The former Italian Prime Minister Enrico Letta recently launched a report on the EU Single Market. The report focuses on competitiveness, streamlining EU regulations to boost the data economy, investment in digital innovation, governance, tax, energy/climate, and SME competitiveness. There is anecdotal feedback that the document is being considered as a key document for the next EU Parliament. The Taoiseach has noted that while Ireland supports the integration of capital markets, this should not involve the harmonisation of corporate tax or insolvency laws.

Revenue has updated the Tax and Duty Manual regarding charities and sports bodies online applications for tax exemption. The guidance now reflects the increase in the value threshold requirement for audited accounts for charities, from €100,000 to €250,000 (paragraph 7.2). 

Last Thursday on Tax and Maintenance Day, the Government published a written ministerial statement setting out further detail on various commitments made at the March 2024 Spring Budget. This includes the launch of a consultation on the impact of recent High Court rulings on the VAT treatment of private hire vehicles and an update on the recent consultation on tackling non-compliance in the umbrella company market. The government also announced two further technical tax policy proposals.  In summary, the announcements were as follows:- VAT treatment of private hire vehicles – a consultation has been launched on the potential tax impact of recent High Court rulings on the private hire vehicle sector. This consultation also invites views on potential Government interventions that could help to mitigate any undue adverse effects on this sector and its passengers. The consultation is open until 8 August 2024; Tackling non-compliance in the umbrella companies market – the Government will publish a response to this consultation in due course. HMRC will publish new guidance later this year which will include an online pay checking tool. At present, the Government is considering introducing a statutory due diligence regime for businesses that use umbrella companies and will continue to engage with the recruitment industry and other key stakeholders on the detail of this;  VAT treatment of charitable donations - to encourage charitable giving, the Government will consult later this year on introducing a targeted VAT relief for low value goods donated to charities by businesses which the charities then give away free of charge to those in need; and  Mandating postcode provision for freeports and investment zones national insurance contributions (“NICs”) reliefs – a legislative change will be introduced which will require employers operating in a freeport or investment zone special tax site to provide their employee’s workplace postcode to HMRC if they are claiming the relevant secondary Class 1 NICs relief through payroll. This will be underpinned by a four-week technical consultation on the draft regulations required to implement this.  Full details of the various publications and announcements made are available at:- https://www.gov.uk/government/publications/summary-of-tax-administration-and-maintenance-spring-2024. 

The Minister for Finance, Michael McGrath TD, has welcomed data published by the Central Statistics Office (CSO) which shows a General Government Surplus of €8.3 billion last year, the equivalent of 2.9 percent of GNI*. This compares with an €8.6 billion (3.2 percent of GNI*) surplus in 2022. A record level of corporation tax receipts in 2023, just under €24 billion, is a key part of the surplus.  Previously large budgetary deficits were recorded in 2020 and 2021 as the Government provided support to households and firms during the pandemic.  Commenting on the figures, the Minister for Finance, Michael McGrath T.D. said:  “I welcome today’s figures which show the Irish government achieved a significant budgetary surplus in 2023 for the second year in a row. This result is testament to the careful management of our public finances in recent years and gives us options that are not open to many peer countries in the developed world.  It is also noteworthy that General Government Debt fell in 2023 compared to the previous year. Next week, Minister Donohoe and I will publish the Stability Programme Update (SPU) which will again project that our public finances will remain in healthy positive territory this year and in the coming years.  However, it is important not to lose sight of the fact that at least part of the surplus is due to the strength of corporation tax receipts, some of which is likely to prove windfall in nature. While our headline position is strong, this can change quickly given the inherent volatility in our corporation tax receipts and the dependence we have on revenues from a small number of multinational companies.  In this context, it is imperative that transitory revenue streams are not used to finance permanent increases in expenditure or reductions in taxation. With this in mind, Government recently published legislation providing for the establishment of the Future Ireland Fund and the Infrastructure, Climate and Nature Fund. The Bill has now passed second stage in the Dáil and will proceed to committee stage shortly.  The Future Ireland Fund will help deal with future expenditure pressures including ageing, climate, digitalisation and other fiscal and economic challenges. This is not a rainy day fund because these are costs we know are coming our way. If we don’t make provision for them now, future governments will face very difficult choices in the years to come to ensure revenues match the expenditure commitments of an ageing population. The purpose of the Future Ireland Fund is to support State expenditure from 2041 onwards in a consistent and sustainable manner.  The Infrastructure, Climate and Nature Fund will seek to deal with the historic pro-cyclicality of public spending and to assist with climate change objectives and nature, water quality and biodiversity issues. I want to ensure that no future government ever has to slash investment in critical infrastructure in areas such as housing, transport, health, education and energy, when we encounter an economic downturn or shock. The ‘stop, start’ approach to public capital investment must be consigned to history.  These two new long-term funds will make the future safer for our economy, our public finances and our people. My aim is to have the legislation enacted before the summer recess and have the Funds in place later this year.  I now look forward to the publication of the SPU next week, the National Economic Dialogue next month, and the publication of the Summer Economic Statement before the summer recess, as we work towards Budget 2025 next October.”  *Gross National Income (GNI) is an indicator designed specifically to measure the size of the Irish economy by excluding Globalisation effects. 

