Revenue has published a new Tax and Duty Manual to provide guidance on the reporting obligations under section 895 TCA 1997 for Irish resident individuals and companies who open a foreign account. Guidance is also provided for agents or financial intermediaries who facilitate the opening of a foreign account by an Irish resident individual or company.   This manual incorporates information previously contained in Tax and Duty Manual regarding accounts liable to deposit interest retention tax, company, pension scheme and PEPP provider deposits, which has been updated accordingly. 

Readers are reminded that Thursday 21 March 2024 is Local Property Tax (LPT) deduction date for property owners that opted to pay their 2024 LPT liability by annual direct debit (ADI). 

Earlier today HMRC announced that a series of new and significant permanent changes will take effect on a range of its helplines from 8 April 2024. The announcement comes after previous restrictions to various helplines which first began in December 2022 and continued at various times in 2023 and into the early part of 2024. Members with specific queries are asked to contact us to discuss. The Institute are concerned about these changes, will be monitoring their impact, and welcomes your feedback at any time on HMRC services.  In summary, the changes are:  between 8 April 2024 and 30 September 2024, the Self-Assessment (“SA”) helpline will be closed – callers will instead be directed to use HMRC’s online services;  between 1 October 2024 and 31 March 2025 the SA helpline will be open “to deal with priority queries” – however callers with queries that can be “quickly and easily resolved online will be directed to HMRC’s online services”;  the VAT helpline will only be open for 5 days every month ahead of the deadline for filing VAT returns – outside of this time, callers will be directed to use HMRC’s online services; and  the PAYE helpline will no longer take calls about refunds – callers will be directed to use HMRC’s online services.  HMRC advisers will continue to be available during normal office opening hours to support those who cannot use online services or who have health or personal circumstances that mean they need extra support. HMRC has published a help card on how to access extra support. HMRC advisers will continue to be available during normal office opening hours to support those who cannot use online services or who have health or personal circumstances that mean they need extra support. HMRC has published a help card on how to access extra support. All other helplines will continue to operate as they do currently. At HMRC’s recent Annual Stakeholder Conference attendees heard from HMRC’s Chief Executive Jim Harra about “tough choices about resources” and how HMRC is forging ahead with plans to reduce traditional phone and post contact by moving more taxpayers to “self-serve online”. Mr Harra also confirmed that HMRC’s headcount will significantly reduce in 2024/25.  HMRC has also published an impact assessment in respect of the closures of the PAYE repayment helpline and the VAT helpline in 2023: -  PAYE repayment telephony lines closure  VAT lines telephony lines closure   

Revenue has provided the Institute with an update on R&D tax credit claims for 2022 and 2023 including some matters to be mindful of when completing the R&D panels in the 2023 Form CT1. Revenue is prioritising the finalisation of CT1 2022 claims and will progress to 2023 claims as soon as possible. The note includes a broad summary of the main errors identified regarding the completion of the R&D panels. Revenue advises agents and taxpayers to review their 2023 R&D claims submitted to date and to make any necessary corrections to the R&D panels within the 12-month time limit as the onus is on the taxpayer to ensure a valid claim is made within that time-limit.  Revenue also advises that it is to release an IT update to the Self-Assessment Notice to reflect the R&D cash refund at a later date. 

We recently issued a reminder that second hand vehicles moved from Great Britain (“GB”) to Northern Ireland (“NI”) prior to 1 May 2023 can continue to avail of the VAT margin scheme, but only until the extended deadline of 30 April 2024. HMRC has requested details of any such vehicles still in stock and unsold. Please contact us to provide this information by Friday 22 March 2024. Our thanks go to anyone who has already been in touch to provide this information.  The 30 April 2024 deadline means that any vehicles moved from GB to NI prior to 1 May 2023 but sold after 30 April 2024 will require output VAT to be charged on the full selling price, and not on the margin.   The six-month extension from the original deadline of 31 October 2023 followed extensive lobbying from Chartered Accountants Ireland in September and October 2023.

