Revenue is developing a system whereby a notification will issue to an agent's ROS Inbox listing all clients that have been issued with a final demand that week. The notification is expected to issue each Monday following the issue of final demands to taxpayers earlier in the day. Final demands are preceded by an initial request for payment, providing the taxpayer with 7 days to make a payment. The Institute is inviting members to take a short two question survey to assess if members would find it beneficial to receive a notification to their ROS inbox with the weekly list of payment requests, in addition to the new list of final demands. Take the survey now.

Last week, the government of South Africa hosted the seventeenth plenary meeting of the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS). In a public statement by the Inclusive Framework, agreed at the meeting, members recognised the importance of securing certainty and stability in the international tax system, and the need to continue discussions on the Two-Pillar Solution and other items for a future agenda using a phased, evidence-based approach.

The FISC subcommittee has published a draft report on the role of simple tax rules and tax fragmentation in European competitiveness. On 24 April 2025 the subcommittee will discuss simplification, digitalisation and stronger cooperation among Members States to alleviate regulatory and administrative burdens, particularly for SMEs.

The FISC subcommittee will host a public hearing on “The role of tax in aligning the green transition and competitiveness” on 24 April 2025. The hearing will examine tax incentives for clean energy, aviation, and maritime transport and explore how fiscal measures can support the green transition and enhance sustainability in these key sectors.

