From investing in HMRC’s ability to manage tax debts, to construction industry scheme reforms, to tougher consequences for promoters of tax avoidance, we outline below the key announcements in this area. Disappointingly, no additional investment was made to tackle HMRC’s ongoing poor service levels. HMRC debt management capability   The Government is investing a further £163 million with the aim of improving HMRC’s ability to manage tax debts. The aim of this is “to allow HMRC to better distinguish between those who can afford to settle their tax debts, but choose not to, from those who are temporarily unable to pay and need support.”   HMRC will also be expanding its debt management capacity to “support both individual and business taxpayers out of debt faster and collect debts that are due”.   Construction Industry Scheme (“CIS”) reform to gross payment status  The Government is introducing reforms in the Autumn Finance Bill 2023 to the CIS which will add VAT to part of the Gross Payment Status (“GPS”) compliance test. The objective is to give HMRC more power to remove GPS immediately in cases of suspected fraud. Alongside this, the Government also announced simplifications to other aspects of the scheme, which will be subject to technical consultation.   Promoters of tax avoidance   Legislation is included in the Autumn Finance Bill 2023 to introduce tougher consequences for promoters of tax avoidance schemes. These include a new criminal offence for those who continue to promote avoidance schemes after receiving a notice requiring them to stop, and a new power enabling HMRC to bring disqualification action against directors of companies involved in promoting tax avoidance, including those who control or exercise influence over a company. These changes will take effect from the date of Royal Assent of the Autumn Finance Bill 2023.   Improving the data HMRC collects    As previously announced, the Autumn Finance Bill 2023 includes legislation that will require employers, company directors, and the self-employed to provide additional data to HMRC. These changes will take effect from the tax year 2025/26. 

A range of VAT measures featured from VAT relief to energy saving materials, to the treatment of private hire vehicles.  Reforms to Energy-Saving Materials   Following a call for evidence, the Government intends to expand the VAT relief available on the installation of energy-saving materials by extending the relief to additional technologies, such as water-source heat pumps, and bringing buildings used solely for a relevant charitable purpose within scope.   As a result of the Windsor Framework, these reforms will be implemented UK-wide in February 2024. Full details on these reforms will be published shortly.  Private hire vehicles   The Government will consult in early 2024 on the impacts of the July 2023 High Court ruling in Uber Britannia Ltd v Sefton MBC.   This case considered the regulation of Uber's business model outside of London, and specifically whether the private hire vehicle operator is acting as a principal when entering into a contractual obligation with the passenger to provide the journey. This potentially has VAT consequences in terms of whether the private hire vehicle operator is acting as a principal or an agent for the purposes of charging VAT.  VAT retail export scheme   The Government continues to review the rules of this scheme and thanks industry for submissions on the scheme and the associated airside scheme (tax-free shopping). The Government will continue to accept representations and will consider any new information carefully alongside broader data.   Sanitary products   The scope of the current VAT zero rate relief on women’s sanitary products is being extended to include reusable sanitary underwear from 1 January 2024. 