In recent weeks we have issued several reminders that 30 April 2024 is the deadline for the end of the VAT margin scheme in respect of second-hand vehicles moved to Northern Ireland from Great Britain prior to 1 May 2023. If these vehicles are sold after 30 April 2024, VAT will therefore be chargeable on the full selling price and not on the margin made.   Readers are also reminded that vehicles moved to Northern Ireland from GB on or after 1 May 2023 can use the new VAT related payment scheme, if certain conditions are met. However, this is not available if the vehicle was moved to Northern Ireland prior to 1 May 2023.  

Check out the latest items on the Agent Forum. Remember, in order to view each item, you must be signed up and logged in.   All agents, who are a member of a professional body, are invited to join HMRC’s Agent Forum. This dedicated Agent Forum is hosted in a private area within the HMRC’s Online Taxpayer Forum. You can interact with other agents and HMRC experts to discuss topical issues and processes. 

Revenue, in conjunction with the Department of Social Protection (DSP), is hosting in-person information sessions for people over the age of 65 in April and May. The sessions will be held in Dublin, Louth and Donegal from 29 April to 3 May 2024.   Information will be provided on Capital Acquisitions Tax (CAT), PAYE, income tax and DSP Long-term Carers Contribution. There will also be presentations from Citizen’s Information and the Law Society (Wills).  Those attending the meeting must register in advance by calling 085 8582633 or emailing Over65Outreach@revenue.ie, before 24 April if possible.  Further details are available on Revenue’s website. 

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. 

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 and InterTrade Ireland is hosting a series of free webinars to help businesses navigate trade between Ireland, Northern Ireland and Great Britain (“GB”). HMRC has also launched a new online service for businesses importing goods into GB and Northern Ireland and we update you on some matters discussed at a recent meeting of HMRC’s Northern Ireland Joint Customs Consultative Committee.  New online service for importers  Businesses importing goods into any part of the UK can now use a new HMRC online service for the following purposes:- view and manage your cash account (top up and withdraw funds);  set up a Direct Debit for and top up a duty deferment account;  request older statements and certificates;  view and manage your general guarantee account;  manage the email address linked to your account;  access secure messages from HMRC related to your account; and  set up, manage, or view account authorities.  You can also view and download:- duty deferment statements;  import VAT certificates (C79);  postponed import VAT statements; and  notification of adjustment statements.  In order to use the service, you must be subscribed to the Customs Declaration service (“CDS”) and can sign in to the new service using the Government Gateway user ID and password used to subscribe the CDS.  Meeting of HMRC’s Northern Ireland Joint Customs Consultative Committee (“NI JCCC”)  The Institute was in attendance at the most recent meeting of HMRC’s NI JCCC, a stakeholder forum to discuss Northern Ireland specific customs issues as a result of the UK’s departure from the EU.  At the meeting HMRC presented on the issue of consumer parcels being sent from GB to NI. A new system will be operational from Spring 2024, the UK Carrier Scheme, before the next phase of the Windsor Framework takes effect from 30 September 2024. In summary, from 30 September 2024, consumer parcels will be able to be sent from GB to NI without customs declarations. However, some information will need to be provided in bulk under the new UK Carrier scheme which aims to remove the burden from the border.  HMRC will issue further guidance and stated that they will not be auditing large movements of parcels. However, if there is a perception of potential abuse of the scheme, for example by moving goods from GB to NI for the purposes of onwards movement into the EU, HMRC will raise this with carriers. A number of upcoming milestones were also highlighted which we will provide more details on in due course.   The consultation on the introduction of the UK’s Carbon Border Adjustment Mechanism (“CBAM”) was also discussed. This will be introduced from 1 January 2027. The Government is considering minimum thresholds and plans to operate this like a domestic tax making the person who is responsible for the goods the person responsible for paying this tax, not the customs agent. This will be implemented by primary and secondary legislation and will also be followed by the development of guidance.   A question was asked if there is a liability to the EU CBAM for Northern Ireland importers if Northern Ireland importers are moving the goods into the EU, but the goods are coming from GB into Northern Ireland. HMRC confirmed that imports into Northern Ireland are not subject to the requirements of EU CBAM. Imports into the EU, including Ireland, are subject to the EU CBAM.   Miscellaneous updated guidance etc.   Recently updated guidance, and publications relevant to EU exit are set out below:-  External temporary storage facilities codes for Data Element 5/23 of the Customs Declaration Service;  Data Element 2/3: Documents and Other Reference Codes (Union) of the Customs Declaration Service;  Known error workarounds for the Customs Declaration Service (CDS);  Apply for a voluntary clearance amendment (underpayment) (C2001);  Access trader testing for the New Computerised Transit System Phase 5;  Customs Importer and Exporter Population 2023; and  Customs Importer and Exporter Population. 