Confidence in Northern Ireland’s economic outlook has deteriorated sharply, with only 8% of Chartered Accountants viewing prospects as ‘good’ or ‘very good’, according to the latest survey from Chartered Accountants Ulster Society. This marks a significant drop from last year’s already low figure of 17%, highlighting persistent concerns over economic stagnation, rising costs, and government policy. The survey, conducted among Northern Ireland’s Chartered Accountants, was carried out before President Trump’s tariff plan announcement, and presents a mixed picture of resilience and challenge. While businesses are adapting through AI adoption, sustainability initiatives, and flexible working arrangements, major economic pressures, including inflation, tax burdens, and workforce shortages, continue to weigh on growth prospects. Key Findings The survey shows that economic confidence has fallen in the last year. Only 8% of members believe the NI economy has strong growth prospects, down from 17% last year. 58% see the economy as either stagnant (42%) or contracting (16%). Inflation, high energy costs, and rising taxes are the most cited concerns. New US Tariffs, announced after the survey are expected to also play into concerns of local businesses. 60% of respondents believe financial distress is rising among businesses, though there are signs of improvement compared to previous years. While financial distress is still high, some members report improving conditions. There is strong support for tax reform to boost competitiveness. 59% support devolved corporation tax powers, with 64% advocating tax alignment with the Republic of Ireland to boost competitiveness. The UK’s exit from the EU continues to divide opinion for local businesses. 41% say Brexit has harmed Northern Ireland’s economy, while only 12% see a positive impact. 61% understand Northern Ireland’s unique dual market access as offering trade opportunities, but most of those surveyed feel that this potential positive is yet to be realised. The Windsor Framework receives a mixed response, with 1 in 5 businesses viewing it positively. The survey also shows that workforce and skills shortages persist. 56% of businesses struggle to recruit suitable talent. Many chartered accountants feel the education system is not adequately preparing young people for employment. Employers are investing in training, but 26% believe it is insufficient. The survey also shows that Artificial Intelligence (AI) and sustainability are gaining traction but present challenges for business. 79% believe AI will improve efficiency, but uncertainty remains around investment in AI solutions. Many local businesses are adopting green initiatives, with 55% investing in energy efficiency and 53% going paperless. However, 41% see sustainability efforts as an added cost, and 43% feel unprepared for sustainability reporting. Hybrid working remains common, but family pressures are growing. 43% of professionals work in a hybrid model, though some employers are pushing for more office time. Childcare costs remain a major barrier, with only 14% believing childcare is affordable and 27% of working parents adjusting their hours to manage family responsibilities. The survey also shows that confidence in Government is low, with scepticism about public finance management and economic strategy. 57% do not believe the government can manage public finances effectively. The UK’s new Industrial Strategy has also been met with scepticism. 52% do not believe the UK’s new strategy will be transformational. Call for Action The Ulster Society is urging policymakers to take immediate action to restore confidence in the economy. Key priorities include a detailed long-term economic strategy to support sustainable growth. The Ulster Society is also calling for greater investment in skills and education to address workforce shortages, as well as meaningful tax reform, including consideration of a more competitive corporate tax rate to stimulate investment. The accountancy body also calls for support for businesses navigating sustainability requirements, and AI integration. Gillian Sadlier, Chairperson of the Ulster Society, said: “Northern Ireland’s business community remains resilient, but business confidence is low. We are in straitened times due to global economic conditions, and this has been thrown into sharper focus by President Trump’s tariff policies. Businesses are facing increasing costs, skills shortages, and a lack of clarity from policymakers. “If we are to build a stronger, more competitive economy, we need decisive action from government, investment in skills and infrastructure, and policies that enable long-term growth.” 270 Chartered Accountants in Northern Ireland took part in the survey. Recommendations Establish a Bespoke Tax (Corporation Tax) Regime Revisit the potential to reduce the Corporation Tax rate in NI and consider other taxes that could be devolved: Members have noted the importance of significantly enhancing Northern Ireland’s investment appeal, especially for FDI and high-growth sectors (e.g. AI, clean tech, advanced manufacturing) by more closely aligning tax and wider policy with Ireland. Reduce Business Distress and Restore Confidence Stabilize Policy Signals: Commit to multiyear business tax policies and investment allowances to reduce uncertainty and support long-term planning. Expand Low-Interest Loan Schemes: Scale up access to low-cost finance for liquidity-constrained businesses, especially in sectors with export potential. Use Dual Market Messaging Strategically: Launch a global campaign positioning Northern Ireland as the only UK region with dual access to EU and GB markets, framing it as a unique investment gateway. Provide Certainty Post-Brexit and Maximize the Windsor Framework Guarantee Regulatory Continuity: Work with UK and EU institutions to secure long-term clarity on customs, standards, and trading rules specific to Northern Ireland. Strengthen Fiscal Transparency and Regional Strategy Create a NI-Specific Industrial Growth Plan: Align with UK-wide priorities but tailor the strategy to leverage NI’s strengths in Agri-tech, cybersecurity, advanced manufacturing, and green energy. Invest in Skills for a Future-Ready Workforce Fund AI, Digital, and Green Skills Hubs: Develop regional centres of excellence in partnership with FE colleges and universities to rapidly expand access to future-proof training. Align Curriculum with Industry: Ensure school and university curricula reflect current and emerging business needs, with structured industry placement programs. Support Responsible AI Adoption Develop Regional AI Adoption Standards: Create ethical and practical guidelines for AI use in NI businesses, ensuring innovation aligns with job security and data rights. Fund AI Workforce Transition Programs: Help workers shift into new roles as automation expands, supported by retraining subsidies and career counselling. Support Businesses in Sustainability Transitions Offer guidance on sustainability compliance and reporting to help businesses navigate regulatory requirements. Address Workforce Participation through Childcare Reform Expand Subsidised Childcare: Support working parents, especially women, by increasing childcare subsidies and extending eligibility. Promote Employer-Supported Childcare: Offer tax incentives to employers that provide on-site childcare or contribute to employee childcare costs.

