The Minister for Social Protection, Heather Humphreys TD, has announced that the pensions auto-enrolment scheme will begin on 30 September 2025. The Institute supports the introduction of auto-enrolment but remains concerned with its impact on small businesses.  In last week’s Budget, it was announced that Finance Bill 2024 will provide for the taxation of the Automatic Enrolment Retirement Savings Scheme (referred to as AE). According to the Budget publications, the tax treatment “aligns as much as possible with that of Personal Retirement Savings Accounts (PRSAs), other than for employee contributions.” Employer contributions will be tax relieved, the growth in the AE funds will be exempt from tax and the AE funds will be taxed on draw down, other than the 25 percent tax free lump sum. The lump sum will be able to be taken tax free up to €200,000, will be taxed at 20 percent between €200,000 and €500,000 and taxed at 40 percent above €500,000. As the State will be making a direct contribution for employees within the AE scheme, no tax relief will be provided for employee contributions to AE.    

The Parliamentary Budget Office (PBO) has published its Preliminary Review of Budget 2025. This publication provides a summary review of Budget 2025, including a distributional analysis of budgetary measures, summaries of key spending and tax measures, key economic considerations and other issues.  A Pre-Budget 2025 Ready Reckoner is also available which illustrates the estimated annual cost of various tax and welfare options. In addition, the PBO has produced a new summary interactive data visualisation on spending issues which can be found here (please note this link leads to an external website, not the PBO webpage). This will allow you to explore the projected gross voted expenditure for 2025.  And finally, the Parliamentary Budget Office has also published an information note on inheritance tax which provides an overview of Inheritance Tax in Ireland, in light of the current discussion and commentary on the matter.   

Revenue has published its Budget 2025 summary, detailing key measures in this year’s budget, together with its Pre-Budget 2025 Ready Reckoner which illustrates the estimated annual cost of various tax and welfare options.

After Budget 2025 took place last week, the team at Chartered Accountants Ireland have been busy analysing the key measures and providing analysis and commentary in the media: Our full summary of all the key measures announced as part of the Budget package is available on the Institute's dedicated Budget 2025 landing page, Read our press release reacting to the Budget announcement, The Institute’s Director of Advocacy and Voice, Cróna Clohisey, appeared on a number of radio stations covering the Budget including RTÉ Radio 1’s News at One, the Nine till Noon Show on Highland Radio (from 14:55 into show podcast) and C103’s Cork Today show with Patricia Messenger (from 52:50 into show podcast), and Listen to our additional Budget coverage in the special Budget 2025 episode of the Accountancy Ireland podcast. Further commentary and analysis will also feature in this month’s edition of Accountancy Ireland.

The OECD/G20 Inclusive Framework on BEPS (Inclusive Framework) has published a Model Competent Authority Agreement to facilitate the implementation of its political commitment on Amount B of Pillar One. This practical tool is designed to be particularly beneficial for jurisdictions with limited resources and data availability.

On 2 October, the EU and Norway signed an agreement to amend their existing cooperation agreement on aspects of administrative cooperation, the fight against fraud and assistance on recovery of claims in the field of VAT. The new agreement will provide the partners with new cooperation tools.

In this week’s EU exit corner, we bring you the latest guidance updates and publications relevant to EU exit. 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. The annual joint meeting of the UK and EU’s Domestic Advisory Group (DAG) took place recently after which a joint statement was issued. Chartered Accountants Ireland is a member of the UK DAG. And finally, a joint statement was issued last week after the President of the European Commission and the UK Prime Minister met. Joint UK/EU statement on enhancing strategic cooperation The President of the European Commission and the Prime Minister of the United Kingdom met last week and agreed to strengthen the relationship between the United Kingdom and the European Union. They agreed on the shared challenges facing the European Union and the United Kingdom including the altered strategic context for the wider continent notably resulting from Russia’s illegal invasion of Ukraine. Prime Minister Keir Starmer and President of the European Commission Ursula von der Leyen released a joint statement after the meeting during which it was agreed agreed the UK and European Union would also continue to work closely to address wider global challenges including economic headwinds, geopolitical competition, irregular migration, climate change and energy prices, all of which pose fundamental challenges to the shared values of the United Kingdom and the European Union and provide the strategic driver for stronger cooperation. They also reaffirmed that the Withdrawal Agreement, including the Windsor Framework, and the Trade and Cooperation Agreement underpin relations between them and underlined their mutual commitment to the full and faithful implementation of those agreements. Both parties also agreed on the importance of holding regular EU-UK Summits at leader level to oversee the development of this enhanced relationship with the first summit to take place in early 2025 ideally. Miscellaneous guidance updates and publications Trade Specialised Committee on Administrative Co-operation in VAT and Recovery of Taxes and Duties, Report a problem using the Customs Declaration Service, Designated export place (DEP) codes for Data Element 5/23 of the Customs Declaration Service, Check if a business holds Authorised Economic Operator status, Attending an inland border facility, Data Element 2/3 Documents and Other Reference Codes (National) of the Customs Declaration Service (CDS), Trading and moving goods in and out of Northern Ireland, Moving Rest of World sheepmeat, poultry and beef to Northern Ireland, and Method of payment (MOP) codes for Data Element 4/8 of the Customs Declaration Service.

