recently published by the European Commission. 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 advised there is currently an issue affecting the submission of Form CT1 2025 returns via third-party software. The issue is being dealt with as a matter of priority and a resolution is scheduled for today.

The Minister for Finance has recently issued a press release confirming that the poultry broiler sector will be removed from the VAT Flat-Rate Addition scheme from 1 September 2025. The decision follows advice from the Revenue Commissioners and the Department of Finance that overcompensation is occurring within the sector.  Farmers whose turnover exceeds the relevant thresholds and who are impacted by the change will need to register for VAT if they wish to reclaim VAT on their inputs. The flat-rate addition scheme is designed to reimburse non-VAT registered farmers for the VAT incurred on inputs used in their farming operations. This is achieved by allowing the farmer to add a flat-rate percentage (currently 5.1percent) to the price charged on supplies to a VAT registered person.  EU legislation permits the use of a flat-rate scheme for farmers, with a key condition of the scheme is that it must not lead to farmers being overcompensated for VAT incurred by them on business related expenses. According to the press release, a Revenue investigation in 2018 determined that there was a significant amount of overcompensation occurring in the poultry sector. After a further review over the last 18 months, it has been confirmed that this overcompensation is still occurring. The press release outlines that any queries can be directed to Revenue at the following email address; businesstaxesregistrations@revenue.ie.

Revenue has updated its guidance on Relevant Contracts Tax: Relevant Operations clarifying the treatment of RCT on contracts involving both the construction of property and the sale of land. The guidance also sets out how RCT applies to the deployment of a temporary installation on a site. The updated guidance states that where a contract includes both construction services and the supply of land, only the construction services’ element is subject to RCT. The construction services are also liable to VAT on a reverse charge basis. RCT and the VAT reverse charge do not apply to the consideration for the sale of the land. Where the contract provides for a single consideration covering both the construction services and the sale of the land, the consideration needs to be allocated proportionally by the principal.

Revenue has updated its guidance in Waiver of exemption: Transitional Measures following the High Court judgment in Killarney Consortium C v Revenue Commissioners [2024] IEHC 732. The guidance confirms that from 20 December 2024, any cancellation amount resulting from the cancellation of a waiver will not be collected by Revenue. Prior to the introduction of the new system for VAT on property (from 1 July 2008), leases were divided into short leases (those for a period of less than 10 years) and long leases (those for a period of 10 years or more). In general, short leases were exempt from VAT, but a landlord could waive this exemption. Although no new waivers could commence from 1 July 2008 onwards, pre-existing waivers remained valid for a property which had been acquired by the lessor before that date. Furthermore, if a waiver was subsequently cancelled, the legislation included a clawback mechanism requiring a repayment to Revenue of any input VAT claimed in excess of output VAT paid under the waiver. The waiver cancellation provisions were the focus of the Killarney Consortium case, whereby the consortium contended that EU VAT law does not impose a clawback solely because the level of input VAT deducted exceeds the output VAT paid. The High Court, in upholding the decision of the Tax Appeals Commission, held that the waiver cancellation in these circumstances was contrary to EU law and the principle of fiscal neutrality. The court affirmed that where a business is fully engaged in taxable supplies it is entitled to deduct input VAT on purchases made for the purposes of those taxable supplies.

Revenue has issued an eBrief confirming that revised REIT forms are now available on the Revenue website. REITs with accounting periods ending between 1 January 2025 and 31 December 2025 are required to file an annual statement (Form REIT 3) on or before 28 February 2026. Links to the revised Form REIT3 and the updated Forms REIT1, REIT2, REIT 2A are included in the eBrief.

Last week, the Economic and Social Research Institute (ESRI) published its Quarterly Economic Commentary. In the press release which accompanied the publication, the ESRI refers to the ongoing strength and expansion of the Irish economy but also highlights the downward revisions to global growth forecasts due to the uncertainty caused by the changing position on tariffs. Unemployment is expected to remain low at just over 4 percent across the forecast horizon with real wage growth of 3.5 percent forecasted in 2025 and 2.3 percent in 2026. The ESRI reported total tax revenues continue to perform well, however, corporate tax revenues are lower in the first five months of this year compared to January to May 2024. In an overall assessment, the ESRI highlighted three key concerns: the status on tariffs, the influence of windfall corporate revenues on the public finances and the number of housing completions. 

The latest UK tax tidbits features updated guidance in a wide range of areas. Employment intermediaries reporting requirements, Check if you're an employment intermediary, How to get an agent code for Corporation Tax or Self-Assessment, Agent authorisation: apply using HMRC paper forms, Updating your tax agent contact details with HMRC, Claim a refund of Construction Industry Scheme deductions if you're a limited company or an agent, Help with the Apprenticeship Levy and Employment Allowance — connected entities — GfC10, Check genuine HMRC contact that uses more than one communication method, Change in bonus rates for Save As You Earn (SAYE) share option schemes, Tell HMRC about a transferor or settlor who is domiciled outside of the UK (D31), Tell HMRC about a transferor or settlor who is not a long-term UK resident (D31a), Tell HMRC about a transferor or settlor who is a long-term UK resident, when transitional provisions apply (D31b), Check employment status if you work in hair and beauty, Find software suppliers for the Construction Industry Scheme (CIS), Your responsibilities under money laundering supervision, Check genuine HMRC contact that uses more than one communication method, Extra Support Team, Compliance checks: The Human Rights Act and penalties — CC/FS9, CC/FS72 DSC1 Corresponding with HMRC by email, Check if an email you've received from HMRC is genuine, Named tax avoidance schemes, promoters, enablers and suppliers, Issue briefing: Loan charge letters, Help with charitable giving on your Self-Assessment tax return, List of approved professional organisations and learned societies (List 3), Payroll Giving agencies approved by HMRC, Air Passenger Duty and connected flights, Gilt-edged securities exempt from Capital Gains Tax, Check the status of tax policy consultations, Check if a business is registered for money laundering supervision, Appeals reviews and tribunals guidance, Alternative Dispute Resolution Guidance, Named tax avoidance schemes, promoters, enablers and suppliers, Check if a business is registered for money laundering supervision, Make a subject access request to HMRC, Inheritance Tax: return of estate information (C5 (OUK) (2006)), Set up a limited company: step by step, Warning for agency workers and contractors who are moved between umbrella companies (Spotlight 71), Tell HMRC about the end of a qualifying interest in possession (IHT100b), and Report Climate Change Levy subsidies to HMRC.  

Revenue has recently updated three other Tax and Duty Manuals. The updated manuals relate to the taxation of children’s pensions; the taxation of short term and occupational illness benefits and guidance on permanent health benefit schemes. Details are set out below. The guidance on the taxation of children’s pensions payable under pension schemes has been updated to confirm that any additional Jobseeker’s benefit (self-employed) or Jobseeker’s pay related benefit amounts received for dependent children are not assessable on the parent or guardian. The updated guidance on the taxation of Short-Term Illness Benefit and Occupational Injury Benefit confirms that the Department of Social Protection provides relevant claim details to Revenue allowing them to update an employee’s tax credits and rate band. The guidance on the relief for contributions to Permanent Health Benefit schemes and the taxation of benefits received has been updated to provide additional details on claiming the relief. The contact details for the relevant branch within Revenue dealing with these schemes are also included in the manual.