A new report from Chartered Accountants Worldwide (CAW) reveals significant enthusiasm about the use of AI in the profession, with 85% of respondents expressing willingness to use AI tools - and 91% of those aged 18–24 already using the technology. Members of Chartered Accountants Ireland were surveyed alongside respondents from 13 other Chartered bodies around the world, with the findings showing that AI is increasingly integrated into business processes and that the profession is actively embracing change. Chartered Accountants Ireland is the largest professional body on the island of Ireland, representing almost 40,000 members and educating 6,600 students. Key findings: AI is reshaping the profession - 85% of respondents are willing to use AI tools. This rises to 91% among 18–24-year-olds and is accompanied by strong understanding (59%) of the potential uses of AI in accountancy.   AI is already in use - 83% of 18–24-year-olds use AI tools weekly - mainly for general productivity, data entry, reconciliation of accounts, and financial reporting. While 80% of 18–24-year-olds feel confident using AI in their roles, only 47% of those aged 55+ share that confidence. The most used tools are Gen AI chatbots, Microsoft Copilot and business intelligence tools. 45% say AI is already helping them to work more effectively and efficiently. 31% say they are already using traditional AI in their job. 29% are already using generative AI (GenAI) in their job.   Barriers to adoption - 52% of those surveyed state that the biggest barrier to AI adoption is insufficient skills and training. 30% also cite data security concerns as a reason they do not use AI more frequently.   Upskilling is essential - despite a high willingness to use AI, there is a skills gap and feeling of unpreparedness for the changes AI will bring. 30% have participated in AI-related training through their organisation, but 92% are likely to participate if offered the opportunity. 65% expect to receive AI-related training from their professional body, while 32% expect it from employers. Commenting Barry Dempsey, Chief Executive of Chartered Accountants Ireland, said “It is really encouraging to see strong early adoption and enthusiasm in the profession. It is clear from the research, however, that current usage is largely focused on general-purpose productivity tools, rather than technical work, with much of the momentum driven by individual initiative and self-directed learning. “Only 30% have participated in AI-related training through their organisation, and among those that have not engaged in training, 61% say it is because it is not offered. There is a high employee willingness to engage, with 92% saying they are likely to participate if offered the opportunity, so bridging this gap will be crucial to unlocking the further potential of AI for the profession. Smaller practices and businesses may not have the resources to deliver tailored AI training, so it’s essential that professional bodies like ours step in to bridge that gap. There is also an opportunity for the government to play a role in supporting widespread digital upskilling, particularly for SMEs, to ensure no part of the profession is left behind as AI reshapes the business landscape.” AI is an opportunity, not a threat There is consensus in the findings that AI will augment, rather than replace, the Chartered Accountant’s role, with human intelligence remaining at the heart of the profession. Chartered Accountants will continue to rely on core skills, and the training priorities of respondents reflects this: Critical thinking (77% rate this as a priority) Data privacy and security (71% rate this as a priority) AI ethics (66% rate this as a priority) Barry Dempsey continued: “Priorities such as critical thinking, an emphasis on data privacy and security and AI ethics go to the very heart of chartered accountants as trusted business leaders. Critical thinking will continue to be crucial in scrutinising and applying AI insights to provide effective advice to business/clients. Similarly, with increased AI use, it's even more important to ensure structured, effective training to use technology ethically and protect data responsibly. “56% of respondents agree that incorporating AI makes accountancy more attractive as a career choice and we remain committed to equipping the next generation of Chartered Accountants with the skills and mindset to lead in a world shaped by innovation, from their first steps as students to their roles as future business leaders.” Read the report in full CAW_AI-in-Accountancy-web.pdf  Read media coverage Chartered accountants confident about adoption of AI in their work, survey finds – The Irish Times 

On 10 April, the Ulster Society hosted a presentation by Rossa Keown, Head of Compliance and Enquiries at the Charity Commission for Northern Ireland, and Jeremy Twomey, Practice Consulting Manager, Chartered Accountants Ireland. In this webinar the presenters share essential updates and expert insights in the field of accounting and compliance for charity/ not for profit organisations. A recording of this webinar is available to view HERE A copy of Rossa's slides is available to view HERE A copy of Jeremy's slides is available to view HERE