In this week’s miscellaneous updates, we bring you the news that the Chief Executive of HMRC has announced that he is retiring next year. The latest Administrative Burdens Advisory Board report has been published the headlines from which are that many agents/businesses do not believe that there will be any benefits from Making Tax Digital for income tax (MTD ITSA). Frustration with HMRC’s poor service levels also continues to grow. Regulations have been published on the information requirements for the new research and development (R&D) tax relief regimes and HMRC has published guidance/forms for certain overseas companies to register for corporation tax. The latest schedule of HMRC live and recorded webinars for tax agents is also available for booking. Spaces are limited, so take a look now and save your place. And finally, check HMRC’s online services availability page for details of planned downtime and the online services affected. HMRC Chief Executive to retire Sir Jim Harra, Chief Executive of HMRC, is to retire in April 2025. Mr Harra, who is originally from Northern Ireland, announced his retirement last week in a LinkedIn post saying ‘I am due to complete my tenure as first permanent secretary/chief executive in the spring, when I will be retiring from HMRC and the Civil Service. ‘The recruitment exercise to find my successor is now under way. If you have the right skills and experience, please consider applying – it’s a fascinating and rewarding role with national impact, for candidates of the right calibre.’ Mr Harra has been Chief Executive and first Permanent Secretary of HMRC since 2019. 2023/24 Administrative Burdens Advisory Board report The Administrative Burdens Advisory Board (ABAB) recently conducted its annual survey in its role to survey the needs of small businesses in the context of the UK tax system. The ABAB was established in 2006 to provide valuable business insight and expertise to HMRC, acting as a ‘critical friend’ on issues relating to regulation and administration of tax for small businesses. The ABAB also challenges HMRC on performance, providing robust, independent scrutiny against key initiatives that affect small businesses. This year a record number of over 10,000 responses were received to the survey, comprising 84 percent from businesses and 16 percent from agents.  The outcome of the survey has been published in the Tell ABAB report for 2023 to 2024 the key findings are as follows: Just over 33 percent of respondents described themselves as being aware or very aware of MTD ITSA, suggesting that awareness appears to be low, though it should be noted that of the businesses who responded to the survey, this may include companies and partnerships who will not be directly impacted by MTD ITSA, 64.6 percent of respondents said that MTD ITSA would have no benefits with 63.1 percent saying that the digital record keeping requirement will increase costs, and The survey responses suggest an ongoing and growing sense of frustration when engaging with HMRC with 56.7 percent of respondents rating HMRC’s webchat and telephony services as poor, up from 39.8 percent in 2022/23. When asked about their experience of dealing with HMRC in the last 12 months, 42.2 percent of respondents said it was worse, compared with 33.6 percent in 2022/23. The outcome of the survey has been shared with the Exchequer Secretary to the Treasury (XST) and it is expected that in December 2024, the ABAB will submit its annual report to the XST which will review HMRC’s progress and performance against the priorities set in the ABAB’s 2022/23 report.    Regulations published on merged R&D expenditure credit information requirements For accounting periods commencing on or after 1 April 2024, the UK’s R&D tax relief regime was majorly reformed when the merged R&D expenditure credit (RDEC) and the enhanced R&D intensive support (ERIS) regimes were introduced. As a result, the information requirements for the merged RDEC and the ERIS regimes have changed hence The Research and Development Relief (Information Requirements etc.) Regulations 2024 have now been published to implement these changes. Broadly, the information requirements under the legislation, which set out the content of the Additional Information Form, are consistent with the requirements prior to 1 April 2024. However, the regulations now provide a statutory footing for claimants to disclose expenditure claimed in relation to the qualifying element of contracted out R&D expenditure. In addition, if expenditure is incurred in relation to Externally Provided Workers and contracted out R&D, the regulations now include a requirement to disclose further information if the relevant activity was undertaken outside of the United Kingdom. This is by virtue of the general exclusion of overseas R&D activity which is subject to certain exceptions. Additional disclosure requirements also arise in relation to companies with a registered office in Northern Ireland. The new requirements took effect from 2 October 2024. HMRC guidance/forms for overseas companies to register for corporation tax Last month, the HMRC guidance page ‘Corporation Tax for non-UK incorporated companies’ was updated in respect of the corporation tax registration process for overseas companies that are not able to use the joint registration process via Companies House. As set out in the guidance, although various categories of non-UK tax resident company can be within the scope of UK corporation tax, these do not always come within the rules that require such companies to register with Companies House. The updated guidance page therefore clarifies the process required for such companies and provides links to further new guidance and online forms.

