News

A recording of the webinar providing an update on the Trader Support Service (TSS) on 4 March is available to view on demand, for free HERE A pdf copy of the slides used in the presentation is available to download HERE

Revenue will be contacting businesses who are not filing timely tax returns. According to Revenue, compliance slippage is evident among some businesses participating in the Tax Debt Warehousing Scheme.  As set out in a recent press release, of the 70,000 businesses availing of the Tax Debt Warehousing Scheme, 41,300 filed their tax returns as they fell due and 28,700 have some outstanding returns. Approximately 4,500 of the businesses that have not kept up to date with filing their tax returns are claiming for support under the EWSS and/or CRSS and these claims will not be paid if the taxpayer does not file tax returns. These taxpayers also risk losing tax clearance and the withdrawal of the Tax Debt Warehousing Scheme.  In the press release, Revenue also notes that a small number of businesses not in the Tax Debt Warehousing Scheme are also demonstrating tax compliance slippage.  Revenue will be contacting these businesses over the coming weeks to outline that if their filing and payment issues are not quickly rectified they will be subjected to debt collection and enforcement action, including interest charges at the standard rates of 8 percent and 10 percent, as appropriate.

At a recent TALC meeting, Chartered Accountants Ireland, under the auspices of the CCAB-I, asked Revenue to set out the process and the timing of closure of claim notifications from the Department of Social Protection (DSP) to Revenue when an individual returns to work after claiming the PUP.  Revenue noted that there can be an overlap of one week between the last payment of the PUP and an individual’s return to work.  The claim closure notice issues from the DSP after the payment of PUP for the individual’s final entitlement week. The individual will be taxed on a “Week 1” basis on returning to work until such time as tax on the PUP is paid.  The PUP is taxed in real-time in 2021 and a claimant’s tax credits, and rate bands are placed on a “Week 1” basis to collect tax due on the PUP as set out on Revenue’s webpage.  If the PUP claimant has insufficient tax credits to pay the tax due on the PUP, then the tax credits of his/her jointly assessed spouse will be reduced to collect the tax. 

Revenue will withdraw the option for taxpayers in Medium Enterprises Division (MED) and Large Cases Divisions (LCD) to make payments of tax liabilities with credit cards. This will take effect in April.  Revenue will contact taxpayers who have availed of this option to pay in the past to notify them that credit card payment cannot be used going forward.  The option to use a credit card to make a tax payment will continue for taxpayers in Revenue’s Business Division and Personal Division. Revenue absorbs the cost of processing credit card tax payments but processing costs for large tax payments are becoming prohibitive according to Revenue, and so the option is to be withdrawn for large taxpayers managed in MED and LCD. 

Revenue confirmed in a press release last week that it will not apply a late filing surcharge to Corporation Tax returns (Forms CT1) for accounting periods ending in June 2019 onwards, including all accounting periods in 2020. This concession will remain in place until 30 June 2021.  Revenue will issue reminder notices to companies with outstanding Form CT1s for an accounting period ending in the 6 months to 31 December 2019. If the Form CT1 remains outstanding, the company will no longer qualify for tax clearance and access to the EWSS and CRSS supports will be withdrawn.  Revenue confirmed to the CCAB-I in a recent TALC meeting that the surcharge suspension for late iXBRL financial statements for accounting periods will also cease to apply from 1 July. The CCAB-I noted in our discussions with Revenue that companies continue to have challenges establishing if the trade will continue as a “going concern” due to the disruption caused by COVID-19 and this in turn is presenting difficulties for officers of companies in their efforts to sign off on company accounts.  This issue will persist while Government restrictions continue and Form CT1s and iXBRL financial statements will be delayed consequently.  Revenue will continue to keep the position regarding the late filing surcharge and iXBRL financial statements under review.  See the last paragraph of Revenue’s press release for information on the Form CT1 surcharge suspension. 

The CCAB-I recently wrote to Revenue setting out issues encountered by taxpayers as they try to settle their TWSS liabilities.  The letter explains how taxpayers who are self-assessed or jointly assessed with a self-assessed taxpayer require the same terms to spread the payment of the TWSS tax liability over four years as non-self-assessed taxpayers.  The letter also highlights that employers are actively exploring payment of their employees’ TWSS tax liabilities but currently cannot establish the tax derived from the TWSS. Due to cash flow constraints, many employers need until 2022 to pay their employees’ TWSS tax and the CCAB-I calls for the BIK concession to be extended beyond June 2021 accordingly. The letter is based on the feedback provided by accountants in a recent survey conducted by the CCAB-I. 

Revenue will continue to expedite payments of any instalment of excess R&D tax credit due to be paid in 2021, due to the exceptional circumstances of the COVID-19 pandemic. This is now confirmed on the Revenue website, which previously referred to the expedition of R&D instalments payable in 2020 only. This concession brings forward the payment date provided by section 766 and section 766A TCA 1997. Requests for Revenue to expedite the payment of any 2021 instalments of excess R&D tax credits should be made through MyEnquiries. To enable payment of the excess credits, the form CT1 for the company’s accounting period ending in 2020 and for accounting periods ending up to March 2021 must, at the time of the request, be submitted. To ensure timely processing of requests, they should be tagged appropriately within MyEnquiries: enquiry relates to ‘Corporation Tax’ more specifically ‘R&D instalments payable in 2020 and 2021’.