Chartered Accountants Ireland is delighted to announce that past President Feargal McCormack is the recipient of the 2025 Outstanding Contribution to Accountancy Award at the Irish Accountancy Awards on 1 May. Previous winners of this award are Dr Laurence Crowley, Elaine Coughlan, Prof Patricia Barker, and Terence O'Rourke. We warmly congratulate Feargal on this significant recognition of his contribution to the profession. Former President of Chartered Accountants Ireland (2018/19), Feargal McCormack founded award-winning FPM Chartered Accountants in 1991 and subsequently this was the first accountancy practice in Ireland to secure private equity funding in 2022 when it merged with AAB Accountants. Feargalis currently AAB Senior Partner and Head of Family Business for the AAB Group. Feargal is the recipient of many awards and accolades, making him a deserving winner of this special award at the 2025 Irish Accountancy Awards. He was awarded Managing Partner of the Year at the 2018 British Accountancy Awards and was selected as The Irish Accountant of the Year in 2019. Feargal has been awarded Honorary Doctorate degrees by both Queens University Belfast (2021) and Ulster University (2018) for his contribution to business and community on the island of Ireland. In 2022, he received the Lifetime Achievement Award at the NI Business Eye Awards for significant and lasting contributions to: business; the accounting sector; the NI business community; and the economy as a whole. He currently is Senior Independent Governor on the Queens University Senate, Chairman of the GAA National Finance Committee at Croke Park, a Director of Co-Operation Ireland Limited and a Patron of Special Olympics Ireland.

On 10 April the Ulster Society's Inspiring Excellence series continued with Nicklas Pyrdol, CEO and Founder. This session focused on business culture and creating a business environment which helps individuals and organisations become more engaged. A recording of this webinar is available to view, for free and on demand, HERE   

Case reference Tax head  Legislation  Case stated requested  Matter under consideration    30TACD2025 Capital gains tax   Section 544 TCA 1997 Section 545 TCA 1997 Section 552 TCA 1997 Section 554 TCA 1997 Section 555 TCA 1997 Section 557 TCA 1997 Section 560 TCA 1997 Section 561 TCA 1997  No   The Appellant in this case was a partner in a partnership which had acquired land in 2009. The partnership built and developed a property at a total cost of €23,023,400 which included integrated plant and machinery at a cost of €5,506,195. The plant and machinery qualified in full for capital allowances and the Appellant claimed his proportionate share of the available capital allowances on his income tax returns. Over the period of ownership of the asset, there had been a part disposal and further capital additions leaving a base cost of €19,642,020. The partnership subsequently sold the property to a third party for €20 million; there was no apportionment of the sale price specified in the contract between land and plant and machinery. The property was used solely for the purposes of a trade or profession for the entire period of ownership. The Appellant completed a capital gains tax (CGT) return based on a disposal of a single asset being the land which included the buildings thereon and fixtures therein. The Appellant contended that the qualifying expenditure on plant and machinery was part of the acquisition cost and is an allowable deduction for the purposes of section 552(1). Revenue issued one CG50 clearance for the sale of the land and buildings including the integrated plant and machinery. Revenue submitted that the single asset sold consisted of two distinct elements from a tax perspective. One element was the plant and buildings which had qualified for capital allowances over the period of ownership and the second element being land which had not attracted capital allowances. Revenue stated that as the asset sold comprised of two different types of assets for tax purposes, separate CGT computations were required, and an apportionment was required under section 544 TCA to calculate the capital gain. Revenue argued that the loss accruing on the plant and machinery could not be factored in to reduce the capital gain. It was on this basis that Revenue had issued a notice of amended assessment. The Appellant submitted that when land is sold to a purchaser which necessarily includes all buildings and fixtures and fittings that are integrated into the building, they are an integral part of the building. The Appellant argued that he was therefore entitled to deduct qualifying expenditure on plant and machinery in the CGT calculation. The Appeals Commission held that the method adopted by Revenue was not provided for in Statute and therefore was incorrect.   39TACD2025 Corporation tax   Section 884 TCA 1997 Section 917 TCA 1997 Section 949 TCA 1997 Section 959 TCA 1997 Section 1077 TCA 1997 Section 1084 TCA 1997  No   The Appellant filed corporation tax returns (Form CT1) for the accounting periods 2021 and 2022 by June 2022 and April 2023 respectively and Notices of Assessment were issued by Revenue. The Appellant’s agent encountered IT filing acceptance issues when filing the iXBRL accounts and unknowingly the accounts did not file properly. In 2024, Revenue issued revised Notices of Assessments in respect of both years to include a surcharge for late submission of returns. This was on the basis that iXBRL accounts were not filed by the specified date. The Appellant only became aware on receipt of the revised Notice of Assessments that iXBRL accounts had not been filed. Revenue has issued tax clearance certificates for all years 2021 to 2024 prior to the issue of amended assessments. The Appellant argued that the non-filing of electronic accounts was not intended or deliberate, there was no loss to Revenue and that all taxes were paid on time. Once becoming aware of the issue, there was no unreasonable delay in remedying the matter and accounts were filed within a few days. Revenue stated the Appellant did not provide correspondence at the time of filing the iXBRL accounts for the accounting periods 2021 or 2022 of the technical difficulties encountered. The Appeals Commission held that Revenue correctly applied a surcharge under section 1084(2)(a)(ii) for failing to deliver a return on or before the specified return date. The Appeals Commission held that Revenue correctly applied a surcharge under section 1084(2)(a)(ii) for failing to deliver a return on or before the specified return date.