Revenue has published statistics for Local Property Tax (LPT) 2024 indicating compliance of 95 percent for returns filed and 87 percent for tax paid. To date €311 million has been paid for 2024 LPT. Revenue has noted that 10,584 payment arrangements are in place where a return has yet to be filed. Revenue has advised that those taxpayers should file an LPT return as soon as possible in order to avoid issues at a later date.   

Ahead of the 1 May 2024 deadline, the Minister for Finance Michael McGrath TD is encouraging businesses availing of the Debt Warehousing Scheme (DWS) to engage now with Revenue to agree arrangements to repay their warehoused debt. The Minister has noted Revenue’s flexible approach to working with taxpayers to manage their liabilities over a timeline that suits their particular circumstances on a case-by-case basis.   Revenue has stated that there is no expectation on businesses to have all their warehoused debt paid in full by 1 May. They must, however, have engaged with Revenue by submitting an ePPA online via ROS to address their warehoused debt. Where a business plans to use an approved refund/credit to pay some or all of their debt, they must notify Revenue in advance of 1 May 2024.   Revenue has updated its website to include a video recording to outline the key actions businesses need to take now and the payment options available. In addition, Revenue has also updated the Debt Warehousing Information Booklet to outline some key Frequently Asked Questions (FAQs) in relation to the payment of warehoused debt.   Section 997A TCA 1997 operates to deny directors/employees with a material interest in the company a credit for tax deducted from their remuneration until such tax has been remitted to the Collector-General. The credit for tax deducted cannot exceed the tax actually remitted in respect of that person’s emoluments. Revenue has provided clarification on the approach for section 997A TCA 1997 regarding warehoused debt relating to emoluments paid to directors/employees with a material interest in the company. In such circumstances, both the company and the director/employee will need to enter into a formal phased payment arrangement (PPA) for their warehoused liabilities via ROS. However, the director/employee may request a payment break for the PPA until such time as the company has paid its liability in full. Revenue is aware that some companies may need an extended period of time to pay off the warehoused debt. Revenue Legislation Services (RLS) is currently considering the position. It is not intended that the director/employee will be negatively impacted where the company pays its full Employer PAYE liability (i.e. credit for PAYE paid will be available to the director/employee where the Employer PAYE liability is paid in full, even outside of the usual 4-year time limit).   Revenue will continue with its approach to PPAs so long as the taxpayer continues to file their current tax returns and pay current liabilities as they fall due, and they engage with Revenue in advance of 1 May to agree to agree arrangements to address their liabilities. The Minister last week highlighted that the payment of current taxes, mainly employer’s PAYE, PRSI and VAT, and arrears arising outside the warehouse periods is considered to be a key indicator of a business’s viability.  To assist customers as the debt warehouse deadline approaches, the Collector General’s Division will be extending the opening hours for their phone lines from 9.30 to 16.30 from 24 April to 3 May.  The Minister also noted that at the end of March Revenue wrote to customers providing them with a schedule of their debt and highlighting the immediate action required before 1 May 2024 to address the debt and the flexible payment options available.  Warehoused debt of €1.65 billion remains outstanding in respect of 55,490 individual taxpayers, 70 percent of which owe amounts less than €5,000. The bulk of the debt, €1.41 billion, is owed by 5,040 taxpayers, each owing in excess of €50,000. At 31 March 2024 2,760 taxpayers had agreed PPAs for warehoused debt totalling €237 million.  The Minister also noted Revenue’s approach in refunding taxpayers who have paid interest at 3 percent on warehoused debt and by adjusting the terms of PPAs.  Commenting on the latest statistics, Minister McGrath stated:  “The reducing amount of debt in the warehouse and the associated number of customers involved demonstrates that businesses are working with Revenue to pay the amounts due. However, the liabilities of over 55,000 customers remain in the warehouse. Many of these customers have engaged with Revenue, as is evidenced by the increase in numbers of PPAs in place, however, for those businesses that have not already done so, the key message is that they should engage with Revenue now, in order to agree arrangements to address their debts and avail of the flexibilities being offered in relation to this debt. Taxpayers must have submitted their application for a Phased Payment Arrangement (PPA) using Revenue’s online Service (ROS) by 1 May 2024, where appropriate.  It is important to note that, businesses are not required to pay all of their warehoused debt by 1 May 2024. However, in order to avail of the 0 percent interest and flexible payment options, they are required to engage with Revenue to make arrangements to pay the debt over an agreed period of time, based on their individual circumstances and capacity to pay. A key condition of the scheme is that taxpayers continue to file their current tax returns on time and meet their current tax liabilities as they fall due.  Finally, I welcome the pragmatic and fair approach being taken by Revenue and their efforts in assisting their customers agree a realistic payment plan tailored to their particular circumstances.” 

