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. 

In response to the consultation on the draft updated MTD for Income Tax legislation, the Institute took the opportunity to highlight its ongoing concerns in relation to this project, including the need to uplift the exemption limit. In addition, the lack of available software and small numbers currently participating in the trial are worrying. The Institute’s Northern Ireland Tax Committee was responding to the consultation opened last month into the draft legislation which has been updated to reflect the changes announced in December 2022 and as part of the Small Business Review in November 2023.  Key recommendations also featured in the Institute’s response include the following:- HMRC should seek to develop the detailed guidance on MTD for Income Tax after a period of consultation with stakeholders - this should contain practical worked examples/case studies of different scenarios and should carefully distinguish between the digital recording keeping requirements and functional compatible software requirements;  This guidance should be published in a timely manner in advance of the commencement date;  HMRC should work at pace and aim to publish the final MTD for Income Tax legislation, associated notices, and more detailed guidance as a matter of urgency;   The tax year from which new sources of trading or property income falling within MTD for Income Tax should be reported should be amended to the next tax year after acquiring that new source of income;   The quarterly filing deadline should be set as the seventh day of the next month to align with the VAT return filing deadline;   Unincorporated businesses should be able to move out of MTD for Income Tax in the next tax year where, turnover has fallen below the exemption limit and by a significant percentage; and   HMRC should undertake a detailed matching exercise to remove any anomalies so that quarterly update information matches that reported on the relevant self-assessment returns for trading and property income. 

As previously advised, Revenue has launched a public consultation on modernising Ireland’s VAT administration, seeking stakeholder feedback regarding Business to Business (B2B) and Business to Government (B2G) VAT reporting supported by mandatory e-invoicing. Revenue has extended the consultation period from 12 January to Wednesday, 31 January 2024.  The Institute, under the auspices of the CCAB-I, is responding to this consultation. Members wishing to provide input can email us.  

This week we bring you the news that the 2023 annual report of the Administrative Burdens Advisory Board “Better tax for better business” highlights its concerns in relation to Making Tax Digital for income tax. The notes from the most recent meeting of the Wealthy External Forum meeting which was held in October 2023 are available; Chartered Accountants Ireland is represented on this forum by a member firm. The OECD Inclusive Framework has released the third set of Pillar 2 administrative guidance and HMRC has confirmed that donations to charities of crypto assets do not qualify for gift aid tax relief.   Administrative Burdens Advisory Board “Better tax for better business” report   The 2023 annual report of the Administrative Burdens Advisory Board “Better tax for better business” was published last month. Amongst other items, the report highlights Making Tax Digital for income tax (“MTD for ITSA”) as a priority area and in particular, that testing via the trial “will be mission critical for MTD ITSA, which is a far more complex proposition than MTD for VAT.” Overall, the Board concludes that time is short, and many challenges remain.  The Board is also concerned about the emerging climate and messaging used by HMRC this year which discourages taxpayers from calling HMRC helplines. Although it has some sympathy with HMRC in trying to encourage taxpayers to do some basic research and checking themselves, rather than always calling HMRC helplines, restrictions on helplines need to be carefully considered and designed when there is so much that taxpayers (and HMRC) can still find difficult and make mistakes with during tax administration activities. HMRC need to work towards a system where helpline support is there for genuine difficulties - which in turn means improving guidance. The Board is also keen to continue exploring where there is further scope to simplify and modernise the tax system.  OECD Pillar 2 administrative guidance   The updated guidance released last month includes the below items. Clarifications for the transitional Country-By-Country reporting safe harbour as follows:- Purchase price accounting adjustments in financial accounts;  Various calculation and application issues; and  A rule that requires adjustments to the tested jurisdiction’s profit before tax and income tax expense with respect to certain hybrid arbitrage arrangements.   Clarifications for the application of other aspects of the GloBE rules as follows:-  Calculation of the €750 million revenue threshold;  Mismatch between Fiscal Years of UPE and another Constituent Entity;   Mismatch between Fiscal Year and Tax Year of a Constituent Entity;  Further guidance on the allocation of Blended CFC Taxes;   Transitional Filing Deadlines for MNE Groups with Short Reporting Fiscal Years; and  A simplified Calculation Safe Harbour for Non-Material Constituent Entities.   According to an email from HMRC, it is the UK’s intention to ensure that this latest guidance is reflected in the UK Pillar 2 legislation. HMRC has also asked us to draw your attention to the release of additional draft HMRC guidance on which views are welcome by email.   Donations to charities of crypto assets  HMRC has recently updated its guidance on gift aid which confirms that donations of crypto assets do not qualify for gift aid relief. This is on the long-held view of HMRC that such assets are not currency or money. Should the crypto assets be converted into ‘money’ and then donated to the charity, then this may qualify for gift aid tax relief if the relevant conditions are met. 

