In its response to the consultation “Raising standards in the tax advice market – strengthening the regulatory framework and improving registration” which examined three different approaches to regulate the UK tax agent market in future, the Institute’s Northern Ireland Tax Committee sets out that its preferred approach is mandatory membership of a recognised Professional Body. However, the Committee also tells HMRC that additional regulation of practising members of Chartered Accountants Ireland is not needed. The Committee’s full response can be read in the Tax Representations section of our website.  The Committee also recommended that there should be a minimum transition period of not less than five years to ensure that the change is properly implemented, and the market is able to fully prepare and adjust. It is also recommended that HMRC consider what transitional arrangements can be introduced once a decision has been made on the approach to be taken.  

The Spring Finance Bill 2024 (official title Finance (No. 2) Bill 2023-24), which reflects many of the tax measures announced as part of the Spring Budget, received Royal Assent last Tuesday 28 May just before Parliament was dissolved on 30 May. Finance (No.2) Act 2024 now has force of law as Royal Assent is the final stage of a bill's passage through Parliament.   Some of the measures included in the Act are as follows:-  the higher rate of capital gains tax on disposals of residential properties is reduced from 28 percent to 24 percent for disposals from 6 April 2024;   the thresholds for the high income child benefit charge increased from 2024/25 onwards from £50,000 to £60,000 (lower threshold) and £60,000 to £80,000 (higher threshold); and  multiple dwellings relief for stamp duty land tax is abolished where the effective date falls on or after 1 June 2024. This change is subject to transitional arrangements. 

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. And finally, we issue a final reminder that from today, Tuesday 4 June 2024, all export declarations must be made via the Customs Declarations Service, and not CHIEF.  Miscellaneous updated guidance etc.   Recently updated guidance, and publications relevant to EU exit are set out below:-  UK Trade Tariff: European Union and new member states;  UK Trade Tariff: preferential trade arrangements for countries outside the UK and EU;  UK Trade Tariff: relief from customs and excise duties and VAT;  UK Trade Tariff: end-use relief on goods used for a prescribed use;  UK Trade Tariff: VAT;  UK Trade Tariff: valuing goods;  UK Trade Tariff: appeals;  Managing your customs warehouse; and  Notices made under the Taxation (Cross-border Trade) Act 2018. 

Check out the latest items on the Agent Forum. Remember, in order to view each item, you must be signed up and logged in.   All agents, who are a member of a professional body, are invited to join HMRC’s Agent Forum. This dedicated Agent Forum is hosted in a private area within the HMRC’s Online Taxpayer Forum. You can interact with other agents and HMRC experts to discuss topical issues and processes. 

In Irish news, the Institute attended the 2024 National Economic Dialogue this week, Revenue publishes new guidance on determining the employment status of workers for tax purposes and the Parliamentary Budget Office publishes its Spring Commentary 2024. In UK news, read our update on Making Tax Digital for income tax and the deadline for providing 2023/24 P60s to employees is today, Friday 31 May 2024.  Ireland The Institute was represented at the 2024 National Economic Dialogue forum hosted by both the Department of Finance and Department of Public Expenditure and Reform. Revenue has published new guidance for determining the employment status of workers for tax purposes. The Parliamentary Budget Office has published its Spring Commentary 2024. UK Read our update on Making Tax Digital for income tax. Today, Friday 31 May 2024 is the deadline for providing 2023/24 P60s to employees.     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 here.  

The 2024 National Economic Dialogue (NED) is taking place today, 27 May, in Dublin Castle. The theme of the forum, hosted by both the Department of Finance and the Department of Public Expenditure, NDP Delivery and Reform, is “a more shock-prone world: challenges and opportunities for Ireland”.   The NED provides a forum for public consultation and discussion ahead of Budget 2025 later this year. The Institute is being represented at the forum by Cróna Clohisey, the Institute’s Director of Advocacy & Voice, and the Institute’s new President, Barry Doyle. Further information on the event, including a link to the livestream, can be found on gov.ie. We will provide members with a full update from the event in Tax News next week.   

