The Department of Finance and the Department of Public Expenditure and Reform have published the Fiscal Monitor for June 2025 confirming an Exchequer surplus of €4.5 billion to the end of June. This compares to a surplus of €3.1 billion recorded for the same period last year. Tax receipts collected to the end of June were €49.5 billion, which was €4.7 billion higher than the same period in 2024. Excluding the once off receipts from the Court of Justice of the European Union (CJEU) judgement in the Apple State Aid case, total receipts amounted to €47.7 billion, an increase of €3 billion on the corresponding period in 2024. Income tax receipts for the month of June were €2.9 billion which was €0.1 billion ahead of receipts collected in June 2024. On a year-to-date basis, receipts to the end of June of €17.4 billion were up by €0.7 billion (4.3 per cent), when compared to end of June 2024. June is considered a significant month for corporation tax payments and receipts of €7.4 billion were collected last month which was an increase of €1.5 billion compared to June 2024.  On a cumulative basis, receipts of €14.8 billion represented an increase of €2.6 billion on the same period last year. When the once-off CJEU receipts are excluded, cumulative corporation tax receipts to June 2025 amounted to €13.1 billion, up on the same period last year by €0.9 billion. VAT receipts collected in the month of €0.2 billion reflecting the fact that June is a non-VAT due month. Cumulative receipts of €11.6 billion were ahead by 5.8 percent on end of June last year. Commenting on the figures, Minister for Finance, Paschal Donohoe said: “June is a key month for tax receipts. The steady performance across most revenue streams in the first half of the year is a positive sign of the strength of our economy as we navigate a deeply uncertain period. Corporation tax receipts in June have seen a sharp increase, which follows a sharp decline last month. This serves as a reminder of the extreme volatility in this revenue stream, and of its inherent unsuitability as a basis for permanent spending commitments” Commenting on the figures, Minister for Public Expenditure, Infrastructure, Public Service Reform and Digitalisation, Jack Chambers said: “Tax revenues are strong. As we prepare for Budget 2026, we need to carefully manage expenditure in the second half of the year, while continuing to commit the necessary resources to improve our public services, support our people and enhance quality of life across our country.”

The regulatory difficulties facing frontier workers in Ireland are having an increasing impact on the all-island labour market. The lack of clarity and indeed fundamental barriers to employment are significantly impeding the mobility of cross-border workers. Last Thursday, the Institute’s Head of Public Policy, Stephen Lowry raised the issue directly with the UK’s Minister of State for Europe and North America Stephen Doughty MP at a meeting hosted by the British Irish Chamber of Commerce. Minister Doughty agreed to personally bring these issues to the attention of his colleagues in HM Treasury. Earlier in the week, the Institute’s Head of Tax, Gearóid O’Sullivan attended a meeting convened by InterTradeIreland with Minister Peter Burke, Department of Enterprise, Tourism and Employment, and Minister Caoimhe Archibald, Department for the Economy NI. The Institute is working with InterTradeIreland to address issues relating to the mobility of workers. Last year, the Institute formed a working group to discuss the complexity of cross-border employment arrangements across the island. We informed the Ministers that the Institute’s working group will be writing to them later in the summer with our initial recommendations. Both Ministers noted that they welcome the insights from the group.

Last month we highlighted the key aspects of how the 2025 Spending Review will specifically impact on HMRC. Overall, the Spending Review announced an additional settlement for HMRC of £0.5 billion in 2026/27 which will be used to “make HMRC a digital-first organisation”. The Department was also set two ambitious targets related to this; that by 2029/30, 90 percent of taxpayer interactions will be digital self-serve and HMRC will have reduced the number of letters it sends by 75 percent. The Institute recently met with HMRC to discuss this.    In the meeting we highlighted to HMRC how ambitious these targets are and expressed concern about the impact on current service levels as HMRC seeks to achieve these targets. The transition to a digital-first organisation must not result in a deterioration of service levels and HMRC will need to communicate clearly how it will deal with incoming post as it moves to becoming digital first.     We also asked when HMRC expects to publish both its digital roadmap and its broader transformation roadmap which will be critical elements in seeking to achieve these targets. HMRC noted that these are expected to be published over the summer and both will set out in more detail how HMRC intends to achieve the targets set by government. The Institute will continue to discuss this and service levels with HMRC; we welcome your feedback at any time on this by email to tax@charteredaccountants.ie.     The House of Lords Treasury Committee is currently conducting an inquiry into the Spending Review and continues to take oral evidence from experts.  

The Institute is pleased to advise that HMRC will be delivering a webinar for our members on Tuesday 16 September 2025 on Making Tax Digital for income tax. The webinar will cover key technical points and readiness tips ahead of the first phase of mandation from April 2026 for sole traders and landlords with gross income above £50,000. There will also be an opportunity to ask questions. More details, including a booking link, will be available in the coming weeks.  

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.