In this week’s Sustainability/ESG Bulletin read about Ireland’s green skills shortage, the global and Irish weather reports, and the costs, opportunities, and role of tax in the sustainability transition. Also covered is an increase in EVs in Ireland, lessons on sustainability from Nordic companies, a new framework to implement the Dasgupta Review recommendations, sustainability as a priority for MEPs, EU omnibus developments, and news from the US SEC as it votes to stop defending climate disclosures, as well as the usual articles, resources and upcoming events.   IRELAND Small Scale Renewable Electricity Support Scheme (SRESS) The Department of the Environment, Climate and Communications has recently launched a scheme that aims to support SMEs to establish their own export renewable electricity projects. Support is provided in the form of a guaranteed tariff for their electricity produced and is provided for 15 years. More information on the scheme can be found here.   Clear skills shortage challenges move to sustainable model for Irish business Research recently published by Skillnet Ireland has shown that a shortage of skilled workers is a challenge for business, particularly for SMEs, in moving to a more sustainable model. The research report, Ireland’s Talent Landscape 2025: Future Skills Challenges of Irish Business, identified the skills challenges facing businesses in adapting to the changing nature of work in the face of the digital, artificial intelligence (AI) and green transitions. It identified a growing recognition among businesses of the importance of climate action and sustainability expertise, alongside a clear skills shortage of green talent. At least two-thirds (66 percent) of businesses said they will need climate action and sustainability related upskilling.   SEAI report highlights costs and opportunities of energy transition   Achieving Ireland’s energy transition could result in up to €19 billion of capital expenditure per year by 2030 according to a new report by the Sustainable Energy Authority of Ireland (SEAI). The report, Ireland’s Sustainable Energy Supply Chain Opportunities, highlights the importance of collaboration between the public and private sectors to fulfil our energy transition goals. It outlines six recommendations, including developing skills and certifications, leveraging R&D capabilities, promoting sustainable practices, focusing on high-value markets, capturing the preliminary phase of the supply chain for key technologies and the installation and commissioning markets of technologies.   The role of tax in the green transition The Department of Finance has published an update to the methodology for Green Budgeting in Ireland from a Tax Perspective. It describes green budgeting as a “process which seeks to consider the impacts of the budgetary process and wider fiscal policy on the transition to a more sustainable, environmental and climate friendly economy … an explicit recognition that the budgetary process is not neutral, but reflects long standing societal choices about how resources are deployed.” The report finds that, overall, the tax system in Ireland as a whole can be considered climate positive in monetary terms, and that recent budgetary changes have improved the climate positive contribution of the tax system. It further recommends that policy and policymakers will need to be cognisant of, and integrate, environmental costs and benefits into medium- and longer-term fiscal planning. This paper also complements the efforts of the EU and the OECD to advance green budgeting practices at a national level. On Thursday 24 April the European Parliament’s Subcommittee on Tax Matters (FISC) will host a public hearing on the role of tax in aligning the green transition and competitiveness.   Potentially challenging outlook for Ireland’s electricity grid Eirgrid, which is responsible for managing, planning and operating Ireland’s high voltage electricity grid and market, has released its All-Island Resource Adequacy Assessment 2025-2034. The assessment looks at the balance between electricity demand and supply on the island of Ireland for the next 10 years. It shows “a potentially challenging outlook” in Ireland over the next few years, and that further new electricity generation will be required to secure the transition to high levels of renewable electricity over the coming decades.   Ireland and global climate 2024 show that robust adaptation is needed Met Éireann’s recently published ‘Ireland’s Climate 2024 Provisional Summary Report’ confirms that 2024 was the fourth warmest year on record for Ireland. The release coincides with that of the World Meteorological Organisation (WMO)’s State of the Global Climate 2024, which documents 2024 as the warmest year in global records, with key climate change indicators again reaching record levels. Commenting, Met Éireann Senior Climatologist Dr Pádraig Flattery warned that rising temperatures increase the chance of severe weather events and emphasise the need for climate action to reduce greenhouse gas emissions, as well as robust adaptation to deal with the consequences of climate change.   