The main Autumn Statement 2023 publication contained details throughout of a range of measures and changes which did not specifically feature in the Chancellor’s main speech. We summarise these below. The Government will tackle the long-standing problem of “small pot” pensions and intends to launch a call for evidence on a lifetime provider model which would allow individuals to have contributions paid into their existing pension scheme when they change employer, providing greater agency and control over their pension. This call for evidence will also examine a potential expanded role for collective defined contribution schemes in future. The Government will also introduce the multiple default consolidator model to enable a small number of authorised schemes to act as a consolidator for eligible pension pots under £1,000;  As confirmed by HM Treasury in October, the Government will legislate to extend the Enterprise Investment Scheme and Venture Capital Trusts to 2035 hence they will not end as originally intended on 5 April 2025;  The Government is currently reviewing responses to the consultation on taxation of environmental land management and ecosystem service markets and will respond in due course;  The Growth Market Exemption, which provides relief from Stamp Duty and Stamp Duty Reserve Tax, is being extended to include smaller, innovative growth markets. This extension will also increase the threshold for the market capitalisation condition that is used within the exemption from £170 million to £450 million. These changes are included in the Autumn Finance Bill 2023 for implementation from 1 January 2024;   The offshore receipts in respect of intangible property (“ORIP”) rules are being abolished in respect of income arising from 31 December 2024. This repeal will be legislated for in a future Finance Bill, and will take place alongside the introduction of the Pillar Two Undertaxed Profits Rule, which aims to more comprehensively discourage the multinational tax-planning arrangements that ORIP sought to counter;   Exempting legislation is included in the Autumn Finance Bill 2023 to exempt from corporation tax compensation payments made under the Historical Shortfall Scheme, Group Litigation Order schemes, Suspension Remuneration Review or Post Office Process Review Scheme. This draft legislation aligns the taxation of onward payments of compensation to that of individual recipients;  Further to the publication of draft legislation on 18 July 2023, the Government is making amendments to the rules for Real Estate Investment Trusts which aim to enhance the competitiveness of the regime. The changes will take effect from the date of Royal Assent of the Autumn Finance Bill 2023, and will apply to accounting periods ending on or after 1 April 2023, or, where relevant, will be deemed to have always had effect;  The annual chargeable amounts under the Annual Tax on Enveloped Dwellings regime will be increased in 2024/25 in accordance with September 2023’s CPI figure of 6.7 percent. The Government will implement this change in the usual way through a Treasury Order;  There will be no changes to the van benefit charge and the car and van fuel benefit charges in 2024/25 hence these will remain at their 2023/24 levels;   Vehicle excise duty (“VED”) rates for cars, vans and motorcycles will increase from 1 April 2024 in line with inflation. To support the haulage sector, the VED rates for HGVs and the HGV levy will both remain unchanged from their 2023/24 rates in 2024/25;  Alcohol duties were frozen until 1 August 2024 with the annual increase decision also delayed to the Spring Budget 2024 in order to give businesses time to adapt to the new duty system introduced on 1 August 2023;  Duty rates on all tobacco products increased by RPI plus 2 percent from 6pm on 22 November 2023 and are included in the Autumn Finance Bill 2023. To reduce the gap with cigarette duty, the rate on hand-rolling tobacco increased by RPI plus 12 percent;   The Gross Gaming Yield bandings for gaming duty are frozen from 1 April 2024 until 31 March 2025;   The Government will consult shortly on proposals to bring remote gambling (meaning gambling offered over the internet, telephone, TV, and radio) into a single tax, rather than taxing it through a three-tax structure;   The Government will legislate so that, where the substantive decision to proceed with a project to create a new electricity generation station or expand an existing generating station is made on or after 22 November 2023, receipts from that new generating station or additional capacity will not be subject to the Electricity Generator Levy;  The Government is legislating in the Autumn Finance Bill 2023 to increase the Plastic Packaging Tax rate in line with CPI, from 1 April 2024, to £217.85 per tonne. To ensure the Plastic Packaging Tax continues to incentivise the use of recycled plastic in packaging, an evaluation plan will also be published by the end of the year in order to gather further evidence to inform the future trajectory of the rate and recycled plastic content threshold;   The Government will increase the Aggregates Levy rate in line with RPI, from 1 April 2025 to £2.08 per tonne; and  A technical change is being made to section 660 of the Income Tax (Earnings and Pensions) Act 2003 in the Autumn Finance Bill 2023, to ensure that the legislative reference to the Scottish Government’s Carer Allowance Supplement is correct. 

This week we bring you news about the need to include an agent reference number on P87 forms (employment expenses claims) and marriage allowance claim forms from 26 February 2024 and the VAT DIY housebuilder’s scheme is going digital from tomorrow, Tuesday 5 December. The UK and other jurisdictions recently announced their intention to implement the OECD’s Crypto-Asset Reporting Framework. HMRC is seeking feedback on its Annual Report publication and the latest advisory fuel rates which apply from 1 December are also available. And finally, the latest news and information bulletin from HMRC is available.  Change to P87 and marriage allowance forms from February 2024   Agent Update 114 recently confirmed that from 26‌‌‌ ‌‌February 2024, paid tax agents submitting form P87 (claims for relief from employment expenses) and marriage allowance claims on behalf of clients will be required to provide the agent reference number when submitting the forms if the agent wishes to receive the related repayment.   If the agent reference number is not provided, the related repayment will be paid to the taxpayer and not the agent, even if the repayment has previously been nominated to be paid to them. This change is part of HMRC’s continuing drive to protect taxpayers from the behaviours of certain repayment agents.  VAT DIY housebuilder’s scheme to go digital  As announced in the 2023 Spring Budget, the Government is legislating to digitise the VAT DIY housebuilders’ scheme from tomorrow, Tuesday 5 December. However, we understand that paper based claims will also remain possible if the digital process cannot be used. The time limit for making claims is also to be extended from three to six months after completion of the build.   By way of reminder, this scheme allows DIY housebuilders to reclaim VAT incurred and paid by them on building materials for any part of a house build which they undertake themselves and is also available to individuals converting a non-residential building into their own home.   The legislation to make these changes was laid recently. The associated Statutory Instrument  and tax information and impact note are as follows:-   The Value Added Tax (Refunds to “Do-It-Yourself” Builders) (Amendment of Method and Time for Making Claims) Regulations 2023; and  VAT: Digitisation of claims and extending time limit for DIY Housebuilders Scheme.   HMRC will be publishing new guidance when the changes go live tomorrow.  HMRC Annual Report  HMRC publishes its Annual Report and Accounts each year in July and want to make sure it's as helpful as possible to those who read it.  They would like feedback on how you use the Annual Report. Does it contain the information you need? Is it well presented and easy to read and find what you're looking for? How could it be improved? By taking a few minutes to complete this short form and give HMRC some feedback on their Annual Report and Accounts, you can help HMRC to make its performance reporting more accessible and effective. 

