This week, in Irish stories, Revenue updates its guidance on the VAT treatment of medical services. In UK developments, the expenses, benefits, and share schemes filing deadline of 6 July 2020 approaches. In International news, the European Parliament has created a new tax subcommittee      Ireland Revenue updated its guide on the VAT treatment of medical services. No reference is made in the guide to a recent TAC determination on medical locums. Our June 2020 issue of tax.point is out now UK The expenses, benefits and share schemes filing deadline of 6 July 2020 approaches The guidance for the coronavirus job retention scheme has again been updated   International European Parliament creates new tax subcommittee. Read more  

Revenue recently updated the tax and duty manual on the VAT treatment of charitable donations via SMS, to reflect the rules on multipurpose vouchers.   The VAT treatment of charitable donations made via SMS depends on whether the telecommunications provider charges a fee for facilitating the transaction.  Where the telecommunications provider charges a fee to facilitate the donation, the fee is liable to VAT at the standard rate and monies transferred to the charity net of the fee are outside the scope of VAT. Further details on the VAT treatment of such donations and the conditions to be met by the charitable organisation to receive the full amount of the donation without a VAT deduction are included in section 3 of the Revenue manual for the VAT treatment of charitable donations via SMS.   The manual has also been updated to improve readability. 

Revenue have amended their tax and duty manual on Third Party Returns: Requirement to Report Information Automatically.   Updated procedures for completing the:  Form 8-2 (Persons in receipt on Income on behalf of others),  Form 8-3 (Letting agents and property managers), and  Form 21R (Nominee shareholders)  have been included in the amended tax and duty manual on Third Party Returns. New requirements in the Form 8-3 to report the tax reference number of a property owner and the Local Property Tax ID number of the let property come into effect in 2021.  

Revenue issued two new tax and duty manuals on betting and gaming.  The new manual on the VAT treatment of Betting, Remote Betting Services and Lotteries is to be read in conjunction with paragraph 10 of Schedule 1 of the VAT Consolidation Act, 2010.   The new manual on the VAT treatment of gaming, gaming machines and amusement machines is to be read in conjunction with section 46(a) and paragraph 8(3)(c) and (d) of Schedule 3 to the VAT Consolidation Act, 2010.  

The deadline for the filing of DAC2/CRS and FATCA returns for the 2019 reporting period has been deferred until 30 September 2020. Revenue confirmed the deadline for DAC6 returns will also be deferred.   Further information is available in Revenue eBrief No. 115/20.

Do you complete expenses and benefits returns? Or do you complete online filing for employment related securities? If so, you have an important role to play in ensuring returns are submitted and payments made on time. There is no change to these deadlines due to the pandemic; HMRC is encouraging filing and payment on time where possible. However, see our news story on the acceptance of the pandemic as a reasonable excuse for late filing and payment.  Here’s a reminder of the forthcoming deadlines:   6 July 2020 - deadline for submitting all 2019/20 P11D(b) and P11D forms - and the employee must receive their copy of the P11D. (HMRC’s Expenses and Benefits from Employment toolkit can help with this;  6 July 2020 – deadline for online reporting of 2019/20 annual return in respect of employment related securities;  19 July 2020 - deadline for non-electronic payment of Class 1A National Insurance (NIC) for 2019/20;  22 July 2020 - deadline for electronic payment of Class 1A NIC for 2019/20.  To save on administration, don’t forget to consider PAYE Settlement Agreements, where relevant.   HMRC has also published online versions of form P11D(b). The purpose of form P11D(b) is to report Class 1A NIC on expenses and benefits-in-kind and to declare that forms P11D have been submitted to HMRC. Employers who payroll all benefits-in-kind and so do not need to submit forms P11D must nevertheless submit form P11D(b) to report their Class 1A NIC liability to HMRC.   6 July is also the reporting deadline for share schemes. HMRC has recently published new guidance on the impact of the pandemic on share schemes in the latest Employment Related Securities Bulletin. 

Medical locum services and certain services provided by a pharmacist have been included in Revenue’s updated guidance in the tax and duty manual VAT treatment of medical services.   The manual on the VAT treatment of medical services has been updated to include:  Services supplied by a pharmacist are generally taxable, but certain qualifying medical services authorised by a pharmacist qualify for the exemption for medical services. For further details, see section 9 of the manual.  Professional counselling and psychotherapists services, provided by persons registered with the Counsellors and Psychotherapists Registration Board are exempt from VAT.   Medical locum services – A locum doctor supplying their service to a medical practice cannot avail of the medical services exemption, as they are supplies of staff, which are subject to the standard rate of VAT.   A recent Tax Appeal Commissioners determination considered the medical services exemption and based on the particular circumstances of the case, found in favour of the taxpayer. The Tax Appeal Commissioners determination is in the process of appeal to the High Court.  