Public consultation on first National Public Procurement Strategy The Department of Public Expenditure NDP Delivery and Reform has launched a public consultation on the first National Public Procurement Strategy . The consultation will run for eight weeks and is open to all those with an interest in the future direction of public procurement in Ireland, including public bodies, NGOs, community groups, political representatives, academics and members of the public. Commenting on the launch, Minister for Public Expenditure, NDP Delivery and Reform, Jack Chambers, explained that “[t]he focus of the strategy will be on increasing SME participation in public contracts and leveraging public procurement to support sustainability and innovation concerns, it will also support increasing openness and transparency in public procurement processes.” Government is particularly keen to have inputs from members of the business community including social enterprises and SMEs.   Increase in Ireland’s climate finance spending Ireland’s recently published Climate and Environmental Finance Report 2023 shows an increase of 32 percent in Ireland’s climate finance spending between 2022 and 2023. The report, which is produced annually by the Department of Foreign Affairs and Trade, describes the levels, channels and focus of funding provided by the Irish Government to support climate action and environmental protection in developing countries. In July 2022 the Irish Government published Ireland’s International Climate Finance Roadmap, an all-of-government plan setting out the pathway for realising the target announced by the Taoiseach at COP26 to provide at least €225 million in climate finance per year by 2025.   High response to EV Grant Scheme for taxis, hackneys and limousines A statement published by ZEVI, the Department of Transport office to support  the switch to zero emission vehicles, has reported unprecedented interest from taxi, hackney and limousine operators in Ireland in the  2025 eSPSV Grant Scheme (eSPSV25), which is now fully subscribed. The Scheme helps accelerate the transition to EVs in the small public sector vehicle industry and supports those who are scrapping older, more polluting, or high mileage vehicles to go electric. The National Transport Authority (NTA) will temporarily pause the scheme to review and process the eligible applications received. Following assessment of the initial applications, the scheme may reopen later in the year. Separately, figures released by the Central Statistics Office (CSO) show that the number of new electric vehicles (EVs) licensed in February rose by 38 percent when compared with February 2024, meaning that the share of EVs among new private cars increased to 20 percent in February compared with 15 percent in the same month in 2024. The number of new plug-in hybrid electric vehicles (PHEV) licensed in February grew by 65 percent when compared with February 2024, increasing the share of PHEVs among new private cars to 15 percent in February from 9 percent in February 2024. The combined share of petrol and diesel cars among new private cars licensed year to date has fallen in comparison with 2024 from 51 percent to 42 percent.   Navigating the Nordic Sustainability Landscape: Key Insights for Irish Companies Enterprise Ireland have published a short guide for Irish businesses looking to align with the sustainability expectations of Nordic companies. The guide identifies several strategies that can be adopted, including embedding sustainability into the core business models, addressing the full ESG spectrum (conducting a Double Materiality Assessment), staying updated, communicating transparently, and pursuing certifications and eco-labels such as B-Corp, ISO14001 and ISO26000 and Nordic Swan Ecolabel.   BioPharmaChem industry carbon emissions associated with energy consumption drops, report finds A new report by BioPharmaChem Ireland (BPCI) finds that the biopharmaceutical and chemical sectors have made significant progress toward sectoral sustainability goals over the past three years despite a 5.8 percent increase in production and strong employment growth. The Sustainability Strategy and Responsible Care Report 2025, which tracks industry progress in energy, emissions, data, and culture, has found that between 2022 and 2024 carbon emissions fell by 26 percent, water use decreased by 2.9 percent, and energy consumption declined by 4.5 percent. Renewable sources now supply over two-thirds of the industry's electricity, including on-site generation. While efforts to reduce Scope 3 emissions are ongoing, the report highlights that 53 percent of sites face challenges in gathering the necessary data, and calls on the Government to further improve competitiveness in Ireland by improving the capacity and reliability of the electricity grid, supporting greater availability of grid storage solutions, improved smart grid systems for better energy management, and streamlined regulatory and planning approval processes for renewable energy projects.   NORTHERN IRELAND/UK Northern Ireland’s Energy Strategy Action Plan publishes Northern Ireland’s  Energy Strategy Action Plan 2025 - March 2025 has published, setting out a roadmap for 2025 to advance the transition towards secure, affordable and clean energy for the region. This is the fourth annual action plan to be published following the launch of the Executive’s Northern Ireland Energy Strategy ‘Path to Net Zero’ in 2021, which sets out a pathway for energy to 2030. The Energy Strategy Action Plan 2025 is a key step to achieving the Strategy’s commitment to self-sufficiency in affordable renewable energy. It was published alongside an Energy Strategy Action Plan Report 2024, detailing progress on a range of actions carried out by the Department and Government partners in 2024.    