This month’s tidbits cover updated guidance in several areas and the publication of the Administrative Burdens Advisory Board’s 2022/23 report.   

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 the fourth meeting of the EU-UK Parliamentary Partnership Assembly took place recently in London. As the reimbursement scheme which allows traders to reclaim duty on goods moving into Northern Ireland which do not subsequently move into the EU is now approaching six months old, we would like to hear your feedback on how the scheme is operating.  Miscellaneous updated guidance etc.   The following updated guidance, and publications relevant to EU exit are available:-  Search the register of customs agents and fast parcel operators;  Known error workarounds for the Customs Declaration Service (CDS);  Data Element 2/3: Documents and Other Reference Codes (Union) of the Customs Declaration Service;  Manage your email address for the Customs Declaration Service;  Importing SPS controlled goods that interact with ALVS;  Attending an inland border facility; and  Car wiring kits for motor vehicles (Tariff notice 13).   

This week, we bring you news of guidance on the new UK reporting rules for digital platforms which come into operation from 1 January 2024 and HMRC has also published new guidance on the VAT treatment of local authority leisure services. The most recent notes of HMRC’s Guidance Strategy Forum are available and the Public Accounts Committee has recently released its report “Progress with Making Tax Digital”, which is highly critical of the programme. HMRC has also contacted us about work which has been ongoing with the Advertising Standards Authority specifically in relation to some repayment agents.  UK reporting rules for Digital Platforms  From 1 January 2024, UK digital platform operators will be required to report details of their sellers to HMRC. Last month HMRC published detailed technical guidance in its International Exchange of Information Manual (part IEIM900000) which aims to assist platform operators in complying with the new rules.  UK resident platform operators may also be required to report under the OECD’s DAC 7 rules which took effect from 1 January 2023. However, DAC 7 contains a provision to prevent double reporting by platforms that are within the scope of both DAC7 and the UK’s new reporting rules. As a result, UK platforms can report directly to HMRC rather than reporting to an EU Member State but only if that Member State has signed up to exchange information with the UK. If that is the case, the platform only needs to report to HMRC from 1 January 2024 as HMRC will subsequently exchange information with the relevant EU Member State’s tax authority.   Note that as DAC 7 has been in force since 1 January 2023, UK resident platforms are still required to report transactions 1 January 2023 and 31 December 2023 under DAC7, i.e. to the relevant EU Member State.   New guidance on the VAT treatment of local authority leisure services   HMRC has published new guidance for local authorities that deals with the treatment of supplies of sport/leisure services. According to an email from HMRC, the guidance has been developed in conjunction with local authorities via The Chartered Institute of Public Finance and Accountancy and other local authority VAT forums.   HMRC therefore says that the guidance achieves the aim of giving local authorities the information they need to implement the recent change in treatment of their supplies of sport/leisure services.   Advertising Standards Authority joint work with HMRC   HMRC has been working with the Advertising Standards Authority (“ASA”) to publish an enforcement notice related to misleading adverts by some repayment agents. The enforcement notice which published earlier this month on 5 December 2023, was jointly-issued with HMRC and provides guidance to promoters of tax repayment agent services. The notice applies across all media which targets UK consumers and sets out that those who fail to comply will be subject to sanctions.   This was followed by the publication of a Press Release which provides more information on the ongoing collaborative work between HMRC and ASA in this area. 

30 December 2023 is the deadline for submitting 2022/23 self-assessment tax returns online if the taxpayer wishes to avail of coding out for tax debt of less than £3,000.  You can pay your self-assessment bill through your PAYE tax code (known as coding out) if all of the following apply:-  you owe less than £3,000 on your tax bill;  you already pay tax through PAYE, for example you’re an employee or get a company pension; and  you submit your paper tax return by 31 October or your online tax return online by 30 December. 

Following the signing of a Commencement Order by the Minister for Finance yesterday, all employers will be required to make returns of certain non-taxable benefits and expenses in real-time under the Enhanced Reporting Requirements (ERR) from 1 January 2024. Revenue has however advised that “a service for compliance approach will be taken until the 30 June 2024”. During this period, Revenue will not be operating any compliance programmes in relation to the ERR and will not seek to apply any penalties for non-compliance. Since the measures were first announced in last year’s Finance Act, the Institute, under the auspices of the CCAB-I, has consistently raised our members’ concerns with the new requirements. In addition to several submissions to Revenue, we wrote to the Minister for Finance on two separate occasions (here and here), seeking the abolishment of the real-time reporting requirement and more recently a delay to the implementation date. While disappointed with yesterday’s announcement, we urge members to ensure they are enabled to commence reporting under ERR from 1 January 2024. For the avoidance of doubt, the non-taxable benefits which will be reportable in 2024 are: Non-taxable reimbursements of travel and subsistence Benefits provided under the small gift exemption The remote working daily allowance. You can find more information on the measure on Revenue’s website and we will keep you up to date on developments in Tax News.

