The Parliamentary Budget Office (PBO) has published a briefing paper on Budgetary Issues in the Finance (No.2) Bill 2023. The paper provides an analysis of measures contained in the Finance Bill (No.2) 2023 that the PBO believes could have a budgetary impact, and includes an overview of these measures, including information on possible cost, policy background and policy impact. Where possible, the PBO has endeavoured to provide information on the cost or yield of a measure or a policy change as estimated by the Department of Finance. Amendments to the Finance Bill arising out of last week’s Committee Stage are due for consideration at Report Stage the week commencing Monday 20 November. The briefing paper is based on the Bill as published and does not account for forthcoming amendments.

In early October, the Institute responded to the House of Lords Finance Bill Sub-Committee’s inquiry into draft Finance Bill 2023/24. As the Committee has now accepted this as evidence, the submission is available to read in the Tax Representations section of our website. The Institute’s submission was focused on two specific areas of concern in the draft Finance Bill:- The proposal to restrict the geographical scope of agricultural property relief and woodlands relief for inheritance tax to UK land and property only from 6 April 2024 – in August the Institute wrote to the Financial Secretary to the Treasury on the same issue; and  The proposal to potentially merge the UK’s SME and “large” company R&D tax relief regimes from 1 April 2024.    You can read the Institute’s recommendations in relation to both of these areas in the submission. 

Revenue has published an updated Tax and Duty Manual which provides guidance regarding returns by employers in relation to reportable benefits.   As previously reported, from 1 January 2024, employers will be required to report to Revenue the payment of travel and subsistence, the remote working allowance, and benefits provided under the small benefit exemption at the time or before the payment is made.  While the Institute notes the publication of guidance for employers regarding Enhanced Reporting Requirements, it remains concerned with the short timeframe given to employers to implement the measures and other matters set out in a letter to the Minister for Finance last month.

In this week’s EU exit corner, we bring you the latest guidance updates and publications relevant to EU exit. The latest Trader Support Service bulletin is also available in addition to the most recent Cabinet Office Borders bulletin which recently returned from a break. The Minister of State has written to the Chair of the House of Lords Protocol Sub-Committee providing an update the on the implementation of the Windsor Framework (“WF”) and this Committee has recently launched a new inquiry into regulatory divergence and the WF. Miscellaneous updated guidance etc.   The following updated guidance, and publications relevant to EU exit are available:-  Check if a business holds Authorised Economic Operator status;  Apply to use Simplified Import VAT Accounting;  CDS Declaration Completion Instructions for Exports;  Split consignments: Tariff classification and import procedures;  Known error workarounds for the Customs Declaration Service (CDS);  Apply for an Advance Tariff Ruling;  Data Element 2/3 Documents and Other Reference Codes (National) of the Customs Declaration Service (CDS);  Additional Information (AI) Statement Codes for Data Element 2/2 of the Customs Declaration Service (CDS);  Customs Declaration Completion Requirements for The Northern Ireland Protocol;  Customs Declaration Service (CDS) waiver codes for imports replacing 999L;  Authorisation type codes for Data Element 3/39 of the Customs Declaration Service; and Split consignments: Tariff classification and import procedures.

The Finance (No.2) Bill 2023 as amended in Committee Stage has been published. The amendments include draft legislation for the exemption from leasing of farmland and a new capital gains tax relief for investment in innovative enterprises (angel investors). Section 664 TCA 1997 provides a relief from income tax from leasing of farmland. The proposed amendment will impose a 7-year holding requirement in respect of purchases of farmland on or after 1 January 2024, thereby restricting the availability of the income tax relief so that it does not become immediately available to such purchasers of farmland. The new capital gains tax relief for angel investors is to attract investment for Irish SMEs. It will allow early-stage investors avail of a reduced rate of capital gains tax, where the qualifying investment has been held for a minimum of three years prior to disposal. There is a lifetime limit of €3 million on gains that may avail of the reduced rate. The Report Stage of the Bill is scheduled for 21 and 22 November 2023. We will keep you updated in our weekly newsletter.

HMRC recently continued its communication campaign on Pillar 2. In the UK, Pillar 2 will have effect in respect of in-scope groups’ accounting periods beginning on or after 31 December 2023. Letters to businesses are being sent to the Large Business (“LB”) population in addition to Wealthy and Mid-sized Business (“WMB”) taxpayers. The continuation of the communication campaign also includes letters to agent representatives, and articles in both the November 2023 Agent Update and HMRC Stakeholder Digest.   According to HMRC, steps have been taken to expand the avenues which correspondence is being issued to and HMRC is also encouraging potentially affected taxpayers to sign up to receive digital correspondence in future if they have not already done so.  The specific activity being undertaken commenced at the end of last month and is as follows:-  From Monday 30 October, letters began to issue to LB taxpayers that had not signed up to receive email updates;  From Friday 3 November, a bulk email was then issued to LB and WMB taxpayers, and to agents and representatives bodies who had signed up to receive email updates;  From Monday 6 November, letters began to issue to any remaining WMB taxpayers who had not previously signed up. 

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.  

The extended phoneline hours this week for the ROS Technical Helpdesk, Business Taxes (Income Tax) and the Collector General’s Division (including ROS Payment Support) to support filers of ROS Form 11 and IT38 are available here. The phonelines will be open until 8pm on Monday and Tuesday. The ROS Technical Helpdesk and Business Taxes (Income Tax) phonelines will remain open until midnight on Wednesday, 15 November 2023, with the Collector General’s Division phoneline open until 8pm.

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 Minister for Finance intends to introduce an amendment at Report Stage of the Finance (No. 2) Bill 2023 to provide that, where individual General Practitioners (GPs) enter into General Medical Service (GMS) contracts with the HSE and provide those services in the conduct of a partnership profession with other individual GPs, that income can be treated for income tax purposes as income of the partnership. The proposed amendment, which the Institute under the auspices of the CCAB-I, has lobbied extensively for, reverses the proposal to treat such income as solely income of the individual partner from 1 January 2024. While the proposed amendment is subject to Cabinet approval, Revenue has published a revised Tax and Duty Manual to provide guidance on the correct tax treatment of income received by medical practitioners under the GMS contract entered into with the HSE, taking into account the proposed amendment. While the proposed amendment does not extend to employed GPs, we are pleased to see the change as it relates to individual partners. Readers will be aware that  CCAB-I, has engaged extensively with Revenue and the Department of Finance on this matter over the last two years. For further information see eBrief no.237/23.

In Irish news this week, Revenue publishes a summary of useful tips ahead of the upcoming income tax filing deadline and the October Exchequer figures show a further decline in corporation tax revenues. In UK news, HMRC has confirmed that the date from which it will no longer accept paper VAT registrations, except in limited cases, is next Monday, 13 November 2023 and in our miscellaneous updates this week, read about HMRC writing to agents in respect of potential discrepancies in 2021/22 self-assessment returns. In International news, the OECD is hosting a virtual event to mark Tax Certainty Day 2023. Ireland Revenue has published ROS Pay and File tips in advance of the personal tax extended deadline of Wednesday 15 November 2023. October Exchequer figures show a further decline in corporation tax revenues. UK HMRC has confirmed that it will no longer accept paper VAT registrations, except in limited cases, from next Monday, 13 November 2023. HMRC is writing to agents in respect of potential discrepancies in 2021/22 self-assessment returns. International The OECD is hosting a virtual event to mark Tax Certainty Day 2023. 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.