This edition’s Chartered Accountants Tax Case digest looks at a case in which the Court of Appeal overturned the decision of the Upper Tribunal (UT) and restored the previous decision of the First Tier Tribunal (FTT) in finding that the taxpayer was not UK tax resident during the tax year having spent a number of days in the UK due to exceptional circumstances beyond her control that prevented her from leaving. The focus of the case was on the meaning of ‘exceptional circumstances’ in the UK Statutory Residence Test (SRT) with the Court noting in its decision that this needs to be applied to individual circumstance as a whole whilst also highlighting that such circumstances can include the reaction of a taxpayer to matters such as the illness of a close relative, and other moral obligations. Commentators are arguing that this decision essentially appears to loosen the ‘exceptional circumstances’ test. At present it is unclear whether HMRC will appeal to the Supreme Court. The UK’s SRT is used to assess if an individual taxpayer is UK tax resident and took effect from 6 April 2013. This case is the first and only case to date in which the SRT has been the subject of an appeal through the UK court system. Background The case was an appeal by the taxpayer against the UT decision which held that the taxpayer was UK tax resident for the tax year ended 5 April 2016. During 2015/16, the appellant taxpayer had received a large dividend but did not include it on her self-assessment return on the basis that it was not taxable in the UK because she was not UK tax resident in that tax year as she was tax resident in Ireland. The concept of ‘days’ spent in the UK lies at the heart of the SRT. Ordinarily, every day when a person is present in the UK at midnight at the end of the day counts for the purposes of the test. However, certain exceptional days may not be counted. Under her particular circumstances, the second automatic overseas test was relevant meaning that as she was not UK tax resident for any of the preceding three tax years prior to 2015/16, as long as she spent fewer than 46 days in the UK in 2015/16, she would not be UK tax resident. Having spent 50 days in the UK during the tax year, the appellant relied on Schedule 45 para 22 (4) of Finance Act 2013 which provides that a day does not count as a day spent in the UK if a person would not be present in the UK at the end of the day but for exceptional circumstances beyond their control that prevent them from leaving the UK and they intend to leave as soon as those circumstances permit. On two visits totalling six days in December 2015 and February 2016 she was present in the UK at the end of the day because she felt compelled to stay to help her sister who was suffering from alcoholism, was suicidal and was failing to look after her children. She therefore argued that she had only spent 44 days in the UK in 2015/16 and was not therefore UK tax resident. HMRC argued that these reasons did not amount to exceptional circumstances, and that the appellant had not been prevented from leaving the UK. HMRC issued a closure notice amending her tax return to include the dividend as taxable income. The appellant appealed to the FTT which allowed her appeal finding that although the need to care for the consequences of her sister’s alcoholism and depression did not, of itself, constitute exceptional circumstances, the fact that the sister had minor children, for whom the appellant also cared, did in their view change the position. The FTT said that it was unnecessary for a legal obligation to care for the children to exist for there to be an exceptional circumstance and stated that moral obligations and obligations of conscience, including those arising by virtue of a close family relationship, can qualify as exceptional circumstances. Finally, the FTT concluded that those obligations may be strong enough to prevent a taxpayer from leaving the UK. HMRC appealed to the UT putting forward four grounds of appeal, all of which were accepted by the UT. The UT overturned the FTT decision finding that the circumstances of the two visits in question were not exceptional, and that the appellant was not prevented from leaving the UK on any of the days by exceptional circumstances. She was therefore UK tax resident in 2015/16 making the dividend taxable income in the UK. The appellant appealed to the Court of Appeal on six grounds, including that the UT erred in law in its approach to the test as to whether the appellant was prevented from leaving the UK, and in holding that moral obligations cannot be or cannot be part of the exceptional circumstances. Decision At the heart of the taxpayer’s appeal was whether the appellant’s circumstances were exceptional and whether they prevented her from leaving the UK. The Court held that what prevents someone from leaving the country is not limited to certain defined categories such as a legal obligation or physical impossibility, noting that the statutory example of exceptional circumstances in Schedule 45 para 22 (5) of Finance Act 2013 which refers to a ‘sudden or life-threatening illness or injury’ is not specifically limited to the injury or illness of the taxpayer themselves, or of someone for whom they have a legal duty to care. A moral or societal obligation was suffice and in the Court’s view is likely to have also been intended by Parliament. The Court held that the UT had taken too narrow a view of what could constitute an exceptional circumstance and ruled that the moral or societal obligation that the illness of a relative imposes on a taxpayer can form part of the overall circumstance. This should also be taken account of in considering whether the circumstances as a whole are considered exceptional. The Court allowed the appellant’s appeal on all grounds and restored the decision of the FTT. The full judgment is available at: https://caselaw.nationalarchives.gov.uk/ewca/civ/2025/106?query=A+Taxpayer&court=ewca%2Fciv