Implementing the Dasgupta Review The UK independent think tank Green Alliance has published proposals to create a framework to factor nature properly into economic decision making. The report, The nature of our economy: implementing the Dasgupta Review, follows the Dasgupta Review, commissioned by the UK Treasury and published in 2021, which exposed the failure in mainstream economics to account for the true value of nature, a failure the report says ultimately will erode GDP and lead to long-term economic instability.     Transparency in supply chains: a practical guide (accessible) The UK Home Office has published statutory guidance aimed at increasing transparency in supply chains, and urges businesses to be vigilant to ensure they are not knowingly or unwittingly complicit in this abuse taking place in their operations and global supply chains. The guidance ‘Transparency In Supply Chains (TISC)’ states that "No part of the world is free from modern slavery and no industries are immune to the risk of modern slavery”. According to the most recent Global Estimates of Modern Slavery, there were an estimated 27.6 million people living in forced labour in 2021 (of which 3.3 million were children), estimated to generate £185 billion in illegal profits every year.   EUROPE Omnibus update MEPs have voted to approve the proposed “stop-the-clock” procedure recommended under the EU omnibus which proposed simplifications to sustainability regulations, including the Corporate Sustainability Reporting Directive (CSRD) and to delay the next wave of companies coming into scope by two years, and to delay the transposition of the  Corporate Sustainability Due Diligence Directive (CSDDD). On Thursday 3 April, the European Parliament voted to postpone the application dates for new EU laws on due diligence and sustainability reporting requirements. Member states will have an extra year – until 26 July 2027 – to transpose the due diligence rules into national legislation.  Application of the sustainability reporting directive will also be delayed by two years for the second and third waves of companies covered by the legislation. Large companies with more than 250 employees will be required to report on their social and environmental measures for the first time in 2028 for the previous financial year, while listed small and medium-sized enterprises will have to provide this information one year later. Sustainability a priority for MEPs for 2026 EU Budget MEPs have adopted their priorities for the 2026 EU budget on Wednesday, emphasising defence, prosperity and sustainability. Next year’s budget should focus on strategic preparedness and security, economic competitiveness and resilience, sustainability, climate, and the single market, as MEPs call for additional investment in research, innovation, enterprises, health, energy, migration, border protection, digital and green transitions, job creation and opportunities for young people. The Commission is expected to present its proposal for next year’s budget in June 2025. The budget needs to be agreed between the Council and the Parliament by the end of this year.   WORLD Corporate income tax and the Net-Zero Transition (From our colleagues in Tax) The OECD has published a working paper on the impact corporate income tax (CIT) design can have on investment by the private sector in clean technologies to help achieve net-zero climate goals. Setting out a conceptual framework of the key channels through which CIT can influence investment in clean technologies, it also identifies policy implications and potential policy options to enhance the alignment of CIT with climate policy objectives.   US SEC votes to stop defending climate disclosure rules The US Securities and Exchange Commission (SEC) has voted to end its legal defence of its climate disclosure rules which required large corporations to disclose the impacts of climate change on their businesses. In 2024 the Securities and Exchange Commission (SEC) had adopted rules to enhance and standardise climate-related disclosures by public companies and in public offerings. The vote reportedly allows the SEC to “effectively walk[] away from its regulation requiring companies to report on climate risks and greenhouse gas emissions, without actually having to rescind the rules”. Technical Roundup (From our colleagues in Professional Accounting) Following Omnibus proposals, the Chair of the Global Sustainability Standards Board has highlighted short-term pressures that exist to weaken regulations and why now is the time for the EU to show global leadership.   7 April: European Financial Reporting Advisory Group (EFRAG) is holding “VSME in Action: Empowering SMEs for a Sustainable Future” looking at how the standard can be implemented.   