The Main Tax Administration Liaison Committee (“Main TALC”) convened its first meeting of the year earlier this month. The primary role of this committee is to hold general oversight of the various TALC sub-committees. Revenue reminded bodies of the 1 May 2024 deadline for the Debt Warehousing Scheme and provided an update of the ongoing work of the TALC Business Simplification Sub-Group, which is due to report later this year. There was also an update on the guidance on section 80 SDCA 1999, as we reported in last week’s Tax News. Minutes of the meeting will be available shortly.   Compliance rates for Enhanced Reporting Requirements for Employers  Revenue noted that it is satisfied with compliance rates so far in 2024. A subgroup, which includes the Institute, under the auspices of the CCAB-I, continues to meet and report into Main TALC. Practitioners raised concerns about the volume of queries reportedly being brought to the National Employers’ Helpline (NEH). Our own members have raised several issues with the upload facility, in particular returns not being accepted. Revenue will continue to work with taxpayers during this service for compliance period and we will continue to keep readers updated about developments via Tax News.  R&D Specified Returns for 2022 and 2023  Readers may be aware of the requirement to submit a ‘Specified Return’ when submitting R&D claims with the Form CT1 2023. This is due to the amendments made in Finance Act 2022 updating the administration of the credit, moving to a credit repayable over 3-years, in line with certain requirements of the EU Minimum Taxation Directive (“Pillar Two”). Practitioners noted that problems seem to be persisting when filing 2024 corporation tax returns using certain software systems.  Following the meeting, Revenue provided the group with a note  regarding R&D tax credit claims for 2022 and 2023 This is covered in more detail in the next story in Tax News. 

Last week saw the publication of the Spring Finance Bill 2024 (official title Finance (No. 2) Bill 2023-24). The Bill reflects many of the tax measures recently announced as part of the Spring Budget 2024. First reading of the Bill took place last week in the House of Commons. No date has yet been set for second reading.  The National Insurance Contributions (Reduction in Rates) (No. 2) Bill has also been introduced to Parliament. This Bill provides for the reductions in both Class 4 and Class 1 employee National Insurance Contributions as announced earlier in the month as part of the Spring Budget 2024.  

This week we bring you the latest list of employers, as published by the UK Government, for failing to pay the national minimum wage and the Public Accounts Committee has published its report into HMRC performance. HM Treasury has also confirmed that post office compensation payments will be tax free for overturned convictions and HMRC has set out the evidence which will be needed from 1 April 2024 when making a claim for a creative sector tax relief.  National minimum wage  Over 500 employers have been named in the UK Government’s annual report for failure to pay National Minimum Wage. The NMW is enforced in the UK by HMRC. Employers were ordered to repay workers nearly £16 million, plus an additional financial penalty, after breaches left over 172,000 workers out of pocket. The report also features a reminder that NMW is set to increase from 1 April 2024 as announced in the November 2023 Autumn Statement.  Report into HMRC performance  The Public Accounts Committee has published its report into HMRC performance in 2022-23. The report’s accompanying Press Release is titled “‘All-time low’: HMRC customer service deteriorates amid taxpayers’ exasperation” and says that HMRC is appearing to struggle to cope as taxpayer population and tax complexity rise. Although there has been a significant drop in criminal prosecutions, according to the report this sends the wrong message. The approach to IR35 rules is also deterring legitimate economic activity. Chartered Accountants Ireland regularly discusses HMRC performance at various forum meetings and welcomes your feedback at any time by email.  Post office compensation payments  In a written statement made to Parliament last week, the Financial Secretary to the Treasury Nigel Huddleston has confirmed that no income tax, capital gains tax, national insurance contributions, corporation tax or inheritance tax will be payable on compensation for postmasters whose convictions are overturned by upcoming legislation or those who receive the £75,000 fixed sum payment from the Horizon Shortfall Scheme. The Government will legislate via secondary legislation to exempt these payments in due course.  Guidance on creative sector claims  From 1 April 2024, a company claiming a creative industry tax relief will be required to provide supporting evidence for its claim. HMRC has now updated the relevant guidance to provide details of the supporting evidence required in order to make a valid claim for creative industry tax relief. If this mandatory information is not provided, HMRC will be able to amend the company’s tax return to remove the claim. 

