Revenue has published updated capital acquisitions tax (CAT) guidance on Business Relief to reflect the Finance Act 2025 amendments to sections 100 and 101 of the Capital Acquisitions Tax Consolidation Act 2003. New examples have been included in the guidance to reflect the relevant amendments.

Readers may recall that when the old Advance Corporation Tax (ACT) regime was abolished in 1999, this necessitated regulations to ensure that any unrelieved surplus ACT balances carried forward by companies could still be accessed via the ‘shadow ACT’ rules. Regulations have now been laid before Parliament to amend these rules. The former ‘shadow ACT’ rules involved a notional calculation of ACT paid on distributions made after 5 April 1999. The Government says that these rules have served their purpose. However, in recognition that some companies still have significant balances of unrelieved surplus ACT, the current regulations, which cancel all remaining shadow ACT balances, also allow companies to speed up utilisation of their remaining unrelieved surplus ACT balances.

Revenue has updated its guidance on tax relief available for qualifying health expenses to provide further clarifications, including information relating to the Common Conditions Service. The examples in the guidance have also been refreshed to reflect the increased standard rate bands and tax credits for 2025. The relevant updated sections are as follows: Paragraphs 2.2 and 3.2 have been updated to advise that, as a Revenue Administrative practice, tax relief will be available on charges incurred on the Common Conditions Service (CCS) pending the introduction of legislation formalising the position. Further details regarding this can be found in our earlier newsletter item. Clarification is provided in paragraphs 3.4 and 3.7 that an entitlement to tax relief on running costs associated which medical equipment or travel and accommodation costs, necessarily incurred in the provision of healthcare may apply as determined on the full facts and circumstances of the individual’s case. In this regard tax relief for such expenditure is not limited to those health conditions for which a flat rate amount is available as set out in paragraph 3.7.3. Paragraph 7 has been updated to outline how claims may be verified to ensure expenses incurred are in relation to 'healthcare' within the meaning of section 469 TCA 1997. Paragraphs 9.6, 11 and appendix 1 have also been updated in this regard. Paragraphs 9.3 and 9.4 have been updated to clarify that an individual may be eligible to claim tax relief on the maintenance costs referrable to the keeping and use of a trained dog. Although a flat rate is available in respect of such expenditure, tax relief is not limited to the flat rate referred to in the respective paragraphs. Paragraph 9.5 has been updated to provide clarity on tax relief available in respect of in vitro fertilisation (IVF) and other forms of assisted human reproduction (AHR).   A decision tree has been added to aid taxpayers in determining if the medical expenses an individual incurs qualify for tax relief under section 469 TCA 1997.

In this week’s detailed miscellaneous updates which you can read more about below, HMRC has advised us that from April 2026 employment expenses and gift aid will be removed from the tax codes of some taxpayers if HMRC’s data shows that they are unlikely to be accurate or relevant. In other news this week: In a recent Agent Update, HMRC has published tips for making a valid claim for overpayment relief, The Tax Law Review Committee of the Institute of Fiscal Studies has published Tax and disability in the UK: review of trusts and other savings options which examines the existing disability trust regime in the UK for putting aside savings in respect of eligible disabled people, The latest schedule of HMRC Talking Points live and recorded webinars for tax agents are 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. Removal of employment expenses and gift aid from tax codes From April 2026, HMRC has begun to remove employment expenses and gift aid from the tax codes of some taxpayers if HMRC data indicates that including these in the taxpayer’s tax code is likely to be inaccurate or irrelevant. HMRC has advised us that employment expenses of over £120 are being removed from the person’s tax code from 2026/27 if at least one of the following criteria is met:  The person has no current pay as you earn (PAYE) income, There has been an employment gap of a full tax year since employment expenses were claimed, No self-assessment (SA) tax returns have been filed since 2021/22 where there are indicators that the expense should have been resubmitted via self-assessment, and The employment expenses included within the tax code are greater than those included in their 2022/23 SA tax return.  Higher rate gift aid relief will be removed from the taxpayer’s tax code where:  the same amount of relief has been included in their tax code for at least three tax years, and no SA tax returns have been filed for at least three years.    HMRC says that any taxpayers who believe they are incorrectly impacted by these changes should submit a claim via the usual processes to ensure they still claim the tax relief they are entitled to. 