Revenue has proposed a number of solutions for issues identified in relation to multiple vendors and the eCG50 system. The issues that have been identified are as follows: Agents/solicitors must be linked to all vendors All vendors must be registered for CGT Payments made should be done under one vendor rather than shared (While this issue is uncommon, nonetheless it exists – if multiple vendors are making multiple separate CGT payments in separate ROS accounts, the eCG50 system cannot track and verify the sum of all payments.) Item 1: It is proposed that a function will be added to the TAIN cert giving the ability to create a resident or non-resident individual with solely a CGT registration. This function will make it easier for agents/solicitors to link to their clients. This functionality is due to go live in June. Item 2: It proposed to deal with this issue by allowing everyone access to the system irrespective of their registrations and then doing a verification check on their CGT registration during the application. If the CGT registration check is returned false an error screen will be presented requesting that they register for CGT (in eReg) and then come back and the application is halted at this stage. The CGT registration in eReg is straight forward so this shouldn’t be a big issue. This should be live by April.

At a meeting of the TALC Indirect subcommittee last week, the CCAB-I raised concerns on behalf of members in relation to delays in processing VAT registration applications and the commercial difficulties of overcoming the “intend to trade” test in genuine cases. The CCAB-I requested that Revenue provide a list of items acceptable as evidence of an intention to trade. The Tax and Duty Manual – Part 38-01-03b – Guidelines for VAT Registrations, is being reviewed and members feedback on the manual is welcomed. If you wish to provide feedback, please email tax@charteredaccountants.ie. The CCAB-I also raised member queries on the issue of a UK business with an Irish VAT registration exporting goods from GB to ROI on delivery duty paid (DDP) terms, in relation to the associated VAT implication for the Irish VAT registered customer. Revenue confirmed such cases give rise to two separate transactions for VAT: The import Irish VAT, and Domestic VAT. On the arrival of the goods in Ireland, the UK business will use its Irish VAT number to pay over the import VAT or use the postponed method of accounting. The Irish business supplying the goods to the end user in Ireland will charge Irish VAT at the appropriate rate. The technical basis for this is that the place of supply is Ireland, as the goods are located in Ireland when the transfer of ownership takes place for VAT purposes.

Updates to Tax and Duty Manual – Part 33-03-03 – EU Mandatory Disclosures of Reportable Cross-Border Arrangements – include changes to the guidance on specified information reporting requirements and additional guidance on the meaning of “may reasonably expect” in the application of the Main Benefit test and “knows or could be reasonably expected to know” on whether a secondary intermediary has a reporting obligation. In paragraph 3.1 the guidance on the specified information reporting requirements has been updated as follows: The practice of allowing an intermediary not to disclose information about a person to whom they made a reportable cross-border arrangement available, where the person indicated that they would not be proceeding with it, has been removed. Further detail has been issued on the required disclosure standard in respect of the following specified information: the summary of the content of the cross-border arrangement, the national provisions forming the basis of the cross-border arrangement, and Member State(s) likely to be concerned by an arrangement. Further guidance has also been included on the following topics: In paragraph 2.5.3: Guidance on the meaning of "may reasonably expect" in the application of the Main Benefit Test has been inserted. In paragraph 2.6: Guidance on Hallmark A3 updated for introduction of section 817RI in Finance Act 2020. In paragraph 4.6: Additional examples included to demonstrate the application of the exemption. In paragraph 4.10: Clarifying footnote included to note that waivers of LPP are accepted as for the purpose of DAC6 filings only. In paragraph 5.5: Additional guidance included to cover situations where the relevant taxpayers have reporting obligations in different Member States. In paragraph 5.6: Additional guidance provided to deal with situations where an intermediary was responsible for reporting, but neither filed a return nor provided the taxpayer with an Arrangement ID. See eBrief No. 040/21 for further details. Following on from requests for a pdf export facility for DAC6 returns at a recent meeting of the TALC DAC6 Implementation subgroup, Revenue confirmed it will not be in a position to provide this. Revenue detailed at the meeting that a full XML file is delivered to the ROS inbox, which includes the Arrangement ID.

A new Tax and Duty Manual – Part 38-06-03 – Hard copy returns - has been published. The manual provides guidance on the process for the making and authentication of hard copy (facsimile) returns, as set out in section 917K TCA 1997. The requirement for Revenue to approve the format of hard copy returns was removed in Finance Act 2019 (section 70). Accordingly, Revenue is no longer approving the format, or technical detail, of the returns of third-party software providers. See eBrief No. 044/21 for further details.

Tax and Duty Manual Part 37-00-39  - State Aid Transparency Requirements: Publication of information regarding State aid granted to individual taxpayers - has been amended at paragraph 3 “Publication deadlines”. The amendments reflect the changes to the publication deadlines for aid awards granted through the relief for investment in films and the Employee Investment Incentive. See eBrief No. 043/21 for further details.