HMRC has published further draft guidance on the multinational top-up tax and domestic top-up tax. This release includes all previously released pages (including updates in some cases) in addition to newly drafted pages. For further information, including an overview of which pages are new or significantly revised, see the introduction in the document. HMRC invites comments from stakeholders on this draft guidance. Please email responses to the inbox: pillar2.consultation@hmrc.gov.uk. Include the page reference number in responses where applicable. Publication of the manual will begin following the review of consultation responses. A supplementary release of draft guidance will follow in due course. This will include remaining draft guidance on flow-through entities, joint ventures, the insurance sector, additional top-up amounts, and the undertaxed profits rule. A final release of draft guidance is expected by December, which will include an updated map of the OECD documents as they relate to UK legislation. HMRC will begin to publish finalised pages as an HMRC manual prior to that.  

Based on feedback from various agent representative bodies, including the Professional Bodies, HMRC is making changes to the services it provides for agents with Self-Assessment (SA) and PAYE queries via the Agent Dedicate Line (ADL) and the introduction of a new webchat service. These changes, which take effect from today Monday 7‌‌‌ ‌‌October 2024, aim to provide better support to agents. More detailed information is available in an email from HMRC but broadly, the changes mean that agents will be able to call the ADL for queries relating to both SA and PAYE as HMRC recognise the need for a combined resource.  In addition, a new webchat service solely for agents, covering both SA and PAYE (but not PAYE repayment claims) is now available on GOV.UK. Agents can discuss up to a maximum of 5 taxpayers on an ADL call or webchat and when calling the ADL are now presented with a new telephony option for progress-chasing SA repayments (the route for PAYE repayments is unchanged). More information is available at the following links: Agent Dedicated Line: Self-Assessment or PAYE for individuals, and Dedicated helplines and contacts for tax agents. Chartered Accountants Ireland will be monitoring the impact of these changes as it has long been recommending to government that enhanced services for agents need to be provided.

In Irish news, Finance Bill 2024, which implements the tax changes announced on Budget day, was published yesterday. We will provide our analysis in Tax News on Monday. In the UK, HMRC has changed the services it provides to agents calling the Agent Dedicated Line and further draft guidance on the Pillar Two multinational top-up and domestic top-up taxes has been published for comment. In International news, the EU and Norway have signed an agreement to strengthen administrative cooperation, combating fraud and recovery of claims for VAT purposes.  Ireland 1. The Department of Finance have published Finance Bill 2024. 2. The guidance on agricultural relief has been refreshed. UK 3. The Chancellor and Prime Minister’s recent Labour Party Conference speeches provided a further update on the new Government’s tax policies. 4. There’s still time for companies to participate in our campaign to reduce the rate of corporation tax in Northern Ireland. International 5. The signing ceremony for the OECD’s Pillar Two rules took place recently. 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 EU exit corner.          

In addition to the targeted VAT supports announced under the banner of cost of living and supporting climate action, the VAT registration thresholds will also increase for a second year in a row. The flat rate compensation for farmers who are not registered or required to register for VAT will also increase.  VAT registration thresholds   From 1 January 2025, the VAT registration thresholds will increase from €40,000 for services to €42,500, and from €80,000 to €85,000 for goods. The increases aim to ensure that small businesses remain below these thresholds and do not have to register. The full year cost of the increases is estimated to be €15 million.  Farmer’s flat rate compensation  The flat rate compensation for farmers will increase from 4.8 percent to 5.1 percent from 1 January 2025.  The flat-rate compensation scheme is a special scheme for farmers who are not registered, or required to register, for VAT. The scheme is designed to compensate flat-rate farmers for the VAT they incur on farming costs without having to register for VAT.