News

Revenue has advised there is currently an issue affecting the submission of Form CT1 2025 returns via third-party software. The issue is being dealt with as a matter of priority and a resolution is scheduled for today.

The Minister for Finance has recently issued a press release confirming that the poultry broiler sector will be removed from the VAT Flat-Rate Addition scheme from 1 September 2025. The decision follows advice from the Revenue Commissioners and the Department of Finance that overcompensation is occurring within the sector.  Farmers whose turnover exceeds the relevant thresholds and who are impacted by the change will need to register for VAT if they wish to reclaim VAT on their inputs. The flat-rate addition scheme is designed to reimburse non-VAT registered farmers for the VAT incurred on inputs used in their farming operations. This is achieved by allowing the farmer to add a flat-rate percentage (currently 5.1percent) to the price charged on supplies to a VAT registered person.  EU legislation permits the use of a flat-rate scheme for farmers, with a key condition of the scheme is that it must not lead to farmers being overcompensated for VAT incurred by them on business related expenses. According to the press release, a Revenue investigation in 2018 determined that there was a significant amount of overcompensation occurring in the poultry sector. After a further review over the last 18 months, it has been confirmed that this overcompensation is still occurring. The press release outlines that any queries can be directed to Revenue at the following email address; businesstaxesregistrations@revenue.ie.

Revenue has updated its guidance on Relevant Contracts Tax: Relevant Operations clarifying the treatment of RCT on contracts involving both the construction of property and the sale of land. The guidance also sets out how RCT applies to the deployment of a temporary installation on a site. The updated guidance states that where a contract includes both construction services and the supply of land, only the construction services’ element is subject to RCT. The construction services are also liable to VAT on a reverse charge basis. RCT and the VAT reverse charge do not apply to the consideration for the sale of the land. Where the contract provides for a single consideration covering both the construction services and the sale of the land, the consideration needs to be allocated proportionally by the principal.

Revenue has updated its guidance in Waiver of exemption: Transitional Measures following the High Court judgment in Killarney Consortium C v Revenue Commissioners [2024] IEHC 732. The guidance confirms that from 20 December 2024, any cancellation amount resulting from the cancellation of a waiver will not be collected by Revenue. Prior to the introduction of the new system for VAT on property (from 1 July 2008), leases were divided into short leases (those for a period of less than 10 years) and long leases (those for a period of 10 years or more). In general, short leases were exempt from VAT, but a landlord could waive this exemption. Although no new waivers could commence from 1 July 2008 onwards, pre-existing waivers remained valid for a property which had been acquired by the lessor before that date. Furthermore, if a waiver was subsequently cancelled, the legislation included a clawback mechanism requiring a repayment to Revenue of any input VAT claimed in excess of output VAT paid under the waiver. The waiver cancellation provisions were the focus of the Killarney Consortium case, whereby the consortium contended that EU VAT law does not impose a clawback solely because the level of input VAT deducted exceeds the output VAT paid. The High Court, in upholding the decision of the Tax Appeals Commission, held that the waiver cancellation in these circumstances was contrary to EU law and the principle of fiscal neutrality. The court affirmed that where a business is fully engaged in taxable supplies it is entitled to deduct input VAT on purchases made for the purposes of those taxable supplies.

Revenue has issued an eBrief confirming that revised REIT forms are now available on the Revenue website. REITs with accounting periods ending between 1 January 2025 and 31 December 2025 are required to file an annual statement (Form REIT 3) on or before 28 February 2026. Links to the revised Form REIT3 and the updated Forms REIT1, REIT2, REIT 2A are included in the eBrief.

Last week, the Economic and Social Research Institute (ESRI) published its Quarterly Economic Commentary. In the press release which accompanied the publication, the ESRI refers to the ongoing strength and expansion of the Irish economy but also highlights the downward revisions to global growth forecasts due to the uncertainty caused by the changing position on tariffs. Unemployment is expected to remain low at just over 4 percent across the forecast horizon with real wage growth of 3.5 percent forecasted in 2025 and 2.3 percent in 2026. The ESRI reported total tax revenues continue to perform well, however, corporate tax revenues are lower in the first five months of this year compared to January to May 2024. In an overall assessment, the ESRI highlighted three key concerns: the status on tariffs, the influence of windfall corporate revenues on the public finances and the number of housing completions. 