Revenue has published its Protected Disclosures Annual Report for 2025 which outlines  information on both the internal and external protected disclosures received by Revenue in 2025. The publication notes a continued year‑on‑year increase in external disclosures relating to possible tax or duty non‑compliance. Internal disclosures come from current or former Revenue staff and relate to potential wrongdoing within the organisation, while external disclosures are made by workers outside Revenue concerning potential tax, duty, or customs‑related wrongdoing. In 2025, four reports were received for consideration under Revenue’s internal policy on protected disclosure reporting in the workplace. In respect of the four reports received in 2025, assessments have been completed and follow-up procedures are ongoing, all of which are at an advanced stage. During 2025, follow up procedures in respect of four reports, which were received prior to 2025, were finalised. In three of these instances the assessment and detailed follow-up determined that there was no evidence of a relevant wrongdoing. In the fourth instance, the detailed follow up and recommendations from the Protected Disclosures Group, resulted in a strengthening of internal procedures. External protected disclosures are reports made by workers who are employed by a business, individual or organisation, other than Revenue, that contain information about potential wrongdoing related to tax, duty or customs controls. In 2025, a total of 1,743 reports were received through Revenue’s external protected disclosures channels, up from 930 reports received in 2024. After an initial assessment was completed for all 1,743 reports received in 2025, 241 reports were assessed as meeting the criteria to be considered as a protected disclosure. The publication indicates that compliance interventions opened on foot of the receipt of protected disclosure reports received yielded over €1.5 million in additional taxes and/or duties for the Exchequer in 2025. Commenting on the publication, Revenue’s Director of Internal Audit, Leeann Kennedy said “It has always been the case that Revenue welcomes all reports of information regarding suspected tax non-compliance or tax evasion. Revenue continues to demonstrate a clear commitment to its obligations under the Protected Disclosures Act by making it as easy as possible for workers to report information about potential tax related wrongdoing that they have encountered in a work-related context”.

In this week’s cross-border trading corner, we bring you the most recent Trader Support Service bulletin and the latest Brexit and Beyond newsletter from the Northern Ireland Assembly EU Affairs team. HMRC has also sent an update for businesses on the UK UK-EU SPS (Sanitary and Phytosanitary) agreement and HMRC has also sent comms on CERTEX validation and errors, including information for traders. Update for businesses on the UK UK-EU SPS agreement Readers may have already be aware that on 19 May 2025, the UK government and the European Union (EU) agreed to pursue a SPS agreement. This, together with the Windsor Framework, aims to make it easier, cheaper, and more predictable for goods to move not just between the UK and the EU, but also within the UK itself, including smoother movements from Great Britain to Northern Ireland. This agreement covers the trade, production, and movement of plants, animals, and their products, food and feed safety, broader nutrition-related areas such as food supplements, fortified foods, food for specific groups, nutrition and health claims, and nutrition labelling, wider agrifood rules related to food labelling, organics, key agri-food marketing standards, and compositional standards, in addition to the regulation of pesticides and biocides. More information has been published by Defra here: UK-EU SPS Agreement - Information for Businesses - GOV.UK This includes who these changes will apply to and when, the benefit of the changes, what these will mean for businesses, what businesses can do now to start getting ready, and the launch of a Call for Information to understand the impact of the agreement and what further support businesses need in order to prepare.   The Government will continue to update businesses as this progresses.

Last week, the Institute’s Head of Public Policy, Grant Sweetnam attended the inaugural Annual Savings and Investment Forum held at the Central Bank. The Tánaiste and Minister for Finance, Simon Harris T.D. addressed the Forum announcing his intention to introduce an Investment Account for Ireland. The Government intends to legislate for the Investment Account this year and for accounts to be offered from 2027. Savings and investment accounts form a fundamental pillar in Europe's Saving and Investment Union proposals to increase levels of investment among citizens. In Ireland, nearly €170 million in household deposits is held in low return deposit accounts which diminish in terms of purchasing power over time. The savings and investment account proposed by the Tánaiste is similar in nature to the Swedish model which was first introduced in 2012. Simplicity is central in the proposal with a proposed annual flat rate of tax to be applied and administered entirely by the financial provider rather than the individual investor. As a result, investors have no reporting obligations and individual transactions are not taxed. At the Forum a strong emphasis was placed on financial literacy. Improving understanding and confidence among individuals will be critical to increasing participation in capital markets over the long term. The Institute made the point that without financial literacy, the savings and investment accounts will not be as successful as they can be. The Tánaiste also indicated that the roadmap on taxation of investment products will be published in the coming months.

The Directorate-General for Taxation and Customs Union Member States has published the latest Data on Taxation Trends. In 2024 EU Member States collected €7.1 trillion in taxes, an increase of 5.6 percent from 2023, with labour taxes accounting for 51.5 percent of total tax revenue.  

The OECD and the African Tax Administration Forum (ATAF) have completed a series of joint workshops to support the simplification of transfer pricing throughout the African region. ATAF and the OECD have reaffirmed their commitment to supporting African countries through continued capacity building and technical assistance to facilitate the effective application of transfer pricing rules across the region.