In Irish news, Revenue has confirmed that ERR (Enhanced Reporting Requirements) will go ahead from 1 January 2024, and has published updated guidance on the small benefit exemption. In UK news, earlier this week HMRC introduced restrictions to the types of queries dealt with on its Self-Assessment and Agent Dedicated Line helplines, and a technical consultation has been launched on draft regulations for Making Tax Digital for income tax. In International news, the European Commission has concluded negotiations with Norway to update the EU-Norway VAT agreement.  Ireland  Revenue has confirmed that ERR (Enhanced Reporting Requirements) will go ahead from 1 January 2024. The Institute, under the auspices of the CCAB-I, wrote last week to the Minister for Finance to ask that he reconsider the implementation of Enhanced Reporting Requirements (ERR) for employers. Revenue has updated the Tax and Duty Manual that provides guidance for the Small Benefit Exemption. UK Earlier this week HMRC introduced restrictions to the types of queries dealt with on the Self-Assessment and Agent Dedicated Line helplines; HMRC has launched a technical consultation on draft regulations for Making Tax Digital for income tax. International The European Commission has concluded negotiations with Norway to update the EU-Norway VAT agreement. 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.

Revenue has updated the Tax and Duty Manual that provides guidance for fund administrators regarding the calculation of tax due on income and gains from investments in domestic investment undertakings and the completion of prescribed declaration forms.  The manual has been updated to make reference to the Pan-European Pension Product (PEPP) provisions introduced by section 21 Finance Act 2022. References to Approved Minimum Retirement Funds (AMRFs) have been removed, reflecting Finance Act 2021 amendments.  Other updates include:  updated contact information for Large Corporates Division; and  clarification that section 189 relief does not extend to the estate of an individual upon death, who during their lifetime was entitled to section 189 relief.  Further information is available in eBrief no.255/23. 

The Department of Enterprise, Trade and Employment has published the new national minimum wage rates that come into effect on 1 January 2024. The hourly rate for employees aged 20 and above will be €12.70. Further details on rates and conditions are available here. 

In the lead up to the 2022/23 online self-assessment (“SA”) filing deadline next month on 31 January 2024, HMRC are introducing restrictions which begin today on their SA and Agent Dedicated Line (“ADL”) helplines. Chartered Accountants Ireland has been discussing this with HMRC and would welcome your feedback on the operation and impact of these restrictions which come after similar restrictions in the lead up to the 2021/22 SA filing deadline, and restrictions to both the self-assessment helpline and the ADL earlier this year.   More information on the current restrictions are available in an email from HMRC which also sets out details of a change implemented from 7 December in respect of how repayments are notified.   Helpline restrictions  Between 11‌‌‌ ‌‌December 2023 and 31‌‌‌ ‌‌January 2024, HMRC are prioritising resource “to support self-assessment peak period”. The restrictions aim to direct anyone with a query which can be dealt with online to the relevant online service.   For agents, ADL advisers will only take calls about SA filing, payments or repayments and will be redirecting agents to use online tools for simple queries, wherever possible. This also means that agents with queries on other topics, including PAYE queries will need to use other contact channels for assistance. Agents can continue to use the SA digital assistant for all SA queries throughout this period.   Agents who call the ADL and whose queries are not specifically related to SA filing, payments, or repayments, including agents with multiple client queries, will be redirected to alternative channels, or asked to call back in February. During SA peak, the ADL will not be dealing with any PAYE-related calls, however such queries may still be directed to the Employer Helpline, where relevant.  Repayment notifications  From 7 December HMRC changed the process for notification of electronic SA repayments. There is no change to the repayment process itself, hence taxpayers will still receive any refund via their bank account. However, HMRC will no longer send a letter informing the taxpayer or their agent of the repayment as often these letters arrive after the repayment has been made, leading to confusion and increased contact.  HMRC is currently working on improvements to its IT systems in relation to SA repayment notifications and as a result has temporarily paused SA repayment digital notifications from 7 December 2023 while this is completed. HMRC will confirm when these are reinstated. 