  The theme of Earth Day 2024 (April 22) is Planet vs Plastics.  Planet vs. Plastics unites students, parents, businesses, governments, churches, unions, individuals, and NGOs in an unwavering commitment to call for the end of plastics for the sake of human and planetary health, demanding a 60% reduction in the production of plastics by 2040 and an ultimate goal of building a plastic-free future for generations to come.  About Earth Day First held on April 22, 1970, Earth Day is an annual day to demonstrate support for environmental protection. It now includes a wide range of events coordinated globally by earthday.org, working to drive meaningful action for our planet across these issues: Climate Action, Science and Education, People and Communities, and Conservation and Restoration, and Plastic and Pollution.  Here are some resources from Earth.Day.org: join or create a clean up: The Great Global Cleanup® is a worldwide campaign to remove billions of pieces of rubbish from neighborhoods, beaches, rivers, lakes, trails, and parks — reducing waste and plastic pollution, improving habitats, and preventing harm to wildlife and humans. It aims to continue clean ups every day of the year for a brighter, greener, and cleaner planet. check out the Earth Day 2024 End Plastics Action Toolkit 52 actions and tips to make a difference, every day of the year Learn More About Plastic Pollution (Factsheets)  Earth Day and Accountants On Earth Day 2022, the chief executives of 10 of the world’s leading accountancy institutes joined together to support a call to action in response to the nature crisis, ahead of the upcoming UN Convention of Biological Diversity (CBD) COP 15. Working together as part of the Global Accounting Alliance (GAA), the CEOs signed the call to action ‘Nature is Everyone’s Business’ to signal the important role the profession plays in this crisis.  Since then nearly every country on Earth has signed up to the most ambitious plan ever to protect nature, and nature and biodiversity have rapidly risen up the corporate agenda as more and more companies understand the need to protect it. International initiatives addressing nature have developed: the Task Force on Nature-related Financial Disclosures (TNFD) which develops risk management and disclosure frameworks for organisations to report and act on evolving nature-related risks; the European Sustainability Reporting Standards (ESRS) E4 standard specifically addresses corporate sustainability relating to biodiversity and ecosystems. The ultimate aim is to support a shift in global financial flows towards nature-positive outcomes. You can find out more about accounting for nature in the Chartered Accountants Ireland Sustainability Centre. Some quick resources are here: A quick read about nature and numbers Find out about Accounting for Nature on the Chartered Accountants Ireland Sustainability Centre Read our call to action ‘Nature is Everyone’s Business’ to signal the important role the profession plays in this crisis. Check out the Business for Biodiversity Ireland, the not-for-profit organisation helping Irish businesses transition towards a nature positive way of working Read about Navigating TNFD: A new era in nature reporting from Accounting for Sustainability (A4S) Watch Earth Day Live event series Follow updates on X: #EarthDay2024