EFRAG and the CDP have published correspondence mapping between the CDP question bank and ESRS E1. The International Sustainability Standards Board (ISSB) has published the recording of 'The future of integrated reporting and integrated thinking', its eighth 'Perspectives on sustainability disclosure' webinar and its March 2025 podcast discussing the latest developments around the ISSB. The IFRS Foundation has published a ‘Roadmap Development Tool’ to support jurisdictions in the planning and design of their adoption roadmaps for ISSB standards. It has also released series of webcasts to support companies in identifying and disclosing material information about sustainability-related risks and opportunities.   Articles How suppliers should be supporting their customers’ carbon accounting (Accountancy Age)   Climate Mitigation vs Climate Adaptation: What's the Difference? (Climate Action for Associations)   Big businesses can’t afford to overlook SMEs in their supply chain (Edie)   Catastrophe Experts Tap AI to Tackle Soaring Insured Losses (Bloomberg)   The broken rung in the career ladder - why women continue to earn less (The Irish Times)   EU pushes for citizens to prepare three-day survival kits (RTÉ)   Can Ireland bridge the gap to net zero? (Accountancy Ireland - Briefly)   Proposed public sector accounting standards ‘could encourage greenwashing’ (ICAEW Insights)   Resources Enterprise Ireland are running Sustainability Kickstarter workshops for SMEs. Workshops will be held on the 10th April, 2nd May, 16th May and the 6th June.   Accounting for Sustainability (A4S) has published a 4th edition of its Navigating the Reporting Landscape guide. New content includes an update on regional developments, such as California’s Climate Disclosure Rules and the new proposals in the EU Omnibus, as well as changes to international standards, such as those on sustainability assurance.    Events Chartered Accountants Ireland ESG Masterclass: Take your sustainability knowledge to the next level (ROI/NI) Masterclass designed for all professional accountants working in business or practice, wishing to consolidate their knowledge and understanding of the sustainability regulatory, reporting and assurance landscape. 9 April, 08:30 – 14.00, Virtual Cork District Society Chartered Accountants Ireland, Navigating Tomorrow: Finance, Sustainability & Strategy for Irish SMEs Paul O'Donovan and Associates, in collaboration with VBC, invite you to their April conference; "Navigating Tomorrow: Finance, Sustainability & Strategy for Irish SMEs". Tickets are free but registration is required. In person, Clayton Hotel, Cork city, Tuesday 15 April 2025,8.15am - 1.00pm Chartered Accountants Ireland, The SME and SMP Sustainability Workshop A workshop for SMEs and small/medium accounting practices (SMPs) on how to get ahead of the sustainability curve. This interactive half-day session will focus on positive actions you can take to understand the ‘trickle-down’ effect of the Corporate Sustainability Reporting Directive ('CSRD’), green public procurement, access to sustainable finance, and how to make your practice more sustainable to save costs and respond to staff and client demands. Virtual, 23 May, 9.30- 12.30; €60 members; €75 non-members; 3 hours CPD points. EPA, EPA Annual Climate Change Conference 2025 The EPA Annual Climate Change Conference will be held on Wednesday 28 May 2025 in Dublin Castle. Please save the date for this event. In person, May 28, 2025 Sustainability Centre You can find information, guidance and supports to understand sustainability and meet the challenges it presents in our online Sustainability Centre.  

On1 April the Ulster Society hosted legal webinar with A&L Goodbody's Stephen Geoghan focusing on The Procurement Act 2023. Now that the biggest shakeup in the UK public sector procurement in decades is live, this webinar is an opportunity to familiarise yourself with the new regulations and prepare to leverage new opportunities. Join Stephen as he presents a detailed analysis on the new regulations covering:  • The procurement process: How to engage early and protect your business • Post contract award: Is your contract at risk of termination? • Key takeaways  A recording of this webinar is available to view, for free and on demand HERE A pdf copy of Stephen's slides are available to view HERE  

In UK news, HMRC has launched its new email enquiry service for agents, and we look at the key tax announcements from last week’s Spring Statement, including the news that Making Tax Digital will be extended to even smaller businesses from April 2028. In Irish news, Revenue has issued new guidance on submitting RZLT returns and a delegation from the Institute, under the auspices of the CCAB-I, attended the recent meeting of the Business Tax Stakeholder Forum. In International news, the European Commission has welcomed the Court of Auditors’ special report on VAT fraud. UK 1. Read our overview and coverage of last week’s Spring Statement which included the announcement of ‘closing the tax gap’ and other miscellaneous measures and the extension of MTD. 2. HMRC launched its new email enquiry service for agents this week. Ireland 3. Read an update from the recent Business Tax Stakeholder Forum meeting. 4. Revenue has issued a new Tax and Duty Manual which provides information on submitting RZLT returns. International 5. The European Court of Auditors has published a special report on VAT fraud. 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.  