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. We issue a reminder about the move of export declarations to the Customs Declarations Service (“CDS”) the deadline for which has now been extended and, from 1 March 2024, the EU has introduced a new digital system for union goods. News of how changes to the CDS which take effect from 24 March 2024 impact on goods moving into Northern Ireland also features.  Move to CDS for all export declarations delayed to June 2024  HMRC had previously announced that from 30 March 2024 all export declarations must be made using the CDS and not CHIEF. Recently HMRC issued a Press Release confirming that all businesses can now move their export declarations to the CDS. However, instead of requiring the CDS to be used for all exports from 30 March 2024, businesses who have yet to move their export declarations to CDS will have a transition period to move across until 4 June 2024. After this date, customs declarations will not be able to be submitted through the CHIEF service.   More information about moving to the Customs Declaration Service is available on GOV.UK. HMRC says that it will continue to provide help and support to businesses moving to CDS in the coming months and will continue to work closely with the border industry throughout this process.  Digital proof of status for EU goods  From 1 March 2024, the EU has introduced a new digital system for union goods (products made in the EU or imported with duties paid). Union goods avoid EU customs procedures but require digital “Proof of Union Status” when moving them between EU countries and Northern Ireland via a non-EU territory.   To use the new system, traders should email admin.uum@hmrc.gov.uk with their name, email, registration confirmation, NI business address, and XI EORI number. More information is available in a recent Agent Update.  Impact of CDS changes on goods moving into Northern Ireland  From 24 March 2024, HMRC changes to the CDS will affect how you make declarations into Northern Ireland. After this date, to use your UKIMS authorisation, you (or your agent or intermediary) will need to start using some new codes and your UK Internal Market Scheme authorisation (“UKIMS”) authorisation number.   These changes will apply to goods moving into Northern Ireland from Great Britain (GB-NI) and to goods moving into Northern Ireland from a country outside of both the UK and the EU (Rest of World-NI).  If you (or your agent or intermediary) have been using the ‘NIREM’ code to declare goods ‘not at risk’, you could be impacted by these changes if you haven’t already got a UKIMS authorisation. From 24 March 2024, if you use the ‘NIREM’ code without declaring a valid UKIMS authorisation, duties at the EU rate will be calculated and will be charged to you by CDS if duties are due.  Note that there will be additional considerations if you are:- moving goods that will be subject to processing in Northern Ireland;  moving goods subject to tariff-rate quotas, such as steel; or  seeking to waive duties under the customs duty waiver scheme.  Further guidance on these changes will be published on GOV.UK from 24 March 2024. In the meantime, HMRC has advised us that letters are being sent to affected traders to notify them in advance.  Miscellaneous updated guidance etc.   Recently updated guidance, and publications relevant to EU exit are set out below:-  Reference documents for The Customs (Reliefs from a Liability to Import Duty and Miscellaneous Amendments) (EU Exit) Regulations 2020;  Import, export and customs for businesses: detailed information;  Simplified Customs Declaration Process: notification of non monetary amendment;  Change or cancel a Simplified Frontier Declaration;  Moving qualifying goods from Northern Ireland to the rest of the UK;  Trading and moving goods in and out of Northern Ireland;  Search the register of customs agents and fast parcel operators; and  Customs Declaration Service. 

In Irish news, Revenue has updated its ERR guidance regarding advance travel and subsistence payments and we bring you updates from the recent meetings of the Tax Administration Liaison Committees (TALC). In UK news, we take a closer look at the 2024 Spring Budget’s tax announcements on tax simplification and a range of miscellaneous matters. Ireland  1.   Revenue has updated its ERR guidance regarding advance travel and subsistence payments. 2.   Revenue outlined VAT Registration requirements at the recent meeting of the TALC Indirect Taxes Sub-Committee.  3.   Read our update from the recent meeting of the TALC Direct & Capital Taxes Sub-Committee.  UK  4.   Read about the announcements made at last week’s Spring Budget on tax simplification. 5.   The Spring Budget publications also contained a range of miscellaneous measures.  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.  

The first increase in seven years to the VAT registration threshold, further enhancements to the various creative sector reliefs and the inclusion of leased assets in the full expensing regime (when fiscal conditions allow) were the key business taxes announcements. HMRC has published updated guidance around the tax deductibility of training costs for sole traders and the self-employed. And the government is also extending the Energy Profits Levy by an additional year to March 2029, which should raise £1.5 billion. HMRC are also to establish an expert panel to assist in the administration of R&D tax reliefs. In a meeting on Budget Day with HMRC, Chartered Accountants Ireland requested more details on this and was advised that this will be provided in due course. VAT thresholds From 1 April 2024, the current £85,000 VAT registration threshold will increase to £90,000, the first increase since April 2017. The Chancellor’s aim here is to ensure that the UK continues to have one of the highest thresholds in the OECD. According to the main budget publication, over 28,000 businesses will benefit in 2024/25 from no longer being VAT registered. The de-registration threshold will also increase from £83,000 to £88,000 from 1 April 2024. Full expensing to be extended to leased assets Full expensing for companies was made permanent in the Autumn Statement 2023. These capital allowances are currently only available to companies incurring expenditure on new plant and machinery (with some exclusions). The Chancellor announced today that full expensing will be extended to leasing when fiscal conditions allow. Draft legislation on this extension will be published shortly. Creative sector tax reliefs A UK independent film tax credit will be introduced at a rate of 53 percent on qualifying film production expenditure. This enhanced audio-visual expenditure credit will be available for films with budgets under £15 million that meet the requirements of a new British Film Institute test. Productions will be able to make claims from 1 April 2025, in respect of expenditure incurred from 1 April 2024 onwards provided that films started principal photography from 1 April 2024. Following a call for evidence at Autumn Statement 2023, the credit rate for visual effects costs in film and high-end TV will be increased to 39 percent from April 2025, and the 80 percent cap will be removed for qualifying expenditure for visual effects costs. The government will also consult on the types of expenditure that will be in scope for the additional tax relief which will be implemented via a future Finance Bill. And finally, from 1 April 2025, the rates of theatre tax relief, orchestra tax relief, and museums and galleries exhibitions tax relief (“MGETR) will be permanently set at 40 percent (for non-touring productions) and 45 percent for touring productions and all orchestra productions. The sunset clause for MGETR is also being removed meaning relief will not end on 31 March 2026 as announced at Spring Budget 2023. Tax relief for training costs HMRC has also published updated guidance around the tax deductibility of training costs for sole traders and the self-employed. This guidance aims to ensure that updating existing skills, maintaining pace with technological advancements, or changes in industry practices, are allowable costs when calculating taxable profits.