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. From 2027, a carbon pricing mechanism for imports will be implemented in the UK to support decarbonisation and the Institute is meeting with HMRC next week to discuss the Import One Stop Shop rules and welcomes any member questions in advance. We briefly update you on the impact of the Retained EU Law (Revocation and Reform) Act 2023 (“REUL Act 2023”) and the introduction of the first elements of the UK’s Border Target Operating Model which commence from the end of this month.   Retained EU Law update  As a result of the REUL Act 2023, from 31 December 2023, circa 600 pieces of retained EU law were repealed. The Government’s first report on the status of REUL is due to be published by 22 January 2024. This is expected to include a summary of the data on the REUL dashboard, and is expected to include progress and future plans. Reports are due to be published every six months until June 2026. The House of Commons Library has also published a useful briefing on the new powers available to the Government under the REUL Act 2023.  Border Target Operating Model (“BTOM”)  The UK government has published a set of communication assets to support the readiness of traders and has been sharing these assets with UK and EU traders in preparation for the first phase of its BTOM which commences later this month.   These communication assets include:- Border control posts leaflet for plant and plant products;  Composite products decision tree;  Health certificates guide;  Import notifications guide; and  Phytosanitary certificate guide.  BTOM training sessions for traders are being held online throughout January. What changes are coming on 31 January 2024?   The introduction of health certification on imports from the EU of medium risk which are as follows:- animal products;  plants;   plant products;   the introduction of health certification on imports from the EU of high-risk food and feed of non-animal origin; and  the introduction of new checks and controls when moving Irish goods (i.e., any goods other than qualifying Northern Irish Goods) which are moved from Irish ports directly to Great Britain.  The Government has also set out three actions which can be taken to prepare for these changes:-   Know your risk-category – use these online tools to find the risk category of your commodity;  Ensure that your EU supply chain is preparing to provide you with health certificates and/or phytosanitary certificates – find out more here; and  Be ready to correctly submit your pre-notification via the Import of products, animals, food, and feed system (“IPAFFS”) – attend a January training session and read the import notifications guidance.  Sign up for the Defra Traders/Exports Newsletter for updates relating to the BTOM   Miscellaneous updated guidance etc.   Below we highlight recently updated guidance, and publications relevant to EU exit which this week includes the UK Government’s responses to various customs related consultations:-  Customs, VAT and excise UK transition legislation from 1 January 2021;  Reference Documents for The Customs Tariff (Suspension of Import Duty Rates) (EU Exit) Regulations 2020;  Reference Documents for The Customs Tariff (Preferential Trade Arrangements) (EU Exit) Regulations 2020;  Bringing goods into the UK temporarily;  Apply to use simplified procedures for import or export (C&E48);  Apply to operate a customs warehouse;  Apply to use simplified declarations for exports;  The future of customs declarations;  Transit newsletters — HMRC updates; and  Introducing a voluntary standard for customs intermediaries. 

The Institute, under the auspices of the CCAB-I, made representations on behalf of members at the first meeting of the Tax Administration Liaison Committee (TALC) Simplification subgroup last week. The subgroup, made up of representatives from Revenue, the CCAB-I, the Irish Taxation Institute and the Law Society, was established on the direction of the Minister for Finance to “identify any opportunities to simplify and modernise the administration of business supports”. Other business groups representative of Irish small and medium enterprises (SMEs) will be invited to contribute with a view to identifying perceived administrative issues and obstacles that deter SMEs from availing of business reliefs.  CCAB-I will inform members via Tax News of all relevant updates. 

We have compiled the latest updates to various HMRC VAT publications, briefs, and guidance. Readers should note that there are also numerous updates to VAT guidance and rules due to the UK’s departure from the EU. Claim a VAT refund as an organisation not registered for VAT;   Late payment interest if you do not pay VAT or penalties on time;   Pay the VAT due on your One Stop Shop VAT Return;  People involved in transactions connected with VAT fraud;  Partial exemption (VAT Notice 706);  Health professionals and pharmaceutical products (VAT Notice 701/57);  Updates on VAT appeals;   Charity funded equipment for medical and veterinary uses (VAT Notice 701/6);  Insolvency (VAT Notice 700/56);  Apply to join the VAT Flat Rate Scheme;   Motoring expenses (VAT Notice 700/64);  VAT on goods exported from the UK (VAT Notice 703);  Register for VAT if you make relevant acquisitions into Northern Ireland;  VAT Government and Public Bodies;  Claim a VAT refund as an organisation not registered for VAT; and  Register for VAT by post. 

Revenue has released the 2023 ROS Form 11, which will be updated on an ongoing basis to include additional prefilled information from third parties. It intends to issue an updated version in early February 2024 to facilitate claims for the mortgage interest tax credit.   In conjunction, Revenue has published a Tax and Duty Manual which addresses change to the ROS Form 11 from 2022 on the following matters:  Professional services withholding tax (paragraph 3.1),  Non-resident landlord withholding tax (paragraph 4.1),  Non-refundable foreign tax panel for employees/directors (paragraph 5),  Employments not subject to PAYE (paragraph 6.1),   Remote working relief (paragraph 6.2),  Social welfare payments (paragraph 6.3),   Lump sums from relevant (foreign) pension arrangements (paragraph 6.4),  Transborder relief (paragraph 7.1),   Personal tax credits (paragraph 8), and  Extracts from accounts (appendix 1).  The manual also outlines some misunderstandings that arise in completing the capital gains tax section (paragraph 10). A summary of prefilled information in included in appendix 2.  

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.