The latest UK tax tidbits features updated guidance in a wide range of areas. Employment intermediaries reporting requirements, Check if you're an employment intermediary, How to get an agent code for Corporation Tax or Self-Assessment, Agent authorisation: apply using HMRC paper forms, Updating your tax agent contact details with HMRC, Claim a refund of Construction Industry Scheme deductions if you're a limited company or an agent, Help with the Apprenticeship Levy and Employment Allowance — connected entities — GfC10, Check genuine HMRC contact that uses more than one communication method, Change in bonus rates for Save As You Earn (SAYE) share option schemes, Tell HMRC about a transferor or settlor who is domiciled outside of the UK (D31), Tell HMRC about a transferor or settlor who is not a long-term UK resident (D31a), Tell HMRC about a transferor or settlor who is a long-term UK resident, when transitional provisions apply (D31b), Check employment status if you work in hair and beauty, Find software suppliers for the Construction Industry Scheme (CIS), Your responsibilities under money laundering supervision, Check genuine HMRC contact that uses more than one communication method, Extra Support Team, Compliance checks: The Human Rights Act and penalties — CC/FS9, CC/FS72 DSC1 Corresponding with HMRC by email, Check if an email you've received from HMRC is genuine, Named tax avoidance schemes, promoters, enablers and suppliers, Issue briefing: Loan charge letters, Help with charitable giving on your Self-Assessment tax return, List of approved professional organisations and learned societies (List 3), Payroll Giving agencies approved by HMRC, Air Passenger Duty and connected flights, Gilt-edged securities exempt from Capital Gains Tax, Check the status of tax policy consultations, Check if a business is registered for money laundering supervision, Appeals reviews and tribunals guidance, Alternative Dispute Resolution Guidance, Named tax avoidance schemes, promoters, enablers and suppliers, Check if a business is registered for money laundering supervision, Make a subject access request to HMRC, Inheritance Tax: return of estate information (C5 (OUK) (2006)), Set up a limited company: step by step, Warning for agency workers and contractors who are moved between umbrella companies (Spotlight 71), Tell HMRC about the end of a qualifying interest in possession (IHT100b), and Report Climate Change Levy subsidies to HMRC.  

Revenue has recently updated three other Tax and Duty Manuals. The updated manuals relate to the taxation of children’s pensions; the taxation of short term and occupational illness benefits and guidance on permanent health benefit schemes. Details are set out below. The guidance on the taxation of children’s pensions payable under pension schemes has been updated to confirm that any additional Jobseeker’s benefit (self-employed) or Jobseeker’s pay related benefit amounts received for dependent children are not assessable on the parent or guardian. The updated guidance on the taxation of Short-Term Illness Benefit and Occupational Injury Benefit confirms that the Department of Social Protection provides relevant claim details to Revenue allowing them to update an employee’s tax credits and rate band. The guidance on the relief for contributions to Permanent Health Benefit schemes and the taxation of benefits received has been updated to provide additional details on claiming the relief. The contact details for the relevant branch within Revenue dealing with these schemes are also included in the manual.

In this week’s post EU exit corner, we bring you the latest guidance updates and publications relevant in the post EU exit environment. The most recent Trader Support Service bulletin is also available as is the most recently published Brexit and Beyond newsletter from the Northern Ireland Assembly EU Affairs team. HMRC has also confirmed that the implementation of CERTEX has been delayed from 28 June 2025. Delay to the implementation of CERTEX  CERTEX, the system that will verify licence data on declarations for goods movements which will replace the Automatic Licence Verification System (ALVS) for Northern Ireland, was due to commence from 28 June 2025. Last week we were advised that it has not been implemented from that date and that a new implementation date has not yet been set. Any actions traders may need to take depends on whether they are moving goods from Great Britain to Northern Ireland or from the Rest of the World to Northern Ireland. However, they should continue to follow standard processes for controlled goods in Northern Ireland, including reporting for inspections where required to do so.   Moving goods from Great Britain to Northern Ireland  Note that this delay does not affect the use of the new Common Health Entry Document (CHED) reference format on traders’ declarations which must be used from 28 June 2025. The reference format is letters followed by numbers and includes the full stop character, for example, 'CHEDA.XI.2025.1234567'.  From 28 June 2025, declarations using the existing format (e.g. ‘GBCHD2025.1234567’) will not be rejected, however HMRC is encouraging traders to use the new format in readiness for the implementation of CERTEX at a later date.  Traders will not receive CERTEX specific messages for these movements in the Customs Declarations Service (CDS) so they must continue to monitor the Goods Vehicle Movement Service (GVMS) at GVMS locations or the respective inventory system at inventory locations. For detailed guidance, please visit GOV.UK.  Moving goods from Rest of World to Northern Ireland   This delay means traders must not use the new Common Health Entry Document (CHED) format on their declarations from 28 June 2025. They must continue to use the existing format found in Appendix 5a, for example, ‘GBCHD2025.1234567’.  If they have pre-lodged any declarations using the new format these must be changed before arrival on the CDS. Failure to use the correct CHED format will result in rejections or holds on goods once the goods arrive and potential delays in getting the goods released. Traders should continue to monitor CDS for any ‘ALVS’ messages.  HMRC will provide further information in due course and has confirmed that the processes for making a declaration or obtaining a licence remain unchanged. It has also been confirmed that HMRC’s guidance on C085 still stands; no changes are being made to this. For support for goods in movement, contact the Department of Agriculture and Rural Affairs on 0300 200 7852 or email daera.helpline@daera-ni.gov.uk. For general support with freight movements, traders can contact the Trader Support Service team, or call the HMRC Customs and International Trade helpline on‌‌‌ 0300‌‌‌ 322‌‌‌ 9434‌‌‌ (textphone 0300‌‌‌ 200‌‌‌ 3719).   For support with parcels movements, traders can contact their parcel express operator. Please note this change does not impact express operators moving consumer parcels under the UK Carrier Scheme.   Miscellaneous guidance updates and publications This week’s miscellaneous guidance updates and publications are as follows: Data Element 2/3: Documents and Other Reference Codes (Union) of the Customs Declaration Service, Search the register of customs agents and express operators, Data Element 2/3: Documents and Other Reference Codes (National) of the Customs Declaration Service (CDS), Maritime ports and wharves location codes for Data Element 5/23 of the Customs Declaration Service, External temporary storage facilities codes for Data Element 5/23 of the Customs Declaration Service, Software developers providing customs declaration software, Known error workarounds for the Customs Declaration Service (CDS), Authorisation type codes for Data Element 3/39 of the Customs Declaration Service, Reading notes for Declaration Category Data Sets: CDS Declaration and Customs Clearance Request Instructions, CDS Declaration Completion Instructions for Exports, Appendix 1: DE 1/10: Requested and Previous Procedure Codes of the Customs Declaration Service (CDS), CDS Declaration Completion Instructions for Imports, Appendix 21: Import Declaration Category Data Sets, and 4-digit to 3-digit procedure to additional procedure code correlation matrix for imports.