The USA has withdrawn from the international talks on taxing the digital economy, led by the OECD. This follows the earlier announcement that the United States will conduct investigations into digital services taxes introduced or are being considered by a number of countries, including Austria, Brazil, the Czech Republic, India, Indonesia, Italy, Spain, Turkey, the UK along with the EU.   According to reports, when asked about the decision, The US Trade Representative, Robert Lighthizer said “We have a situation where a variety of countries have decided that the easiest way to raise revenue is to tax somebody else’s companies and they happen to be ours,” and “The United States will not let that happen”. He also said that “The answer is that we need an international regime that not only focuses on certain size and certain industries but where we generally agree as to how we’re going to tax people internationally,” he said. “So I think there is clearly room for a negotiated settlement.”  In response to the US decision, The OECD Secretary-General Angel Gurría said “All members of the Inclusive Framework should remain engaged in the negotiation towards the goal of reaching a global solution by year end, drawing on all the technical work that has been done during the last three years, including throughout the COVID-19 crisis. Absent a multilateral solution, more countries will take unilateral measures and those that have them already may no longer continue to hold them back. This, in turn, would trigger tax disputes and, inevitably, heightened trade tensions. A trade war, especially at this point in time, where the world economy is going through a historical downturn, would hurt the economy, jobs and confidence even further.”  The OECD has confirmed it will maintain its schedule of meetings to offer all members of the Inclusive Framework a place in the design of a multilateral approach. 

HMRC has sent the below message that confirms the pandemic can be used as a reasonable excuse by anyone filing their returns or paying their tax late. The relevant penalties will be cancelled, provided the taxpayer files, or pays as soon as they are able to. The deadline for appeals has also been extended to 3 months, if required by a taxpayer. Read the full message from HMRC.   “It is important that the tax system continues to function so it can fund vital public services such as the NHS. Customers should continue to pay and file on time, and we are grateful for those individuals and businesses that are able to do this. However, HMRC understands that some individuals and businesses will find it difficult to meet deadlines. For example, they may not have access to their business premises or be able to provide the necessary paperwork.  We will now accept the impacts of COVID-19 as ‘reasonable excuse’ for people who are late filing their returns or paying their tax and the relevant penalties will be cancelled, provided the customer has managed to file or pay as soon as they were able to.  Customers normally have 30 days to appeal, or ask us for a review, but we know it may not currently be possible for businesses to do this, which is why we are giving people an additional 3 months to do this if they need to. You can read more about this on GOV.UK   If an individual cannot pay their tax because of COVID-19, we may be able to agree ‘time to pay’ arrangements with them. We agree these on a case-by-case basis and tailor them to meet people’s individual circumstances. We’ve set up a dedicated helpline for dealing with time to pay arrangements. If you or your clients need help or want to talk about available options, please phone us on 0800 024 1222.”   

In the June issue of tax. point, Bríd Heffernan looks at some of the tax measures introduced to support businesses and individuals navigating the Covid-19 crisis. Mark Lonergan discusses how European law could be used to support a taxpayer’s right to a refund.  Regular tax updates in Ireland, the UK and internationally as well as Brexit and Public Policy developments, also feature.    We expect that subscribers to tax.point will receive their June issue by post. The June issue is now available on TaxSource Total. 

The European Parliament has created a permanent subcommittee to deal with tax fraud, tax evasion and tax avoidance as well as financial transparency for taxation purposes. The European Commission supports the decision to create the new subcommittee. For more information read the Parliament’s Proposal for a Decision.  

Earlier this month, HMRC published a questionnaire to enable businesses to tell them that they will be impacted by Northern Ireland goods movements post Brexit. We encourage you to ask your clients to complete the questionnaire. HMRC has also published details of new measures to support customs intermediaries.  This follows the UK government’s announcement that the transition period will end as planned on 31 December 2020, however controls for importing goods will not apply until July 2021. Overall, border controls for EU goods imported into the UK will be introduced from 1 January 2021 in stages to give businesses affected by coronavirus more time to prepare.  HMRC has also unveiled a new package of measures to accelerate growth of the UK’s customs intermediary sector. An additional £50 million is being provided to support businesses with recruitment, training and supplying IT equipment to handle customs declarations. The Government also intends to remove barriers for intermediaries taking on extra clients by adapting the rules around financial liability. Applications for the new funding will be open from July and HMRC will unveil more details in due course.