News

The Department of Housing, Local Government and Heritage has published a webpage detailing all the supports that are available to people that refurbish vacant residential properties, including various grants and tax reliefs under the Living City initiative.

Revenue has updated the Tax and Duty Manual for Country-by-Country Reporting - Data Access & Usage by providing updated figures on Country-by-Country Reporting agreements in place and the timeframes to bring them in line with exchange deadlines in the relevant legislation.

Revenue has updated its Tax and Duty Manual to reflect the extension to 31 December 2025 of the relief under section 83D of the Stamp Duties Consolidation Act (SDCA) 1999. Section 83D SDCA 1999 provides for a Stamp Duty refund where land that is chargeable at the non-residential rate of Stamp Duty is subsequently developed for residential purposes. 

The Minister for Finance, Michael McGrath, has published the first three-month assessment of the Temporary Business Energy Support Scheme (TBESS). We remind readers that the deadline for submission of September claims is tomorrow, 31 January 2023. The scheme has, to date, seen a lower level of uptake against what has been expected and budgeted for. Anecdotally, members have reported that many businesses are failing to reach the 50 percent increase in average unit price requirement and for those that do, registration is cumbersome and, in many cases, the repayment amount is not worth the time and cost in actually making a claim. In addition, oil and Liquid Petroleum Gas are excluded from the scheme as they are not metered. That being said, the scheme only opened for claims in December, and it is expected that claims should increase in the coming weeks. Commenting, Minister McGrath said: “This is the first assessment of TBESS and contains up-to-date data on the trajectory of energy prices, the impact from, and effects of, increased energy prices on the economy as well as other relevant issues relating to the operation to the scheme. As of 25 January, 15,275 businesses have registered for the scheme. 9,148 of these have commenced the claim process. 5,793 claims have been approved with a value of €17.49 million of which €13.24 million has been paid out. I am urging eligible businesses to continue to make claims under the scheme. Businesses should be aware that the window for making claims in respect of September 2022 will close at the end of this month, so it’s important to complete that claim in the coming days.”

Revenue has published an updated Tax and Duty Manual to reflect the extension of the Special Assignee Relief Programme (SARP) to the end of 2025. The guidance has been amended as follows: Section 4 has been updated for the new qualifying requirements applying to assignees who arrive in the State on or after 1 January 2023; Example 1 in Appendix I now refers to the new minimum relevant income threshold applying to assignees who arrive in the State on or after 1 January 2023; and Appendix III now includes a copy of the new Form SARP 1A employer certification which is required to be completed in respect of new arrivals in the State from 1 January 2023.

Revenue has published a range of preliminary statistics on PAYE for 2022, including information on 2022 Income Tax returns filed to date and the end of year tax position for PAYE taxpayers yet to file. Employees should now be able to access their Preliminary End of Year Statement for 2022 (“the Statement”) through myAccount.  The Statement is based on income and statutory deductions reported by employers, pension providers and the Department of Social Protection. The Statement will indicate whether the correct amount of tax has been paid in 2022. To obtain a final Statement of Liability, employees must complete an income tax return, returning details of additional income, allowable reliefs, and/or available credits (if any).    Commenting on income tax returns for 2022 filed to date, Ms. Aisling Ní Mhaoileoin, Revenue’s National PAYE Manager, said: “Over 370,000 tax returns have been processed in respect of PAYE taxpayers who have already filed their return for 2022, this is up over 30 percent on the same period last year. Approximately 275,000 of these returns resulted in an overpayment of tax and €193 million has already been refunded to individuals’ bank accounts as a result.  The major difference for 2022 is the introduction of the Rent Tax Credit in the Budget. Unlike usual Budget tax credit changes which apply for the following year, this credit applies retrospectively for 2022 and can be claimed on an Income Tax return for the tax year 2022. The value of the credit is up to €500 per year for individual taxpayers and up to €1,000 per year for jointly assessed married persons or civil partners. Of the 2022 tax returns received to date, approximately 78,400 claims have been made in respect of rent tax credit. In addition, we expect that from mid-February, customers will be able to claim Rent Tax Credit for 2023 in real-time through the ‘Manage Your Tax’ option in myAccount.” 