Revenue will be hosting information sessions in March and April for individuals over the age of 65. The sessions will be held in Dublin, Waterford and Mayo and advance registration is required. The sessions will run from 31 March 2025 to 9 April 2025 and will cover a range of topics including: Capital Acquisitions Tax Pay As You Earn Income Tax Local Property Tax Capital Gains Tax Law Society and Citizens Information Details on registration and the topics to be covered on the various dates are available on Revenue’s news webpage.

Last week, the Economic and Social Research Institute (ESRI) published its Quarterly Economic Commentary. In the press release which accompanied the publication, the ESRI noted that the Irish economy is in a strong position. Unemployment is currently 3.9 percent while income growth is expected to exceed 3.5 percent this year. The international climate is creating uncertainty however, and the impact of the any ensuing trade wars will have adverse implications for the domestic economy. The overall impact will be compounded if the US specifically targets pharmaceutical products

The new agent e-linking application went live last week, providing an online approval system for linking agents and customers. A summary of the new process and the steps involved in accepting an agent link request through myAccount and ROS are outlined in a dedicated Revenue webpage. Our news item from 3 March 2025 includes further information on the new process.  

Last Friday, the Department of Finance hosted the most recent meeting of the Business Tax Stakeholder Forum. The Institute attended the meeting under the auspices of the CCAB-I. The forum is an opportunity for key business tax stakeholders to engage with department officials of business tax matters. Among the items discussed were tax simplification, both domestic and EU, an update on the Funds Sector 2030 project, and EU and international tax developments. In recent times, the forum has provided a key opportunity for the Institute to engage with the Department of Finance and share our views on tax policy. Before Christmas, we provided feedback on areas of focus for tax simplification. You can read that submission here.

The Chancellor of the Exchequer Rachel Reeves delivered the Spring Statement last week on Wednesday 26 March. As expected, this was mainly an economic update coupled with further spending and welfare cuts. No tax rises were announced this time around with many commentators saying the Chancellor has ‘kicked the proverbial can down the road’ and that this will not be the case in the Autumn Budget later this year. The measures were focused on driving economic growth, building an NHS fit for the future, and keeping the country safe. However, what is clear is that UK businesses are entering a time of economic slowdown with tax increases looming next month (the key tax changes taking effect from April 2025 will feature in next week’s update). The Chancellor also claimed in her speech that households in the UK will be “over £500 a year better off” even after inflation. For millions still feeling the pinch, it was a surreal moment as fiscal drag is expected to create over 1 million more higher rate taxpayers in 2025/26 due to frozen personal tax thresholds. HMRC has sent several emails summarising the key announcements which you can read here and here, and the Institute for Fiscal Studies has published its reaction to the Spring Statement here.  The Chancellor has left little room for manoeuvre because of her own fiscal rules but has committed an additional £2 billion for social and affordable housing for 2026/27. More broadly, the Office for Budget Responsibility has improved its forecasts for economic growth in 2026 and beyond but halved its growth forecast to 1 percent in 2025. With geopolitical uncertainty continuing, the impact of global trade policies on the UK economy remains to be seen and the wider impact on the UK economy will need to be carefully monitored.   On the tax front, a further package of measures to close the tax gap featured which aim to raise over £1 billion in additional gross tax revenue per year by 2029/30. As part of this, it was announced that Making Tax Digital for income tax is being extended to the £20,000 to £30,000 cohort from April 2028. Late payment penalties for certain taxes will increase from April 2025 and four consultations were launched in this space. A range of additional measured also featured in the Spring Statement publications. 