Revenue has published a new Tax and Duty Manual for determining the employment status of workers for tax purposes. The new guidance reflects Revenue’s interpretation of the Supreme Court judgment in The Revenue Commissioners v Karshan [2024] IESC  24 (“Karshan”).  The manual outlines the five-step decision-making framework (described by the Supreme Court) that businesses are to apply in determining whether a worker is an employee or an independent contractor for tax purposes. The manual also includes a number of examples to assist businesses in determining the employment status of workers.   Earlier this year, the Institute, under the auspices of the CCAB-I, provided detailed feedback on a draft which was shared via the TALC Direct and Capital Taxes Sub-Committee. One of our key asks was for clarity on the relative importance of the written contract between the employer and the worker. This was a key aspect of the decision in Karshan.  In its press release last week, Revenue wishes to remind businesses that they are responsible for ensuring that the correct taxes are deducted from their employees’ pay and reported through the PAYE system. It is also recommending that business take this opportunity, if they have not already done so, to review the arrangements currently in place with workers and consider those arrangements in light of the Supreme Court judgment should do so now. In this regard, we note the following passage from page 6 of the new manual: "As outlined throughout these guidelines, there are a number of workers across a number of sectors who will need to be treated as employees for tax purposes, where previously they have been treated as self-employed. It is essential that businesses urgently and comprehensively review arrangements with all workers and determine their employment status for taxation purposes. Where a business previously treated a worker as self-employed, rather than as an employee, and the review of these arrangements by reference to the five-step framework indicates that they are employees for tax purposes, the business must now rectify that position by treating the relevant workers as employees and operating PAYE."  

The Parliamentary Budget Office (PBO) has published its Spring Commentary 2024. This latest publication provides analysis on areas such tax forecasts, employment, climate-related spending, as well as the newly proposed EU Governance Economic Framework and what the new rules mean for Ireland.   With tax receipts in the first quarter of 2024 exceeding those from the same period in 2023, overall tax revenue is projected to rise by 4.6 percent compared to 2023. However, forecasted tax receipts for 2024 have been revised downwards by €440 million to €92.1 billion. The downward revision is primarily attributable to lower forecast VAT and capital gains tax, which will be partially offset by expected increases in income tax.  The report also highlights the significant concentration risk in the public finances with 7.7 percent of top earners responsible for 54.1 percent of income tax paid in 2021 and the top ten corporate groups accounting for 56 percent of corporation tax receipts in 2023.  

Section 97B TCA 1997 provides for a deduction against rental income for individual landlords who undertake retrofitting of rented residential premises between 1 January 2023 and 31 December 2025 while the tenant remains in situ. The tax deduction is conditional on the landlord having received a grant from the SEAI (Sustainable Energy Authority of Ireland) for the retrofitting works. Revenue has published a new Tax and Duty Manual to provide guidance on the deduction for retrofitting expenditure under section 97B TCA 1997.  

Revenue has updated the Tax and Duty Manual which provides guidance on the enhanced reporting requirements (ERR) for employers. The guidance confirms that Revenue do not require reporting under ERR in regard to unpaid volunteers whose only payments are for travel and subsistence expenses incurred in the performance of their volunteer duties in not-for-profit organisations. 

Revenue has updated the Tax and Duty Manual regarding the provision of non-taxable miscellaneous benefits by an employer to their employees. The manual now includes additional guidance on the tax treatment of examination awards (paragraph 8.1), and confirms that an employer's contribution to an employee's Personal Retirement Savings Account (PRSA) is no longer treated as a benefit in kind (paragraph 21). 

Revenue has updated the Tax and Duty Manual regarding Deposit Interest Retention Tax (DIRT) exempt accounts and refund of DIRT. The updated guidance provides that interest arising on a deposit that is solely in respect of a general payment, and work-related payment if applicable, under the Mother and Baby Institutions Payment Scheme can be paid without deduction of DIRT. Payments made in respect of the Mother and Baby Institutions Payment Scheme are exempt from income tax under section 205B TCA 1997.