In Irish news, the Institute has given evidence to the Oireachtas on proposals to substantially alter the right to elect for a private hearing at the Tax Appeals Commission, and a delegation from the Institute attended the seventh meeting of the Department of Finance’s Business Tax Stakeholder Forum. In UK news, with the start of Financial Year 2026 and ahead of the 2026/27 tax year, we are launching a series of articles on various key changes. We are also seeking your views on an HMRC consultation on a proposal for new reporting requirements for close companies in respect of transactions with participators. In International news this week, the EU Council and Parliament have agreed on landmark reform of the EU customs framework. Ireland 1. Read about the evidence given by the Institute to the Joint Committee on Finance, Public Expenditure, Public Service Reform and Digitalisation, and Taoiseach outlining the importance of protecting taxpayer privacy. 2. Read the updates from the recent meeting of the Business Tax Stakeholder Forum which was attended by representatives from the Institute. UK 3. Read the first in our series of articles looking at various key changes due to commence at the start of the new Financial Year 2026 and the tax year 2026/27. 4. HMRC is consulting on two areas relevant to companies and we are particularly seeking your views on the proposal requiring close companies to report additional information on transactions with participators. International 5. The European Council and Parliament have agreed to a reform of the EU Customs Union including the establishment of a new single EU customs data hub. 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 Cross-border developments and trading corner here.  

Over the next few weeks in a series of articles we’ll be taking a look at the key changes to UK tax legislation which have come into operation due to commencement of the new Financial Year 2026 from earlier this week on 1 April 2026, or when the new tax year 2026/27 starts next week on 6 April 2026. Part 1 of this series focuses on Making Tax Digital (MTD) for Income Tax and measures affecting tax agents. MTD for Income Tax 6 April 2026 marks the go live mandatory start date of MTD for Income Tax. Mandation commences from this date for self-employed individuals and landlords with qualifying gross income (not profit) which exceeded £50,000 in the 2024/25 tax year. The mandation limit subsequently falls from 6 April 2027 to £30,000, and then to £20,000 from 6 April 2028. MTD requires those mandated to keep digital records and submit quarterly summaries of income and expenses to HMRC via compatible software. The first deadline for submitting MTD 2026/27 quarterly updates for quarter 1, which for most mandated taxpayers will run from 6 April 2026 to 5 July 2026, is 7 August 2027. Members can access the Institute’s MTD hub for support on this key change. Ahead of the start date, HMRC has published breakdowns by industrial sector and geographic region of the taxpayers expected to be within scope of MTD for Income Tax from April 2026. The data is based on information from 2023/24 Self-Assessment returns.  Last week the Government laid the final regulations in Parliament on the requirements and scope of MTD for Income Tax. The regulations were laid after further amendments based on feedback from stakeholders, including Chartered Accountants Ireland. Key aspects of the regulations include the phased introduction of MTD for Income Tax based on income, including those with qualifying income over £30,000 from April 2027 and those over £20,000 from April 2028, the requirement to keep digital records and submit quarterly updates, and annual returns through MTD-compatible software. The regulations also offer practical features, such as the option to align reporting to calendar quarters and targeted exemptions for those for whom digital use would not be reasonably practicable.  A new Tax Information and Impact note (TIIN) on the £20,000 to £30,000 mandation cohort that will be joining MTD for Income Tax from April 2028 has also been published to supplement the TIIN published in 2024 for those with qualifying income above £30,000. The TIIN sets out the Government’s view on the taxpayer impact of MTD for Income Tax, including the cost to transition to and operate new software to comply. According to HMRC, although this is broadly comparable to those with qualifying income in excess of £30,000, the new TIIN reflects a different demographic, and revised ‘assumptions’ that underpin the estimated software costs, agents’ costs, training, and familiarisation time and free software take-up.   Measures affecting the tax adviser market From 6 April 2026 HMRC will have a range of enhanced powers to sanction tax advisers, in addition to new powers to tackle promoters of tax avoidance arrangements. Broadly, for the latter, there will be a statutory ban on promoting tax planning arrangements with ‘no realistic prospect of success.’ Regulations also will prohibit the promotion of arrangements ‘likely to cause harm to participants.’ The sanctions under this legislation will be severe and include significant penalties, a strict liability criminal offence, and the ability of HMRC to suspend an agent’s registration. Legislation will also take effect from 6 April 2026 which will amend the tax agent ‘dishonest conduct’ rules introduced by Finance Act 2012. Essentially, dishonest conduct will be downgraded and the rules will apply to tax advisers who facilitate non-compliance by their client. The associated penalty framework will also be substantially enhanced and will also require HMRC to publish information about any adviser charged a penalty exceeding £7,500. From May 2026 new rules will also require those providing tax advice, including overseas advisers, to mandatorily register with HMRC. Readers may recall that the timetable for registration was published last month. By way of reminder, registration is expected to officially open online from 18 May 2026. Importantly, if an agent already has an agent services account (ASA), the agent does not need to register again. Instead, HMRC will subsequently contact the agent via its ASA when more information is required in order to check that the agent meets certain conditions. Agents who do not have an ASA and who meet the conditions to register will need to register for an ASA from 18 May 2026, unless one of the following applies: if the agent already has a Self-Assessment or Corporation Tax account, registration is required from 18 August 2026, and if the agent only provides third-party payroll services on behalf of clients and does not interact with HMRC in any other way, registration is required from 18 November 2026. Note that irrespective of the registration date which applies, a transition period of at least three months is available. The legislation implementing this is contained in Finance Act 2026. According to statements made by government ministers in the House of Commons, whilst the draft legislation moved through the Parliamentary process, the measures which will directly affect tax agents, including mandatory registration, are expected to be implemented in a reasonable and proportionate manner. Dan Tomlinson MP, Exchequer Secretary to the Treasury (XST) specifically addressed comments on the draft legislation to the House of Commons during its scrutiny of the Finance Bill in early February 2026 which acknowledged engagement on these issues by the Professional Bodies, which includes Chartered Accountants Ireland, and the important role that agents play in the tax system. At column 223 the XST said “I have been engaging in detail with stakeholders on the changes we are making, because it is important that legitimate and good tax advisers see that the Government have confidence in them and the work they are doing”. He went on to say that agent registration is “specifically about stopping harmful tax advisers who do not meet the basic minimum standards” and that it does “not give HMRC new powers to investigate whether applicants breach the standard for agents”. On HMRC’s powers to suspend an agent’s registration, the XST said at column 224 that HMRC will: “suspend a tax adviser only after due process, including offering opportunities to comply and a chance for the adviser to explain whether there is a good reason why they are unable to do so”, and “not use these powers for minor breaches”. At column 230 the XST further said that HMRC will “always work with a tax adviser who is genuinely trying to comply, will never suspend a tax adviser when doing so would be unreasonable or disproportionate, and will always consider the nature of any potential breach and how a suspension would impact the tax adviser and their clients”. On sanctionable conduct, at column 235 the XST said that “the powers will not affect advisers who act in good faith, or who take a credible view as to what the law requires of their clients, including where they use extra-statutory concessions or HMRC guidance to form that view”. Furthermore, the measures “do not affect advisers who make mistakes while trying, as the vast majority do, to do the right thing”. The XST’s comments were echoed by Lucy Rigby MP, Economic Secretary to the Treasury (EST), when speaking about the prohibition on promotion. The EST confirmed at  column 204 that the powers “are not intended to be directed against legitimate tax advisers who are operating to a high professional standard but, while acting in good faith, make genuine mistakes” and that ministers have “asked HMRC officials to work with stakeholders in developing published guidance to address the fine detail of exactly how the prohibition will work in practice”.

