In this week’s miscellaneous updates, we provide an update on various issues relevant to agents and the latest VAT road fuel charges which apply from 1 May 2024 are available. HMRC has updated its guidance on taking reasonable care and a new online service has been launched for payment of voluntary national insurance contributions. HMRC has been writing to community amateur sports clubs asking them to check that they remain eligible, and the latest Agent Update 119 is now available. And finally, a new consultation has been launched on vaping products duty.  Update for agents   HMRC has recently set up a new service which means that agents to can make a complaint to HMRC online via the government gateway. The complaint can cover their own agent services or be made on behalf of a client. It is no longer necessary to complain via post and agents are encouraged to make complaints going forward via this new service. Agents will need to have the relevant authorisation to act on behalf of their clients recorded with HMRC before using it. New functionality has now been added to the Agent Services Account which now allows agents to change contact details online. Changes can be made to their postal address, email address, business name and phone number. See the updated guidance.  A new service for agents was also launched last month which also allows agents to register employment benefits which will be taxed through payroll from 2025/26 onwards in advance of the move to mandatory payrolling of benefits. Find out what the PAYE for Agents online service is for, what you can do in the service and how to do it. To access this service, the agent must opt in to use the employer liabilities and payments service.   You can use this service to tell HMRC about any employment benefits that will be taxed through your client’s payroll from 2025/26 including:  mileage and motoring expenses;  private medical expenses; and  relocation expenses.  By way of reminder for all tax years up to 2025/26, i.e. until 2024/25, the employer or their agent must continue to submit P11Ds for benefits and expenses that have not been payrolled.  Reasonable care guidance  HMRC has republished its guidance on how to make sure you take reasonable care if you need to send tax returns and other documents to HMRC, and what happens if you do not.  If you do not take reasonable care HMRC will charge penalties for inaccuracies.  HMRC will take your individual circumstances into account when considering whether a taxpayer has taken reasonable care. If the taxpayer has used tax avoidance arrangements, there are different rules about what ‘reasonable care’ is.  HMRC’s Compliance Handbook shows a list of the taxes and documents that penalties for inaccuracies apply to, as well as details of the dates on which these penalties can first apply.  Launch of digital service for voluntary National Insurance contributions  The Government recently launched a new online service for checking if voluntary National Insurance contributions (“NICs”) will increase the amount of state pension. The new digital service is called Check your State Pension forecast and is a joint service by HMRC and the Department for Work and Pensions, which is a fully end-to-end digital solution.  The service will show taxpayers by how much their state pension could increase and details of the voluntary NICs they would need to pay to achieve this. It allows most people under state pension age to view gaps in their NICs record and securely pay voluntary contributions to fill those gaps if it will benefit them. Confirmation that payment has been received and that their NICs record will be updated will also be provided. Individuals can access the Check your State Pension forecast or use the HMRC app.  It is usually only possible to make voluntary NICs for the previous six tax years. However, an extension is currently in place which allows individuals to fill gaps in their NICs record for periods from the tax year 2006/07 up to 2017/18 by making voluntary contributions by 5 April 2025.   Letters to community amateur sports clubs  In recent weeks HMRC has been writing to community amateur sports clubs (“CASC”) asking them to check if they are still eligible to stay within the scheme and avail of its benefits.  To be eligible for the scheme a CASC must:  be open to the whole community - this means that membership and facilities should be open to all without discrimination;  have affordable membership fees  be organised on an amateur basis  have no limit to the number of players a club can pay, as long as the total amount paid to all players is less than £10,000 in a year  have as its main purpose to provide facilities for eligible sports and encourage people to take part.  not exceed the income limit of £100,000 a year from non-member trading and property income;  be managed by ‘fit and proper persons’;  meet the location condition, where the scheme is open to qualifying clubs established in the UK, EU, Liechtenstein, Norway, or Iceland.  If a club still meets the conditions of the scheme, no further action is needed. However, if a club no longer meets the conditions for CASC status, HMRC must be contacted to explain the reasons why it is no longer eligible for the scheme and the date eligibility ended. This can be done by emailing CPCECLPICASC@hmrc.gov.uk or writing to the address at the top of the letter. HMRC will then contact the clubs to discuss the options available.  Latest Agent Update  Agent update: issue 119 is available now. Get the latest guidance and information which this month includes:-  the national insurance contributions checker tool and rate changes reminder;  reporting rules for digital platforms – digital reporting service;  Capital gains tax - common mistakes to avoid;  Research and development tax relief changes from 1 April 2024; and  An update on the VAT DIY housebuilders scheme.   