Last Thursday, the Institute, under the auspices of the CCAB-I, responded to the European Commission’s public consultation on the BEFIT initiative. BEFIT is an initiative which sets out to introduce a common set of rules for EU companies to calculate their taxable base to ensure a more effective allocation of profits between EU countries. In our response we outline that BEFIT is not the direction that the EU should be focusing on given the OECD’s ongoing work on the Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy and the subsequent EU directive to implement the OECD’s Two Pillar Solution.   The main points from the CCAB-I response are summarised as follows: The OECD Two-Pillar Solution is a landmark in international cooperation in taxation matters. This initiative has yet to be fully agreed, and until the rules are fully implemented and given time to mature, it is premature to consider a suite of measures which would apply to SMEs who predominantly operate within their national boundaries. CCAB-I is in favour of a move toward a territorial system of taxation which would benefit SMEs and enhance intra-EU trade in a proportionate way consistent with the principles of subsidiarity and sovereignty. CCAB-I considers that direct taxation should remain the responsibility of national legislators and this we believe to be consistent with the principles of sovereignty and subsidiarity. The current BEFIT proposals suggest that dual tax systems would operate in EU countries, and it is questionable whether administrative efficiencies could be achieved from such dual system. CCAB-I’s view is to allow the Pillar One and Pillar Two processes to conclude before consideration of implementing a further set of complex rules, which clearly have some overlap.

After the successful completion of peer reviews under the existing BEPS Action 14 Assessment Methodology, a new Assessment Methodology has been agreed. The new methodology continues the robust peer review process and seeks to increase efficiencies in the resolution of double taxation disputes. The annual Mutual Agreement Procedures Statistics have also been enhanced and a new annual framework for reporting Advance Pricing Arrangement Statistics has been created.

Tomorrow, 11.59pm 31 January 2023, is the 2021/22 self-assessment (“SA”) filing deadline to ensure returns are not treated as filed late and automatically incur a £100 penalty. This is also the deadline for paying the balancing payment of tax and national insurance for 2021/22 in addition to the first 2022/23 payment on account (unless a time to pay arrangement is in place). 2020/21 SA returns must also be amended by the above deadline. Readers are reminded that any Self-Employed Income Support Scheme grants received in 2021/22 must be included as taxable income as must any other support grants received by the self-employed.

In November 2022, HMRC consulted informally through the Joint VAT Consultative Committee on changes to the process for notification of options to tax. HMRC has now provided its response to this consultation and also recently published Revenue and Customs Brief 1 (2023): changes in processing option to tax forms by the option to tax national unit which sets out the changes which will take effect from 1 February 2023. HMRC’s response to the consultation is set out in more detail below. “Response to Consultation on potential Changes to the Processing of Option to Tax (OTT) Forms by the OTT National Unit  Thank you for your time in responding to the recent Option to Tax (OTT) consultation. The consultation period ended on 28 November 2022. Since then, we have carefully considered the feedback provided. We have decided to implement the proposed changes: OTT Notification HMRC will stop issuing Option to Tax Notification Receipt letters from 1 February 2023. Within a Notification of an Option to Tax, the correct and valid option has been and remains the responsibility of the opter. When a Notification of Option to Tax is submitted to optiontotaxnationalunit@hmrc.gov.uk you will receive an automated email response. You should keep this automated response for your records. The date on the automated response will confirm to you the date HMRC has been notified. A Notification sent by any other means will not receive an acknowledgement or receipt. We will however respond if further information is required. OTT Charter HMRC will stop processing requests confirming the existence of an Option to Tax, unless under certain circumstances* (see below). We remind you, that information such as this forms part of the business record and should be kept for 6 years as stated in HMRC’s guidance.  See VAT notice 700/21 (section 2): https://www.gov.uk/guidance/record-keeping-for-vat-notice-70021#record--rules-for-all-vat-registered-businesses and https://www.gov.uk/charge-reclaim-record-vat/keeping-vat-records   *If a request is made under one of the following conditions, then HMRC will check to see if we hold a record of an Option to Tax for the relevant property.   The effective opted date is likely to be over 6 years ago, or If you have been appointed as a Land and Property Act Receiver, or an Insolvency Practitioner to administer the property in question. If these conditions are met a request to confirm that an Option to Tax is in place on the relevant property must be accompanied by a letter or deed of appointment of your role, otherwise we are unable to assist. You should also please provide the following details: Name of the Business/person who had opted to tax the property; A VAT Registration Number (if applicable); The full address of the land/property in question, including postcode;   The effective date of the option to tax if known; The date you first charged VAT on the opted land/property; and   The date the property was acquired and/or a loan was taken out by the opter on the relevant property. The changes will go ahead from 1 February 2023.”

