This week we look at the most recent Agent Update and HMRC’s latest News and Information Bulletin has been published. The VAT zero rate for energy savings materials is being extended from February 2024 and the latest HMRC performance reports have been published. And finally, updated guidance has been published on claiming for R&D tax relief.  Agent Update  Agent Update: issue 116 is available. Get the latest guidance and information including:-  the new National Insurance tool for employees;  the tax treatment of Horizon Shortfall Scheme compensation payments for postmasters  the 2022/23 Self-Assessment deadline;  changes to paternity leave and pay; and  a reminder on repayment agent registration.  VAT zero rate for energy savings materials   A recently published policy paper confirms that the VAT zero rate is to be extended to more energy saving materials (“ESMs”) and will take effect from 1 February 2024.  Installations of ESMs in residential accommodation currently benefit from a temporary VAT zero rate until 31 March 2027, after which they revert to the reduced rate of VAT at 5%.  This measure extends the relief to installations of ESMs in buildings used solely for relevant charitable purposes, such as village halls or similar recreational facilities for a local community.   It also expands the scope of the relief to the following technologies:-  electrical batteries that store electricity generated by certain ESMs and from the National Grid (the grid);  water-source heat pumps; and  diverters that enable excess electricity from certain ESMs to be used within a building in which it is generated rather than exported to the grid.  Certain preparatory groundworks that are necessary for the installation of ground- and water-source heat pumps will also qualify.  R&D tax relief  HMRC has published the following updated guidance on claiming R&D tax relief:-  Submit information to support your claim for R&D Corporation Tax reliefs; and  Tell HMRC that you’re planning to claim Research and Development (R&D) tax relief by making a claim notification. 

At a meeting of the TALC ERR subgroup last week, Revenue provided insight into one aspect that is causing some ERR submissions to be rejected. Files that have been converted to XML/JSON format before submission will be rejected if they contain blank data fields. Where employers are converting ERR files before submission, they must ensure that all data fields have content. A video on converting CSV files to JSON is available on Revenue’s website. Errors and rejections encountered by employers and agents should reported to Revenue via the National Employer Helpline (NEH).  In terms of penalties Revenue confirmed that none will apply for the period to the end of June 2024. From 1 July 2024, normal compliance rules will return.   As of last week, Revenue has reported that over 18,000 submissions with a value of €30 million have been made to mid-January. Revenue intends hosting additional information webinars on ERR which are expected to run until the end of February 2024.   Feedback on issues or problems you experience with the new ERR reporting regime can be emailed to the Institute and we will continue to engage with Revenue through the TALC forum. We will keep you up to date on developments in Tax News. 

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 and Cabinet Office Borders bulletins are also available. And finally, this week, the House of Lords Windsor Framework Committee has received a response from the Government on the implications of EU exit for public procurement and the Committee has launched an inquiry on veterinary medicines  Miscellaneous updated guidance etc.   Recently updated guidance, and publications relevant to EU exit are set out below:-  Amend or cancel simplified import declarations;  Making a Final Supplementary Declaration;  Making a late supplementary declaration;  Data Element 2/3: Document and Other Reference Codes: Licence Types – Imports and Exports of the Customs Declaration Service (CDS);  Data Element 2/3: Documents and Other Reference Codes (Union) of the Customs Declaration Service;  Claim a waiver for duty on goods that you bring to Northern Ireland from Great Britain or countries outside the UK and EU;  Check if you can bring your goods into Northern Ireland from Great Britain without paying duty;  Report payments and view your allowance for non-customs state aid and customs duty waiver claims;  Commercial importers, certified traders and tax representatives — EU trade in duty paid excise goods (Excise Notice 204b);  CDS Declaration Completion Instructions for Imports;  The Trade Specialised Committee on Customs Cooperation and Rules of Origin;  Reference Documents for The Customs Tariff (Preferential Trade Arrangements) (EU Exit) Regulations 2020;  Reference document for authorised use: eligible goods and authorised uses;  Reference documents for The Customs (Reliefs from a Liability to Import Duty and Miscellaneous Amendments) (EU Exit) Regulations 2020;  Reference Documents for The Customs (Tariff Quotas) (EU Exit) Regulations 2020;  Notices made under s32A of the Taxation (Cross-border Trade) Act 2018;  Appendix 2: DE 1/11: Additional Procedure Codes of the Customs Declaration Service (CDS)  CHIEF: customs procedure codes; and  CDS Declaration Completion Instructions for Exports. 

Revenue has published a new Tax and Duty Manual to provide guidance to filers submitting the annual VAT Return of Trading Details (RTD). Information is provided on the completion of the return, amending an RTD, compliance measures and addresses specific queries raised about VAT RTD filing.  