HMRC has published Revenue and Customs Brief 5/24 Tour Operators’ Margin Scheme for business to business (B2B) wholesale supplies which sets out a change in treatment as a result of a recent Tribunal decision. The ‘non-established taxable person’ (“NETP”) section of its VAT registration manual has also been updated.  TOMS Brief 5/24  The TOMS is a mandatory VAT accounting scheme for businesses involved in certain travel services. Under TOMS, tour operators cannot recover VAT on services they buy but only account for VAT on their profit margin.   As set out in the brief, HMRC’s previous policy on B2B wholesale supplies has now changed following a recent First Tier Tribunal case. This means that tour operators may opt out of TOMS for these supplies. This change is effective immediately. As a result, HMRC’s VAT Notice 709/5 has also been updated to reflect this new policy.  NEPT guidance updated HMRC has recently updated its guidance in the NETP section of its VAT registration manual. The updated guidance is merely a refresher and does not change existing policy. It includes:  A general improvement to overall content and language;  A new page on transfers of a going concern;  A new page on overseas sellers and online marketplaces;   Information on the reverse charge and low value consignments of goods; and  Removal of redundant pages and various references to outdated processes. 

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. The House of Lords Sub-Committee on the Windsor Framework (“WF”) has opened a new inquiry which is examining strengthening Northern Ireland’s voice in the context of the WF and the Committee has also raised concerns about the future supply of veterinary medicines to Northern Ireland. HMRC has also issued a reminder that there are now just a few weeks until the 4 June deadline for making export declarations via the Customs Declarations Service (“CDS”) instead of CHIEF.  Future supply of veterinary medicines to Northern Ireland  The House of Lords Sub-Committee on the Windsor Framework has written to the Northern Ireland Office Minister raising serious concerns about the future supply of veterinary medicines to Northern Ireland.   The Committee recently concluded its inquiry into the potential consequences of the EU Veterinary Medicinal Products Regulation taking effect in Northern Ireland at the end of December 2025, when the grace period is due to end.   Witnesses who appeared in front of the Committee are concerned about the additional costs this would entail for producers and have provided evidence that this could affect the economic viability of supplying the small Northern Ireland market with estimates suggesting that over 30 percent of veterinary medicines could be discontinued for Northern Ireland under the rules.   The Committee is also highlighting the link between animal and human health. Serious concerns have been raised about the potential consequences for public health in Northern Ireland and on the island of Ireland if access to certain veterinary medicines is lost.   The Chair of the Sub-Committee, said, “We are stressing the need for a positive and swift outcome within what is a tight timescale complicated by upcoming elections in the EU and UK.”  Exports to move to CDS by 4 June  A reminder Press Release was published last week reminding businesses that by 4 June, all export declarations must be made via the CDS. Traders can register for CDS via GOV.UK. The 4 June deadline has been moved several times.   According to the Press Release, the CDS provides businesses with a more user-friendly, streamlined system with greater functionality. It has been running since 2018 for import declarations and more than 117 million customs declarations have already been submitted through CDS.  HMRC is working closely with the border industry and directly contacting all declarants and traders to urge them to access the available support now and transfer over to CDS.  Businesses with customs agents should ensure their agent is ready to use CDS. Those without a customs agent must prepare to make their own declarations using software that works with the system.  Miscellaneous updated guidance etc.   Recently updated guidance and publications relevant to EU exit are set out below:  Internal temporary storage facilities (ITSFs) codes for Data Element 5/23 of the Customs Declaration Service;  Authorised Consignee Temporary Storage (ACTS) location codes for Data Element 5/23 of the Customs Declaration Service;  Designated export place (DEP) codes for Data Element 5/23 of the Customs Declaration Service;  Maritime ports and wharves location codes for Data Element 5/23 of the Customs Declaration Service;  CDS Customs Clearance Request Completion Instructions for Inventory Exports;  Find payroll software that is recognised by HMRC; and  CDS Declaration Completion Instructions for Exports. 

The European Commission is seeking feedback on Directive 2011/16 EU on administrative cooperation in the field of direct taxation, or the Directive for Administrative Cooperation (DAC) as it is also known. The call for evidence is part of an overall evaluation of the DAC and is required under Article 27(1) of the DAC. The feedback window closes on 30 July 2024.

Last week, the Institute, under the auspices of the CCAB-I, responded to the Department of Finance’s feedback statement on the Strawman proposal for a participation exemption for foreign dividends. The Institute has been calling on the Government to introduce legislation establishing a territorial basis of taxation in Ireland. The Strawman proposal is the next step in this process. While we welcome this step in the process, we continue to call on the Government for a similar feedback statement on a participation exemption for foreign branch profits. You can read our full response here. Below, we summarise our main points for consideration in advance of finalising the legislation: We recommend that there is no minimum ‘opt-in’ period. Where a company receives a distribution from an in-scope territory, then the default position should be that the distribution is exempt. The dividend exemption should apply to distributions received from companies located in any jurisdiction other than those on the EU list of non-cooperative jurisdictions for tax purposes. Ideally, we would prefer that there is no geographic limitation on the participation exemption. Alternatively, the exemption could be disapplied where the payor company is located in a no-tax/zero-tax jurisdiction or, where the jurisdictional tax rate is less than 9% (borrowing from the OECD Subject-to-Tax rule). We recommend that the reference to “voting rights” is removed. This should not be a condition of the foreign dividend exemption. A bona fide test is not required as it introduces an unnecessary layer of complexity. The existing anti-avoidance provisions in Irish tax law are sufficiently robust. The relief should be available for income distributions received on or after 1 January 2025, i.e. there should be no reference to accounting periods.

