Many of you will be aware that the 2022/23 online self-assessment (“SA”) filing deadline is later this week on Wednesday 31 January 2024 which is also the deadline for paying any balancing payment of income tax and Class 4 National Insurance for 2022/23 and the first payment on account for 2023/24. HMRC has issued a reminder that taxpayers can enter into a payment plan to arrange time to pay their outstanding tax bill (broadly, this can be used where the taxpayer owes less than £30,000). The guidance on self-assessment for postmasters affected by the Horizon scandal has also been updated. Reminder: we’d still like to hear from you about the impact of HMRC’s helpline restrictions on filing 2022/23 SA returns by the deadline. Please get in touch when you get the opportunity to do so as we will be accepting feedback into the early weeks of February 2024. 

The minutes from the 124th Joint Vat Consultative Committee meeting, which Chartered Accountants Ireland is represented on, have been published. HMRC has introduced a new form for appealing corporation tax penalties and we update you below on using the agent reference number when a payment is to go to a nominee. HMRC has published initial information on how employers and employees can claim back national insurance contributions previously paid as a result of a recent Upper Tribunal decision (see below) and a consultation has been opened on the draft IR35 (off-payroll working rules) legislation changes which aims to enable taxes already paid by individuals to be deducted when recovering the tax due under PAYE. In Scotland, the Scottish Government has published a draft Statutory Instrument to amend the Land and Buildings Transaction Tax. See also a message from HMRC about agent authorisation duplication of letters.  The agent reference number and nominations  We remind you that from 26 February 2024, if a payment is to be made to a nominee, the agent reference number (“ARN”) must be used on all P87 employment expenses and marriage allowance transfer claim forms submitted to HMRC. The ARN is a unique identifier for each legal entity registered with HMRC as an agent and previously was used by HMRC mainly for internal purposes. However, going forward the ARN will be used more frequently when agents contact or are dealing with HMRC.   Claims for overpaid National Insurance Contributions (“NICs”)  The decision in Laing O’Rourke Services Ltd and Willmott Dixon Holdings Ltd vs HMRC case, which HMRC is not appealing, opens up claims for refunds of employee and employer NICs by way of disregarding part of the car allowance from earnings for NICs purposes if an employee has undertaken or claimed business mileage at less than the maximum 45p a mile.   In two recent Bulletins (November 2023 Agent Update and December 2023 Employer Bulletin) HMRC has provided initial information ahead of full guidance on how employees and employers can backdate claims for refunds.  For a claim to be successful all the existing rules still apply. The disregard should be based on “quantified and evidenced business miles driven”. As a result, claims will not be successful if evidence cannot be provided. No disregard is available on payments made that are within the definition of relevant motoring expenditure if salary is sacrificed from an individual’s pay.   Changes to Scotland’s land and buildings transactions tax (“LBTT”)  The Scottish Government recently published a draft Statutory Instrument which will amend the LBTT.   The changes will introduce a new exemption from LBTT for local authorities and there are various amendments to the additional dwelling supplement (“ADS”), which adds an extra 6 percent supplement to the LBTT paid in Scotland.   The legislation will take effect from 1 April 2024 once approved by the Scottish Parliament.  Duplication of agent authorisation letter  HMRC has advised us that some newly registered agents may receive a copy of their authorisation letter at least twice, if not more. HMRC apologises for this confusion and advises that that there is no need to contact them if duplicate authorisation letters are received.    

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 available. We remind you that the first phase of the UK’s Border Target Operating Model for imports into Great Britain commences later this week from 31 January 2024. And finally, the conclusions of last year’s 2023 Civil Society Forum (“CSF”) between the UK and the EU have been published (Chartered Accountants Ireland participates in the UK Domestic Advisory Group which feeds into the annual UK and CSF meeting). UK Border Target Operating Model (“BTOM”) first phase commences from 31 January 2024  In just two days’ time, the UK’s BTOM commences when new border requirements come into effect when importing certain commodities, including some food, into Great Britain. This marks the start of the introduction of the UK’s new BTOM. Two reminder emails have been sent to us by the UK Government (one from HMRC and one sent on behalf of the Department for the Environment, Food and Rural Affairs) setting out the changes in more detail. You can also read more about the first phase of the BTOM in an article in Accountancy Ireland’s Briefly.   Miscellaneous updated guidance etc.   Recently updated guidance, and publications relevant to EU exit are set out below:-  Bringing commercial goods into Great Britain in your baggage; Taking commercial goods out of Great Britain in your baggage; Notices made under the Customs (Import Duty) (EU Exit) Regulations 2018; Notices made under the Customs (Export) (EU Exit) Regulations 2019; Declare commercial goods you’re taking out of Great Britain in your accompanied baggage or small vehicles; Report payments and view your allowance for non-customs state aid and customs duty waiver claims; What you can do if things are seized by HMRC or Border Force; The Taxation (Cross-border Trade) (Miscellaneous Amendments) Regulations 2024 and The Ship’s Report, Importation and Exportation by Sea (Amendment) Regulations 2024; Customs declaration completion requirements for Great Britain; Search the register of customs agents and fast parcel operators; Customs Declaration Service communication pack; Appendix 21: Import Declaration Category Data Sets; and Appendix 2: DE 1/11: Additional Procedure Codes of the Customs Declaration Service (CDS).