In Irish news, Institute representatives attended the first meeting of the TALC Simplification subgroup and Revenue has updated the guidance for returns by employers in relation to reportable benefits under the Enhanced Reporting Requirements. In UK news, in its response to the consultation on the updated draft Making Tax Digital (“MTD”) for Income Tax Legislation, the Institute once again reiterates the need for a higher exemption limit, and this week’s miscellaneous updates features the concerns of the Administrative Burdens Advisory Board in relation to MTD.  Ireland Institute representatives, under the auspices of the CCAB-I, attended the first meeting of the TALC Simplification subgroup last week. Revenue has released the 2023 ROS Form 11. Revenue has updated the guidance for returns by employers in relation to reportable benefits under the Enhanced Reporting Requirements (ERR) which came into effect on 1 January 2024.   UK Read the Institute’s response to the latest MTD consultation on the updated draft legislation. This week’s miscellaneous updates features the 2023 Annual Report of the Administrative Burdens Advisory Board which looks at MTD for Income Tax amongst other issues.     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.

As previously reported, taxpayers have until 1 May 2024 to agree a Phased Payment Arrangement (PPA) with the Irish tax authorities to repay tax debt held within the Debt Warehousing Scheme.  However, some changes to the scheme are expected following comments last week from Minister for Finance, Michael McGrath TD, as he urged businesses to engage with Revenue. The remarks follow reports that businesses in certain sectors will face difficulties in repaying the warehoused debt. Revenue’s stated priority is to assist taxpayers in addressing the payment of their warehoused debts as flexibly as possible and are encouraging taxpayers to engage with officials now to address the debt position.  The Institute will keep members apprised of any updates via Tax News. The Debt Warehousing Scheme is currently in Period 3, running from 1 January 2023 to 1 May 2024, with interest accruing at 3 percent per annum on the unpaid debt. The 3 percent interest charge will be incorporated into the PPA for its duration. Where there is no PPA, the interest will be charged retrospectively.   Taxpayers are reminded that while they have until 1 May 2024 to agree a PPA with Revenue, they can make interim payments during this period, and also request for the offset of any refunds owing against the balance of tax warehoused.   Revenue has prepared a number of ‘How to” videos in relation to the PPA process which are now available on the Revenue website (link to videos).   The Institute will continue to keep members updated via Tax News.

Following the extension to 31 December 2025 of the scheme for accelerated capital allowances for energy-efficient equipment, as provided for in section 285A TCA 1997, Revenue has updated the relevant Tax and Duty Manual. 

Following amendments made in Finance (No.2) Act 2023, Revenue has updated the Tax and Duty Manual which provides guidance on the income tax exemption of certain profits from the microgeneration of electricity by an individual their main residence.   Section 216D TCA 1997 provides for an exemption from income tax, USC and PRSI for certain profits arising to a qualifying individual from the microgeneration of electricity. Finance (No.2) Act 2023 increased the exempt amount from €200 to €400 and extended the scheme to 31 December 2025.   There is no requirement for individuals to include the exempt profits in an income tax return, but where the annual profit exceeds the exempt amount, that excess must be declared and will be subject to income tax, USC and PRSI under Schedule D Case IV. 

Revenue has updated the Tax and Duty Manual that provides guidance on the Interest Limitation Rule (ILR). The updated manual includes a new section 15 which addresses the interaction of ILR and foreign currencies. 

Revenue has updated the Tax and Duty Manual that provides procedures for valuing property for Tax and Duty purposes. The updated guidance outlines the revised processes for obtaining independent property valuations for Tax and Duty purposes, including referral to the Valuation Division of Tailte Éireann. 

Revenue has updated the Tax and Duty Manual for returns by employers in relation to reportable benefits under the Enhanced Reporting Requirements (ERR) which came into effect on 1 January 2024.   The updated guidance contains information about the service for compliance approach to be taken by Revenue to support businesses with the regime until 30 June 2024 as set out in a press release. During this time, Revenue will not be operating any compliance programmes in relation to the ERR and will not seek to apply any penalties for non-compliance.   The revised guidance also prescribes the reporting period, the form, and other particulars or documents that will apply in regard to reportable benefits. 

Following the commencement of the enhanced reporting requirements for employers (ERR), Revenue has updated the Tax and Duty Manual in respect of the  Income Tax (Employments) Regulations 2018. The updated manual reflects the changes made as a result of the Income Tax (Employments) Regulations 2024 S.I No.1 of 2024, effective from 4 January 2024.  This Institute, under the auspices of CCAB-I will continue to engage with Revenue on ERR and will keep members updated on operational developments.   The regulations have been amended to include definitions specific to ERR. Further amendments address the requirements:  to use an employment identifier for each employee where the employee’s PPSN is available;  to notify Revenue of the relevant particulars of the payment/benefit on or before the provision of any reportable benefit to an employee;  to retain all documents and records relating to the provision of a reportable benefit to an employee for a period of six years after the end of the year to which they refer.  Further information is available in eBrief no.011/24.