The EU Commission has decided to refer Germany to the Court of Justice of the European Union for failure to eliminate the discriminatory tax treatment of reinvested capital gains on the sale of German real estate. 

The OECD has published its Tax Administration 2024 report which is intended to be used by tax administration analysts to understand the design and administration of tax systems in other jurisdictions and to draw cross-border comparisons. The 2024 edition includes performance-related data, ratios, and trends up to the end of the 2022 fiscal year.  

The OECD Secretary-General Tax Report to G20 Leaders has been published. This report sets out recent developments in international tax reform, including the Two-Pillar Solution. It also covers progress made on the implementation of the BEPS minimum standards and tax transparency, as well as updates on tax policy, tax and inequality, and tax administration. 

From 1 January 2025, the special VAT regime (the SME scheme) will go live, allowing certain small enterprises to sell goods and services without charging VAT to their customers (in effect a VAT exemption) thereby alleviating their VAT compliance obligations.  Any small enterprise with a total annual turnover of no more than €100,000 (or the equivalent in its national currency) in all Member States, for the current and previous calendar year, is eligible for VAT exemption in its Member State of establishment and/or in other Member State(s) under the cross-border SME scheme.  

Revenue has updated the Tax and Duty Manual which provides guidance regarding the adjustment of VAT deductible due to unpaid consideration by deleting content that has become obsolete following the introduction of section 62A VATCA 2010.   

Revenue has updated the Stamp Duty Manual which provides guidance on the exemption for reconstructions or amalgamations of companies under section 80 SDCA 1999. The manual has been amended in section 8 to clarify the circumstances in which relief under section 80 SDCA 1999 will be withdrawn. 

Certain intermediary financing companies, known as Qualifying Financing Companies (QFCs), are permitted to obtain a deduction for interest paid on certain external/third party loans under section 76E TCA 1997. Revenue has published a new Tax and Duty Manual to provide guidance on the deductibility of interest by QFCs . 

Revenue has updated the Tax and Duty Manual which provides guidelines for registration for income tax, corporation tax, relevant contracts tax, employers’ PAYE and certain other taxheads.   The amendments are:  Inclusion of information regarding Statement of Particulars (Section 2.2.), An outline of Defective Concrete Products Levy (Section 7.6), An outline of Stamp Duty Insurance Levy (Section 7.7), and An outline of Non-Resident Landlord Withholding Tax (Section 7.8).

Revenue has updated the Tax and Duty Manual which outlines the importance of context and wording when interpreting the words “control” and “interest” as they relate to companies.   The updated manual now includes a summary of the definition of “control” in section 11 TCA 1997 and provides additional detail regarding the definition of “control” in section 432 TCA 1997. Examples of various TCA provisions that apply the definitions of “control” from sections 11 and 432 TCA are also listed. 

Last week the Institute met with HMRC to discuss the 2024 Autumn Budget. We expressed concern and shared our views on the impact of a range of changes including increased employment costs as a result of the National Minimum Wage and employer National Insurance Contribution changes from April 2025. We also highlighted the damaging impact that the 2026 changes to key inheritance tax reliefs (agricultural property relief and business property relief) will have, particularly for Northern Ireland family-owned businesses and farms. The Institute recommended to HMRC that the Government consult more widely on these particular changes and we highligted the need for any anti-forestalling legislation to be fair. These changes should not impact retrospectively on lifetime gifts already made in the seven years prior to 6 April 2026. The changes need to be properly considered before implementation given the impact they will have on both indigenous businesses and investors in the UK. Other issues discussed were the fuel duty dilemma, tax simplification, the taxation of electric vehicles, the practical impact of the in-year capital gains tax rate changes, the extension in this Parliament of Making Tax Digital for income tax to the £20,000 - £30,000 turnover population and regulation of the UK tax agent market.  

At the Autumn Budget 2024, the Chancellor of the Exchequer confirmed that from 1 January 2025, all education, boarding, and vocational training provided for a charge by a private school in the UK will be subject to VAT at the standard rate of 20 per cent. Any fees paid from 29 July 2024 relating to the term starting in January 2025 and onwards will also be subject to VAT under anti-forestalling legislation.  HMRC has also sent a further email on this. The Government also published a response to its recent technical consultation. A Tax Information and Impacts note and the final draft legislation are also available on the same page. For schools that may be affected by these changes, HMRC has published the following additional material: Check when you need to register for VAT: schools can do this using a new interactive tool. Just click the green ‘Check now’ button, In order to use the online VAT registration system, schools will be asked for their Unique Taxpayer Reference (UTR). This can be found on any previous tax returns and other documents from HMRC, and HMRC has also updated guidance to reflect final policy design, including clarifications on nurseries, further education providers, and non-maintained special schools. In the event of any technical queries about registering for, charging, and remitting VAT, HMRC can be contacted by schools, their representative bodies, and tax advisors via the following email address: vatonprivateschoolfees@hmrc.gov.uk.   

In this week’s miscellaneous updates, the latest Agent Update is available as is the current schedule of HMRC Talking Points live and recorded webinars for tax agents which are available for booking. Spaces are limited, so take a look now and save your place. HMRC has published a new tax agent handbook and legislation impacting the abolition of the pension’s lifetime allowance has been laid. To assist alcohol producers in their preparations for the new digital service which is expected to launch in March 2025, HMRC has sent an email with more information and details of upcoming webinars. With less than 100 days to the 2023/24 self-assessment filing deadline, HMRC has sent a general email reminder and a more tailored email to agents. The rate of interest on late payments of tax has been reduced to 7.25 percent from today and claims for relief from certain employment expenses can now be made online. And finally, check HMRC’s online services availability page for details of planned downtime and the online services affected. Latest Agent Update Agent Update: issue 124 is available now. Get the latest guidance and information including: changes to the Agent Dedicated Line, updates to the Trust Registration Service guidance, less than 6 months left to fill in national insurance gaps to 2006, evidence required to claim PAYE (P87) employment expenses, and help protect workers from getting caught out by tax avoidance. New tax agent handbook HMRC has launched a new Tax Agent handbook which aims to provide information to help tax agents and advisers find guidance, use HMRC's services and contact HMRC. This is an outcome from a redesign of existing tax agent guidance. HMRC will continue to develop this further. Feedback on the new handbook and suggestions for it can be made using the short survey at the top of the main landing page. Pension’s lifetime allowance abolition Legislation was included in Finance (No.2) Act 2023 and Finance Act 2024 to abolish the pension’s lifetime allowance. Regulations have now been laid to implement “technical and consequential changes necessary to ensure the correct operation of the pensions tax regime following the abolition of the lifetime allowance”. Employment expenses tax relief process for uniforms, work clothing and tools Last month HMRC announced that claims for tax relief for employment expenses had to be made by post using form P87 and should be accompanied by supporting evidence. HMRC has now confirmed that claims can now be made online for flat rate expenses for uniforms, work clothing and tools.