Building on the package of tax gap measures which were announced at the Autumn Budget, a further series of announcements were made which included the extension of Making Tax Digital for income tax to even smaller businesses which we report on in more detail in a separate news item. Debt management and compliance investment  According to the government, at the end of 2024, the stock of tax debt (unpaid tax liabilities owed to HMRC) was over £44 billion, more than double the level five years ago. In order to reduce this, the government is further investing in HMRC’s debt management capacity which will include ‘an innovative test and learn pilot to collect more aged debts whilst also moving towards more automated debt recovery.  The government is also investing £87 million over the next five years in HMRC’s existing partnerships with private sector debt collection agencies to collect more unpaid tax debts. An additional £114 million will be invested over the next five years to recruit an additional 600 HMRC debt management staff; 500 more HMRC compliance staff will also be recruited via a £100 million investment.  Late payment penalties  Late payment penalties for VAT and income tax self-assessment taxpayers (as they join MTD) will increase from April 2025 onwards. The new rates will be 3 percent of the tax outstanding where tax is overdue by 15 days, plus an additional 3 percent where the tax is overdue by 30 days, plus an additional 10 percent per annum when overdue by 31 days or more. Consultations  The government also published four new consultations to support HMRC’s efforts in closing the tax gap: How HMRC can make better use of third party data to increase automation and close the tax gap – closes 21 May 2025 Proposals to strengthen HMRC’s ability to take action against those tax advisers who facilitate noncompliance from their clients – closes 7 May 2025 Closing in on promoters of marketed tax avoidance, whose contrived schemes leave their clients with unexpected tax bills – closes 18 June 2025, and Options to simplify and strengthen HMRC’s inaccuracy and failure to notify penalties – closes 18 June 2025. Counter-fraud capability and investigations  Additional criminal investigations will focus on delivering a strong deterrent. This will include tackling those who undermine legitimate trade and small business, fraud committed by the wealthy, fraud facilitated by those in large corporations, and by individuals and companies who make it possible for others to hide money offshore. Investigations will also address organised criminal attacks, focusing on illicit finance and complex money laundering schemes.   As part of the overall investment in HMRC resourcing, HMRC is overhauling its approach to offshore tax noncompliance by the wealthy, recruiting experts in private sector wealth management and deploying AI and advanced analytics to help identify and challenge those who try to hide their wealth, wherever they try to hide it.   During the next five years, the government will increase HMRC’s resources assigned to tackling wealthy offshore noncompliance by around 400 people, who are estimated to bring in over £500 million over the forecast period.   New informant reward scheme  A new HMRC reward scheme for informants will be launched later this year, with the aim of targeting serious noncompliance in large corporates, wealthy individuals, offshore and avoidance schemes. The new scheme will take inspiration from the successful US and Canadian models, rewarding informants with compensation linked to a percentage of any tax taken as a result of their actions.  Phoenixism  To tackle ‘phoenixism’, HMRC, Companies House, and the Insolvency Service will deliver a joint plan to tackle those using contrived insolvencies to evade tax and write off debts owed to others. This includes increasing the use of upfront payment demands, making more directors personally liable for company taxes, and increasing the number of enforcement sanctions to double the amount of tax protected to £250 million by 2026/27.   Change at HMRC  The government will also accelerate change at HMRC, including through introducing voice biometrics, using AI in taxpayer services and compliance, and running a customs digitalisation pilot sharing trusted trader credentials with US Customs and Border Protection.   Tax simplification  Further measures will be announced later in the spring to simplify the tax and customs systems, and in the summer, HMRC will publish a transformation roadmap. These measures will aim to collectively reduce administrative burdens so businesses and individual taxpayers spend less time on tax and customs administration.   Direct recovery of tax debts   HMRC will re-start ‘direct recovery’ of tax debts owed by individuals and companies who have the ability to pay but choose not to do so. The government will also explore options to automate the process for collecting lower value tax debts.   

Revenue has published a new manual RZLT Return which provides information for taxpayers and agents on the process for submitting a Residential Zoned Land Tax (RZLT) return. The manual outlines the process for submitting and amending an RZLT return, and the steps involved in making and viewing a payment of RZLT. An RZLT return must be submitted for each relevant site registered for RZLT and returns may be submitted from 24 March 2025. The first annual return must be filed and any tax due paid on or before 23 May 2025.