Further reductions in National Insurance Contributions (“NICs”) for employees and the self-employed and a reduction in the higher rate of Capital Gains Tax (“CGT”) for residential properties disposals featured under the personal taxes banner. Amendments will also be made to the high income child benefit charge thresholds ahead of more sweeping changes in 2026. The remittance basis regime for non-UK domiciled individuals is to be abolished and replaced from 6 April 2025 with a new residence based regime and a new residence based regime will also be introduced for Inheritance Tax. And finally, the furnished holiday letting regime is to be completely abolished from 6 April 2025. NICs reductions From 6 April 2024, the main rate of employee NICs is being reduced from 10 percent to 8 percent. Combined with the 2 percent reduction from 12 percent to 10 percent which was announced at Autumn Statement 2023 and took effect from 6 January 2024, according to the Budget publication this will save the average worker on £35,400 over £900 a year. From the same date, a 2 percent reduction is also being made in the main rate of Class 4 self-employed NICs which will now reduce from 9 percent to 6 percent from 6 April 2024 (a 1 percent reduction from 9 percent to 8 percent from 6 April 2024 had previously been announced at Autumn Statement 2023). When taken together with the abolition of the requirement to pay Class 2 NICs from 6 April 2024, this should save the average self-employed individual on £28,000 around £650 a year. CGT on residential property disposals From 6 April 2024, the higher rate of CGT for residential property gains will be reduced from 28 percent to 24 percent. Residential property gains in the basic rate band will continue to be taxed at 18 percent. High income child benefit charge (“HICBC”) In order to end the current unfairness in the Child Benefit system, the Chancellor announced that from April 2026 the HICBC will move to be assessed on the overall household, rather than on an individual basis. The Government will consult on this in due course. In the meantime, from April 2024 the HICBC income threshold where the tax commences will be increased from £50,000 to adjusted net income of £60,000, and the rate at which the HICBC is charged will be halved so that Child Benefit is not withdrawn in full until individuals earn £80,000 (up from £60,000). This essentially means that from 6 April 2024, every £100 of income over £60,000 will result in a 0.5 percent tax charge on the child benefit received. Abolition of remittance basis for non-UK domiciled individuals The remittance basis for non-UK domiciled individuals is to be abolished from 6 April 2025 and replaced with a UK wide residence-based regime. Individuals who opt into the new regime will not pay UK tax on any foreign income and gains arising in their first four years of tax residence, provided they have been non-UK tax resident for the last 10 years. Transitional arrangements will be introduced for existing non-UK domiciled individuals claiming the remittance basis. This will operate broadly as follows: There will be an option to rebase the value of CGT assets to 5 April 2019; A temporary 50 percent exemption for the taxation of foreign income will be available in 2025/26 only; and A two-year temporary repatriation facility will be available to bring previously accrued foreign income and gains into the UK at a 12 percent tax rate of tax. Further information on these changes can be found in a technical note published by HMRC. Inheritance tax (“IHT”) The Government also announced its intention to move to a residence-based regime for IHT and will consult in due course on the best way to achieve this, including consulting on a 10-year exemption period for new arrivals and a 10-year ‘tail-provision’ for those who leave the UK and become non-resident. However, no changes to IHT will take effect before 6 April 2025. Savings The 0 percent starting rate band for savings income will remain at £5,000 in 2024/25.