The Directorate-General for Taxation and Customs Union has published the 2025 edition of the Annual Report on Taxation. The report presents an indicator-based analysis of the design and performance of Member States’ tax systems. It aims to provide policymakers across the EU with insights that can help them to improve the functioning of their tax systems.

HMRC has provided a further update on the ongoing calculation issues with 2024/25 Class 2 National Insurance Contributions (Class 2 NICs) which you can read more about below. In other miscellaneous news this week: In a Press Release, HMRC is urging anyone with a side hustle to check if they are self-employed and need to register for self-assessment, The Institute for Fiscal Studies says the tax system is making net zero more costly than it has to be, The minutes from the most recent meeting of the HMRC forum, the Joint Vat Consultative Committee are available, As we reminded you last week, today, Monday 30 June 2025, is the deadline to register to report for Pillar Two in the UK. HMRC has recently updated its guidance on this, HMRC’s latest News and Information Bulletin is available on our website, The latest schedule of HMRC Talking Points live and recorded webinars for tax agents is available for booking. Spaces are limited, so take a look now and save your place, and Check HMRC’s online services availability page for details of planned downtime and the online services affected. Update on Class 2 NICs issue Last week we updated you on the ongoing Class 2 NICs issue which has resulted in incorrect tax calculations being issued to some taxpayers for 2024/25. HMRC has asked us to share an update on this issue which confirms that agents who receive incorrect calculations for clients “should not need to take any further action” as HMRC continues to work on a fix. The full update from HMRC is as follows: “We’re working to resolve the issue which we became aware of on 9 May affecting some Self-Assessment taxpayers in relation to Class 2 National Insurance contributions for the last tax year. The nature of the error depends on individual circumstances, but in general, customers with self-employed profits above £12,570 have seen Class 2 NICs charge of £358.80 added to their accounts when they shouldn’t have been, although in some circumstances it will be less. We’ve already taken action to correct the Class 2 NICs figure in circumstances where the information we hold has allowed us. If this applies to your clients, they will have received a message to let them know. We will correct the records of other customers after the issue has been resolved and again, notify them when we have done so, so there is no need for customers to contact us.  We are expecting to have the issue resolved by the end of July at the latest and will be correcting records before any incorrect amounts due impact the tax owed for 2024–25.  While we understand this may be concerning, we want to reassure you that there should be no long-term impact. We’d also like to reassure you that customers who may have made a payment will either be refunded or have a credit added to their Self-Assessment statement.” We are also aware that some taxpayers may have received letters telling them to object to the computation within 30 days of receipt (which some agents may also be aware of) and that incorrect Class 2 NICs calculations are continuing to be sent by HMRC even though it is working on a fix. In addition, there are scenarios where agents have correctly filed 2024/25 returns showing no Class 2 NICs liability after which they have subsequently received a letter from HMRC to say they will be correcting this when in fact the correction too is showing no Class 2 NICs liability. In response to this HMRC says: “The 30-day limit can be ignored for impacted self-employed customers as they’ll be issued with a new SA302 tax calculation letter - which is when a new 30-day limit will commence.  Unfortunately, existing incorrect Class 2 letters will continue to be issued until the fix is in place, but we are pushing for this to be done earlier than the end of July estimate we’ve been given. We believe that this issue is also the cause of instances where a letter is received by an agent after they have filed a return correctly (showing ‘nil’ NICs), stating that their return has been ‘corrected’ to ‘nil’.  This requires a slightly different fix, but it will be carried out to the same July timescale. There won’t be any new letter issued following the fix in these circumstances as there’s no correction to be made, but we appreciate that it is confusing to receive a letter which confirms the NIC but is branded as a ‘correction’. The fix will stop these letters.”  

The FISC Subcommittee hosted a joint public hearing with the SEDE Committee focused on the legislative framework governing VAT exemptions for defence-related activities carried out under the EU’s Common Security and Defence Policy.