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. HMRC has also issued an email about the first phase of its Border Targeted Operating Model which takes effect in just under ten weeks, and will impact on movements of goods from Ireland to Great Britain. The email contains important details of actions which need to be taken and how to prepare for these changes. Miscellaneous guidance, publications etc.   The following updated guidance, and publications relevant to EU exit are available:-  Customs, VAT and excise UK transition legislation from 1 January 2021;  Reference documents for The Customs (Reliefs from a Liability to Import Duty and Miscellaneous Amendments) (EU Exit) Regulations 2020;  Reference Document for The Customs (Origin of Chargeable Goods) (EU Exit) Regulations 2020;  Reference document for authorised use: eligible goods and authorised uses;  Trade Specialised Committee on Goods;  Joint statement from the Specialised Committee on Financial Provisions, 26 October 2023; and  EM on Windsor Framework customs arrangements. 

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. HMRC is also holding webinars which aim to explain its compliance professional standards. A webinar is also being held tomorrow (Tuesday 5 December) on the National Minimum Wage in the care sector.  Compliance and professional standards  HMRC is holding webinars which aim to explain its compliance professional standards. The webinars are scheduled for the following dates and times and will be recorded and available to view thereafter:-  8 December 2023 - 13:45; and  15 December 2023 - 15:45.  National minimum wage   HMRC’s National Minimum Wage team are holding a live webinar to talk through common issues found in the care sector, and how employers can protect their workers’ rights. There will also be a panel of experts on hand to answer questions on the topic - register here. 

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. 

In a new report, the European Commission analyses the solidarity contribution applied on the unexpected surplus profits for the fossil fuel industry which arose during the 2022 energy crisis. The report sheds light on market developments in the fossil fuels sector covered by this emergency intervention since the measure was adopted in autumn 2022.

The  OECD is running a public consultation to develop an alternative definition of permanent establishment for activities in connection with the exploration and exploitation of extractible natural resources. The changes put forward in this discussion draft are expected to be included in the next update to the OECD Model and its Commentary. The consultation closes on 4 January 2024.

In Irish news, the Government announces increases to PRSI and the Minister for Finance commences various amendments to the KEEP scheme. In UK news, read our more in depth coverage of the 2023 Autumn Statement from a personal and business taxes perspective. In International news, the OECD publishes research which shows that companies in high-tax jurisdictions make up a significant proportion of companies with low effective tax rates.   Ireland  1.   The Government has agreed to increase PRSI for employers, employees and the self-employed from October 2024. 2.   The Minister for Finance, has commenced the four amendments to the Key Employee Engagement Programme (KEEP) as introduced in Finance Act 2022, following receipt of approval of State aid from the European Commission.  UK 3.   Read about the personal taxes elements of the 2023 Autumn Statement. 4.   There were also various business taxes announcements which you can read about in more detail.  International 5.   OECD paper suggests high-tax jurisdictions produce over half of low-taxed companies    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.  

The Minister for Finance, Michael McGrath TD, has welcomed the publication by the European Commission of its Opinion on Ireland’s Draft Budgetary Plan (DBP), finding it to be in line with the recommendations adopted by the Council in July.  Minister McGrath said:  “I welcome the Commission’s opinion that Ireland’s Draft Budgetary Plan is in line with the fiscal guidance provided by the European Council in July’s Country-Specific Recommendations.  The Commission’s findings underline that budgetary policy must not lose sight of the importance of a prudent approach over the medium-term - we must ensure fiscal sustainability so that we are best placed to react to the highly uncertain and evolving environment.  We face significant challenges through the requirement to decarbonise our economy and the need to manage the digital transition. At the same time, publications by my Department have shown that the growth rate is set to slow over the medium- and longer-term, driven by demographic changes.  Such developments show the importance of planning for the future now. With this in mind, the Government announced the establishment of the Future Ireland Fund and the Infrastructure, Climate and Nature Fund as part of last month’s Budget. These important policy instruments will help current and future generations address the fundamental structural challenges we face and work is intensifying on bringing these initiatives to fruition.”