Revenue has confirmed that, as of 9 May 2024, almost 90 percent of the €1.65 billion debt warehoused at the beginning of April 2024 has either been paid in full, secured under phased payment arrangements (PPAs), or included within a PPA which is in the process of being finalised. The balance of warehoused debt not paid or included in a PPA is €200 million. Revenue has issued circa 11,700 demands to taxpayers with warehoused debts exceeding €500.  Revenue data confirms that 775 taxpayers (10 percent) have outstanding liabilities in excess of €50,000, amounting to €130 million, with a further 3,670 (30 percent) owing between €5,000 and €50,000. The remaining 60 percent (7,279) of taxpayers owe between €500 and €5,000. The demand notice outlines the tax(es) due by the taxpayer and requests they engage with Revenue to formulate a payment plan within seven days. Continued non-engagement will result in the issue of a final demand at the end of the seven-day period and the warehoused debt will immediately be subject to standard enforcement proceedings. Revenue has acknowledged the high level of engagement from businesses and their agents throughout the duration of the Debt Warehouse Scheme and, in particular, in the lead up to the 1 May 2024 deadline, and will continue working with businesses to finalise payment plan applications which are currently in progress.

Representatives from Revenue’s Collector General’s Division (CG), attended the Oireachtas Joint committee on Enterprise Trade and Employment to discuss the Small Companies Administrative Rescue Process (SCARP). Revenue re-iterated its commitment to being a constructive participant in SCARP, reflected by a dedicated team within CG for all SCARP related queries. Further information is available on data.oireachtas.ie.

Revenue has updated the Tax and Duty Manual which provides guidance on determining which instruments can be treated as equivalent to an Additional Tier 1 instrument. Under the CRD IV (Capital Requirements Directive and Capital Requirements Regulation) Tier 1 capital, the primary funding of a bank, is made up of two components, one of which is Additional Tier 1 (‘AT1’) capital. The CRD IV sets out the features that an AT1 capital instrument must possess. Section 845C TCA 1997 provides clarity on the tax treatment of AT1 capital instruments and other substantially similar or ‘equivalent’ instruments. This manual explains the implications of section 845C in relation to certain capital instruments.

In Irish news, April Exchequer figures show solid tax revenues and Revenue provides an update on the Debt Warehousing Scheme. In UK news, HMRC has published updated guidance on tax relief for travel expenses and the new UK carrier scheme for the movement of consumer goods from Great Britain to Northern Ireland from 30 September has been launched. In International news, the joint OECD-UN initiative, Tax Inspectors Without Borders, has published its annual report.  Ireland  1.   Revenue has provided an update regarding payment arrangements agreed to address warehoused debt. 2.   April Exchequer results show solid tax revenues.  UK 3.   In this week’s miscellaneous updates, read about the updated guidance published by HMRC on tax relief for travel expenses. 4.   This week’s EU exit corner features the launch of the new UK carrier scheme which will provide authorisation to move post and parcels to consumers in Northern Ireland from Great Britain from 30 September 2024.  International 5.   The joint OECD-UN initiative, Tax Inspectors Without Borders, has published its annual report.  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. 