This month’s tidbits cover guidance on how to confirm the identity of HMRC representatives and a range of corporation tax return forms have been updated.   

HMRC’s latest schedule of live and recorded webinars for tax agents is available for booking. Spaces are limited, so take a look now and save your place. 

Do you use HMRC online services? Don’t be caught out by the planned downtime to some services. HMRC are warning about the non-availability of specific services on the HMRC website, a range of services are impacted. Check the relevant page for information on planned downtime.    

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. 

The OECD Working Party 1 – a subgroup of the OECD Committee on Fiscal Affairs in charge of the OECD Model Tax Convention – has proposed changes to the application of Article 5 of the Model Tax Convention to extractible natural resources. The proposed changes aim to develop an alternative provision for activities in connection with the exploration and exploitation of extractible natural resources. The OECD published feedback received on the proposals which can be read here.

Last week, the Institute, under the auspices of the CCAB-I, responded to the public consultation on the Standard Fund Threshold (SFT). The SFT was originally designed to limit the level of tax relief available on the capital value of pension benefits accrued by an individual at the time of retirement. When introduced, the SFT was €5 million but had reduced to €2 million by 2014.   In our response, we recommend that the level of the SFT should be linked to changes in the Consumer Price Index. In addition, we suggested that consideration is given to harmonising the treatment of public and private sector pensions as regards the application of the SFT rules when the limits are breached.   

Revenue has published 2023 PAYE statistics which show that over 472,000 PAYE income tax returns have been processed for 2023. This represents an increase of almost 30 percent on the number of returns processed in the same period last year. 275,000 of the returns filed to date have resulted in an overpayment of tax. Health expenses and the rent tax credit account for the largest additional claims returned by taxpayers. The 2023 mortgage interest tax credit is expected to be available to claim later this week.   The Minister for Finance, Michael McGrath T.D., in conjunction with Revenue, has launched a public information campaign to raise awareness among PAYE taxpayers about claiming the range of tax credits and reliefs available. PAYE taxpayers are also reminded that they need to inform Revenue of any additional income which they have earned outside the PAYE system.  Welcoming the launch of this information campaign, Minister McGrath said:  “Since 1 January 2024, €203 million has already been refunded to individuals’ bank accounts as a result of the 2023 returns filed by PAYE taxpayers to date, but Revenue records indicate that a further €480 million may have been overpaid during the year.  I therefore encourage all PAYE taxpayers to log on to Revenue’s myAccount service to finalise their tax position as soon as they can, to ensure that they have claimed all tax credits and reliefs they are entitled to and receive any refund they are due.”  Further information is available in Revenue’s press release. 

Last week, the Institute, under the auspices of the CCAB-I, responded to the public consultation on Ireland’s taxation of share-based remuneration. In our response, we recommend maintaining the exemption from employers’ PRSI on share-based remuneration and legislating for a tax deferral on the exercise of share options.  Other key messages in our response include the requirement for:   Further enhancements to the KEEP scheme to make it more attractive and improve uptake.   Appropriate legislation to enable employees’ benefit from Employee Share Ownership Trusts as a business succession tool.   The introduction of an appropriate safe harbour in relation to the valuation of shares in unquoted companies.   A move from a pre-approval process for Revenue approved share schemes to a pre-notification process. 

Readers are reminded that the first phase of the UK’s Border Target Operating Model for imports from the EU into Great Britain commences later this week from 31 January 2024. These customs changes will impact Irish exporters to Great Britain and will mean UK customs filings must be done prior to the goods departing Ireland and health controls will be imposed on certain foods of animal origin and plants and plant products by UK officials.  Further details of other changes can be found in our EU exit corner below.