Making Tax Digital (MTD) for income tax is being extended to sole trades and landlords with qualifying income of more than £20,000 from April 2028. The Government also announced further changes to MTD as set out in the technical note “Modernising the tax system through Making Tax Digital”, details of which are provided below. The Institute has been engaging extensively with HMRC, together with the other professional bodies, to raise the impact of this major change to income tax reporting on individuals and their agents and the challenges that this will present.  There is now just over a year to the first tranche of mandation of MTD for income tax which will commence from April 2026 for those with gross income of over £50,000 and from April 2027 for those with gross income over £30,000. Even more worryingly, the government has also said that it will continue to explore ‘how it can best bring the benefits of digitalisation to more of the around four million taxpayers who have income below the £20,000 threshold’.  We will be discussing the MTD for income tax Spring Statement measures and announcements with HMRC via various stakeholder forum meetings in the coming weeks and months. Despite our reservations about MTD, the Institute will continue to work with HMRC on MTD readiness and is developing a cross-department MTD strategy to assist members in their preparations. We will also continue to represent members views as we approach April 2026 and will be conducting a short survey on MTD for income tax in next week’s Tax News.  End-of-year tax reporting for MTD   Some users of MTD for income tax will have other sources of income that need to be reported in Self-Assessment (SA). These additional income sources must be reported at the end of the tax year, alongside any necessary adjustments to their business income and expenses.   Previously, users would have been able to use HMRC’s online filing service to submit their final tax return. HMRC has now announced that its online filing service will not be available to do so and that MTD taxpayers must file their tax return through their MTD software. The government will adopt this change and introduce legislation ahead of April 2026.   One or more MTD-compatible software products will therefore be needed to meet SA filing obligations which makes the choice of software used by the agent/taxpayer of extreme importance.   Exempting/deferring certain groups from MTD  The government believes that some taxpayer groups will face disproportionate barriers to operating MTD and should be exempt. The following groups will therefore not be required to use MTD for income tax, (subject to notifying and satisfying HMRC that they are exempt):   taxpayers who have a power of attorney, ·non-UK tax resident foreign entertainers/sportspeople who have no other income sources that count as qualifying income for MTD, and taxpayers for whom HMRC cannot provide a digital service. The following groups will also not be required to join MTD for income tax over the course of this Parliament:   ministers of religion, Lloyd’s Underwriters, recipients of the married couples’ allowance, and recipients of the blind persons’ allowance. Additionally, individuals will not be required to use MTD until April 2027 if they have information that they would need to submit using the SA109 schedule. HMRC will work with stakeholders to finalise the design of a one-year deferral for these groups to allow time to incorporate into MTD the government’s changes to the taxation of non-UK domiciled individuals.   Legislation will therefore be introduced to defer/exempt these groups and the criteria for deferrals/exemptions will be set out in guidance once the legislation is finalised.   Finalising the policy framework for MTD and penalty reform  The government has announced several further changes to the design of MTD and penalty reform. These include:  changes to enable taxpayers with an accounting date of 31 March to start their MTD obligations on 1 April in the first year of operating MTD which will avoid the need for burdensome manual adjustments at the end of the tax year, and a power for HMRC to cancel/reset late submission penalty points and to cancel associated financial penalties; this enables HMRC to cancel penalty points, for instance, in periods prior to insolvency, so that penalty reform reflects HMRC’s general approach to insolvent taxpayers. HMRC will continue to engage stakeholders on these changes before legislation is introduced ahead of April 2026. 

Within the Spring Statement Green Book were a range of miscellaneous measures worthy of mention including news of a new online service for reporting and paying the high income child benefit charge, the launch of a consultation on advance tax certainty for major projects and a consultation on research and development (R&D) advance clearances.   High income child benefit charge (HICBC)   From summer 2025, employees liable to the HICBC will be able to report their family’s child benefit payments to HMRC via a new digital service and they will also be able to opt to pay the HICBC directly through PAYE, without the need to register for self-assessment (SA) and file SA returns.  Advance tax certainty for major projects consultation   At Autumn Budget 2024, the government announced in its Corporate Tax Roadmap that it would be consulting on a new process to provide increased tax certainty in advance for major projects. A consultation has therefore now been launched seeking views on taxpayers’ priorities which also sets out thinking on how a new process could work to support investment decisions. Responses should be sent to advancetaxcertainty@hmtreasury.gov.uk or advancetaxcertainty@hmrc.gov.uk by 17 June 2025.  As part of this, businesses will also be able to obtain certainty on the transfer pricing treatment of cost contribution arrangements through the UK’s existing advance pricing agreement programme.  R&D reliefs advance clearances consultation   The government has also published a consultation on widening the use of advance clearances in R&D tax credits. The aim of the consultation is to explore options to reduce error and fraud, provide certainty to businesses and improve the taxpayer experience. Views are sought on whether a system of advanced clearances would deliver these aims and the best way to design and operate such a system. This consultation closes on 26 May 2025 with responses to be sent to randd.advance.clearances.consultation@hmrc.gov.uk.