in this week’s miscellaneous updates, HMRC has clarified the rules for tax relief on travel expenses in the context of hybrid and flexible working and the Government is holding events over the next few weeks to discuss changes to the tax rules for those who are UK tax resident but not UK domiciled. HMRC’s latest schedule of live and recorded webinars for tax agents is available for booking. and the Labour party has published details of its plans to close the tax gap. HMRC has advised that there is likely to be delays in the provision of information to calculate overlap relief for the transitional tax year for basis period reform 2023/24 and finally, the latest News and Information Bulletin from HMRC is available.  Tax relief on travel expenses  HMRC recently updated its guidance on ordinary commuting and private travel in order to provide clarity on the rules for hybrid and flexible working. The guidance has had a new section added at 3.39.   Essentially the updated guidance confirms that there is no change in treatment – where an employee works from home on a flexible or hybrid basis, this will not be treated as a base office. The employee will still have a base office meaning that journeys from home to that location are still ordinary commuting and do not qualify for tax relief.  Events to discuss changes to non-domiciled taxation  In the Spring Budget on Wednesday 6 March, the Chancellor announced that from 6 April 2025, the remittance basis for UK tax resident but non-UK domiciled individuals will be replaced by a new tax regime. The concept of domicile as a connecting factor in the tax system will be replaced by a system based on tax residence.  Over the course of the next few weeks, the UK Government is holding a series of in person and online events for stakeholders to provide comments on the proposed changes. Anyone wishing to attend an event should register their interest - details of the events are available on GOV.UK.  Labour Party’s tax plans to close the tax gap  The Labour Party recently published its plan to close the tax gap in the event that it becomes the next government. The plans set out how the party would:-  boost HMRC’s compliance activities to tackle non-compliance;   invest in technology transformation to improve the taxpayer’s experience and reduce the tax gap; and   make legal changes to restore a genuine deterrent to tax evasion.   Disappointingly, the plans do not refer to increasing HMRC’s customer service resources.  Labour has also appointed an expert panel to advise it on how to improve compliance and modernise HMRC. The panel includes Sir Edward Troup, former HMRC Permanent Secretary and former Treasury special adviser on tax and Bill Dodwell, former tax director of the Office for Tax Simplification.  Delays in obtaining overlap details from HMRC  The tax year 2023/24 is a transition year as part of basis period reform. As a result, unused overlap relief brought forward must be used in 2023/24. From 2024/25, all unincorporated businesses will be assessable on the tax year basis.  Chartered Accountants Ireland previously recommended that HMRC develop a service to enable taxpayers to calculate their unused overlap relief where that information was not available to them. This service commenced from September 2023 with requests being able to be made for information from HMRC via an online service. Not surprisingly, HMRC has recently seen a spike in demand for this service and has now issued a warning in the most recent agent update that requests are likely to take longer to fulfil. 

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 Officer Borders bulletins are also available. Ahead of the next phase of the Windsor Framework which commences from 30 September 2024 for the movement of consumer parcels from Great Britain (“GB”) to Northern Ireland (“NI”), HMRC has published guidance on the new UK carrier scheme which will be used to provide authorisation to move such parcels. The UK’s Domestic Advisory Group has published various updates, including a request for new members. And finally, HMRC has sent a reminder email about the benefits of joining the UK Internal Market Scheme which provides authorisation to allow trusted traders to declare eligible goods 'not at risk' when moving them from GB to NI.  The UK carrier scheme   HMRC has published guidance on how to apply for the UK carrier scheme which will be used to provide authorisation to move consumer parcels from Great Britain to Northern Ireland when the next phase of the Windsor Framework takes effect from 30 September 2024. Carriers will first need to check if they can apply for the scheme which will also require an EORI number starting GB or XI.  Proof of a permanently established Northern Ireland business address will also be needed. If a business is not established in Northern Ireland, the address of the indirect customs representative in Northern Ireland will instead be required. Proof of business address in Great Britain will also be needed.  Applications for authorisation are now open. More information is available in the guidance as follows:-  Apply for the UK Carrier Scheme;  Sending parcels to and from Northern Ireland; and  Check if you can apply for the UK Carrier Scheme.  UK Domestic Advisory Group (“DAG”) update  The UK DAG’s Priorities report has been published and is accompanied by the following statement from its Executive Council which sets out the report’s key messages:-  “Key messages   The UK Trade and Cooperation Agreement (“TCA”) DAG representing businesses, trade unions and civil societies, has published its first report.   The report highlights short-term TCA implementation issues, priorities for the forthcoming review of the TCA and opportunities to develop the agreement further.   The UK DAG is calling on the EU Commission and UK Government to heighten their engagement and regulatory cooperation on a range of issues including the energy and climate change obligations set out in the TCA, Level Playing Field commitments, trade and customs facilitation, and business and labour mobility matters, including on using e-gates and pragmatic implementation of the EU’s Entry Exit Scheme.”  The UK Government is inviting expressions of interest by 19 June 2024 to join the UK DAG. Chartered Accountants Ireland is currently a DAG member. New applicants and existing members will be considered against the same eligibility criteria. Applicants in this campaign will be notified after the current expression of interest exercise has closed.   Miscellaneous updated guidance etc.   Recently updated guidance, and publications relevant to EU exit are set out below:-  Customs, VAT and excise UK transition legislation from 1 January 2021;  Reference Document for The Customs Tariff (Establishment) (EU Exit) Regulations 2020;  Reference Document for The Customs (Origin of Chargeable Goods) (EU Exit) Regulations 2020;  Reference documents for The Customs (Reliefs from a Liability to Import Duty and Miscellaneous Amendments) (EU Exit) Regulations 2020;  Reference document for authorised use: eligible goods and authorised uses;  Reference Documents for The Customs (Tariff Quotas) (EU Exit) Regulations 2020;  Border Force customs offices list;  Declare your goods to authorised use and completing authorised use; and  Moving processed or repaired goods into free circulation or re-exporting them. 

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.