Last Thursday, a delegation from the Institute attended the seventh meeting of the Department of Finance’s Business Tax Stakeholder Forum (BTSF) at the Department of Finance’s offices on Upper Merrion Street. The Department provided updates to stakeholders on a range of business tax issues both domestically and internationally, as well as providing an update on the work ongoing around the Irish Presidency of the European Council later this year. On the domestic front, the Department explained its business tax priorities for 2026 and provided updates on various ongoing projects, such as Phase One of the reform of the taxation of interest in Ireland. One of the key priorities for 2026 on the business tax front is the Research & Development (R&D) tax credit and the recommendations arising from last year’s public consultation. Key to any changes which will be considered by the Department will be to identify the potential for additionality to the economic activity in Ireland. In terms of the now well publicised proposals for an Irish Savings and Investment Account, the Department acknowledged its consideration of the Swedish model in particular. As part of this work, a roadmap is expected to be published very shortly. We will have more details in due course once this is published. On the international front, the Department provided an update on the work to implement the Pillar Two Side-by-Side Package, and provided more detail into the work to commence on addressing the tax complexity faced by cross-border/hybrid workers on the island of Ireland. The work on Pillar Two is being addressed at a subgroup of the BTSF, which the Institute attends also. On the issues currently facing cross-border workers, we are due to meet the Department separately on this in the coming weeks and we will have a full update for readers at that point. Finally, on the EU Presidency, there is a substantial amount of work ongoing as the Government prepares to take up the role this summer. From a tax point of view, the Tax Omnibus Directive and the Directive on Administrative Cooperation (DAC) Recast Directive will be two files which the Government will be keen to progress during its term. From an overall perspective, the Government will be aiming to highlight the need for simplification in light of the impact of the current complexity on EU competitiveness. In closing, a short note on the BTSF for readers who may not be familiar with the forum. The BTSF was established as a forum between the Department of Finance and key stakeholders to discuss business tax policy. The meetings are chaired by senior Department officials and are attended by representatives from various trade and professional organisations, as well as other key governmental stakeholders. It has proven so far to be a very productive and engaging forum and we look forward to the continued success of the forum into the future.