The Government has published The International Tax Enforcement (Disclosable Arrangements) Regulations 2023, the regulations for the UK’s mandatory disclosure rules which will take effect from 28 March 2023. These will require arrangements entered into on or after this date to be reported to HMRC under these rules. These rules replace the UK’s existing DAC6 regulations which will be repealed. HMRC has advised that the current DAC6 portal will stay open for one month after the introduction of the new rules to allow for arrangements falling under DAC6 to be reported where these were entered into before 28 March 2023. Overall, the new regulations are intended to implement the OECD 2018 Model Mandatory Disclosure Rules for Common Reporting Standard avoidance arrangements and opaque offshore structures. They impose obligations on persons, known as intermediaries or reportable taxpayers, to report information to HMRC about these types of arrangements.

In this week’s EU exit corner, we bring you the latest guidance updates and publications relevant to EU exit. HMRC has also answered a query on VAT relief codes and their interaction with the Customs Declarations service and has sent an email about industrial action at ports and airports on 1 February 2023 with advice for movements of goods. VAT relief codes HMRC was asked how the VAT relief codes VATZ, 1RV and F45 should be used on import entries submitted via the Customs Declaration Service (“CDS”) as there is confusion amongst import agents and some entries are being rejected because the combined use of these codes with other data elements creates an error within the CDS.  HMRC’s response is as follows:- “VATZ is a National Additional Code that a trader/agent would enter in Data Element (DE) 6/17. VATZ indicates that the goods are at the zero-rate of VAT, but can only be used where the commodity code itself has been configured with this VAT rate shown – for example, the comm code for T-shirts for men and boys has both the standard rate (no national additional code applicable) for men’s t-shirts and VATZ for the 0% VAT rate for boy’s t-shirts. Without entering the VATZ code the system will assume the goods are standard rated and apply the 20% VAT rate. 1RV is an Additional Procedure Code (APC) that’s entered in DE 1/11. This APC relieves VAT and should only be used where instructed by Customs or in the Tariff Volume 3/Declaration Completion instructions. When used it will demand that an Additional Information Statement is entered in DE 2/2 ‘RVAT1’ against which the trader/agent has to note the reason for the VAT relief being used. F45 is another APC, however this is specifically tied to the C-series APCs that provide relief of customs duties for a whole range of reasons and must be combined with the C-series APC on the declaration to obtain VAT relief. Documents can be uploaded when required via the upload service and that should be undertaken if instructed by CDS (a ‘DMSDOC’ message will be issued to notify of this) or when the guidance in the CDS Tariff requires this for a document specific procedure etc: https://www.gov.uk/guidance/send-documents-to-support-declarations-for-the-customs-declaration-service” Miscellaneous updated guidance etc. The latest guidance updates, and publications relevant to EU exit are as follows:- Factsheet: Withdrawal Agreement Joint Committee; CDS Declaration Completion Instructions for Imports; Transfer the rights and obligations of a customs special procedure to someone else; Clearing goods entering, leaving or transiting the UK; Check simplified procedure value rates for fresh fruit and vegetables; Check if you can use transit to move goods to the EU and Common Transit Convention countries; Starting and ending transit movements in Northern Ireland; Transporting goods into the UK under transit: step by step; Check if you can use transit to move goods to the EU and Common Transit Convention countries; Starting and ending transit movements in Northern Ireland; Transporting goods into the UK under transit: step by step; Importing goods into the UK using transit; Reference Document for The Customs Tariff (Establishment) (EU Exit) Regulations 2020; and EM on EU regulation 282/2011 (COM(2022)704)EM on EU regulation 904/2010 (COM(2022)703).