With November being the most important month of the year for tax receipts, the Minister for Finance noted that the recent November Exchequer figures indicate “fiscal performance broadly in line with expectations to end-November, corporation tax recovers in key month”. The Exchequer surplus stood at €5.4 billion, to end-November, a decline of almost €7 billion in comparison with the same period last year. The decline reflects the transfer of €4 billion to the National Reserve Fund and increases in public expenditure.   November is a VAT-due month, it is the deadline for self-employed income tax payments, and the month in which the largest payments are made for corporation tax. Total tax receipts for the month of November amounted to €15.6 billion, €2 billion higher than November 2022.  Corporation tax receipts in November amounted to €6.3 billion, which is €1.3 billion, or almost 27 percent higher than November last year. This is broadly in line with expectations.  Income tax receipts were €2.1 billion, or 7.3 percent, ahead of their end-November 2022 position and reflect continued strength in the labour market.  VAT receipts to end-November are €1.6 billion, or 8.6 percent, up on the same period last year.  Commenting on the figures, the Minister for Finance, Michael McGrath T.D. said:  “The end-November Exchequer returns confirm that we are, broadly speaking, where we expected to be at this point in the year. The growth in income tax and VAT receipts we have seen over the course of the year points to the fundamental resilience of our economy despite all the external challenges we are facing.  The stand-out feature of the November performance is, of course, corporation tax: after three months of decline, a large increase in receipts this month means this revenue stream is once again comfortably ahead of last year.  However, it is crucial to place this in context. While corporation tax is now 4 per cent ahead of 2022, it is clear that the era of persistent over-performances is coming to an end.  The volatility in this revenue stream highlights the importance of ensuring that permanent fiscal commitments are not made on the basis of temporary receipts. Instead, the establishment of the two new long-term savings vehicles (the Future Ireland Fund and the Infrastructure, Climate and Nature Fund) will use these windfall corporation tax to help finance known future fiscal challenges, such as an ageing population, climate change and digital transition.” 

As a result of the changes to Making Tax Digital (“MTD”) for income tax, details of which were published at the 2023 Autumn Statement, HMRC has published draft regulations (and associated notices) for consultation. The consultation is open until 12 January 2024. By way of reminder, MTD for income tax will be mandated from 6 April 2026 for unincorporated businesses and landlords with turnover over £50,000, whilst those with turnover over £30,000 are mandated from 6 April 2027. The turnover between £10,000 and £30,000 population are not currently mandated, however HMRC has advised that the position in relation to these smaller businesses and landlords is still under review.  The draft regulations amend the Income Tax (Digital Requirements) Regulations 2021 which provide the statutory legislative framework for MTD for income tax.   Amendments included in the draft regulations and notices reflect recent government decisions included within the outcome of the MTD small business review. They also reflect the government announcement in December 2022 on the introduction of the phased mandation schedule for MTD for income tax.  The following specific changes are reflected in the draft regulations:-  the revised MTD mandation dates and thresholds announced in December 2022;  changes which aim to improve the design of quarterly updates;  the removal of end of period statements;  easements for landlords with jointly owned property; and  exemptions for specific groups.  This a technical consultation, focused on ensuring that the draft regulations and notices achieve their intended policy purpose. Please contact makingtaxdigitalconsultations@hmrc.gov.uk if you have any questions on the draft regulations and notices. Responses to the consultation should also be submitted to the same e-mail address.  Last week HMRC also published a media article on MTD for income tax which aims to raise awareness across a broad audience. The article is a part of the Guardian newspaper’s ‘Business Transformation’ pull-out. In addition, a new video was also launched featuring MTD’s new Programme Director, Craig Ogilvie.  

This week we bring you news of the government’s response to the Treasury Committee’s report which outlined the need for a review of tax reliefs and it's response to the same Committee’s report into venture capital tax reliefs is also available. We also update you on the removal of the functionality to copy existing VAT clients across to the Agent Services Account (“ASA”) and HMRC has issued an important reminder in its Company Tax Return Guide about the procedures to follow when making loss carry-back claims in corporation tax returns. And finally, guidance has now been published on the digital DIY Housebuilders Scheme which launched on Tuesday 5 December and which we told you about in last week’s Miscellaneous updates.  Update - removal of functionality to copy existing VAT clients to the ASA   In our Miscellaneous updates of 11 September, we advised that from October 2023 HMRC intended to remove the functionality that allowed agents to copy existing VAT clients to their ASA. We have now been advised that this change has not yet taken place and has been delayed to an unspecified date. We understand that this is due to technical complexities.  In the interim, agents are still encouraged to prepare for the removal of this functionality in due course by ensuring that existing VAT clients are copied across as soon as possible. Once this functionality is removed, VAT clients will need to be authorised using the digital handshake authorisation route available in the ASA.   Reminder: corporation tax loss carry-back claims in corporation tax returns  HMRC has issued an important reminder to companies and agents about the procedures to follow when making loss carry-back claims in corporation tax returns (“CT600”).   If the CT600 includes a loss carry back claim, you must tick box 45 to show that a repayment for an earlier or prior accounting period is due and you must supply a breakdown of the claim in your computations showing how losses are to be used. Failure to do so will result in HMRC being unable to process the claim.  The reminder includes confirmation that such claims do not of themselves require an amended return for the period in which the losses are utilised. Therefore, if making a loss carry back claim, you should not:-  submit an amended CT600 tax return for the same accounting period that does not include new information; or  submit an amended CT600 tax return for the period in which the losses are being used; or  submit an original CT600 tax return by post — all returns should be submitted online through the Government Gateway portal.  However, the above does not apply if an amended return covers other matters and is not solely in relation to the loss carry back claim, or if the loss carry back claim itself requires amending.  Resubmitting the original loss carry-back claim will also increase the time taken for HMRC to review and process this.  Further information on completing the CT600 tax return is available in the Company Tax Return guide.