David Reaney and Emma Robinson explore HMRC’s publication, ‘Help with VAT compliance controls—Guidelines for Compliance GfC8’ and consider the implications for businesses. GfC8 was published in September 2024, but its profile has fallen well short of what would be expected for a publication of this level of detail and potential significance. On 25 September 2024 HMRC published ‘Help with VAT compliance controls—Guidelines for Compliance GfC8’. This publication has 10 parts and, if printed, would exceed 40 pages in length. On the landing page for the publication, HMRC states: “These Guidelines for Compliance (GfC) set out HMRC’s recommended approach and are designed to help you understand our expectations as you plan, carry out, and review the accounting and compliance processes that ensure VAT is accurately declared by your business.” In this article we have summarised, at a high level, the content within the publication. This summary is not intended to provide knowledge of the detail but rather act as a series of prompts to spark the reader’s interest in exploring it further. We expect that many of these concepts should be familiar to larger businesses but perhaps less so for small or medium sized ones. In our experience the existence of this guidance is not widely known and with HMRC’s clear statement around expectations, especially in an environment of increased audit activity, it is important for businesses to ensure they have considered the application of this guidance to their business. 1. Overview—Key Takeaways In our view, the best way to understand and digest the content is to start with two key messages which are threads running through the content. HMRC expect businesses to have written processes and procedures for their VAT compliance. HMRC expects VAT to be included in an overall tax control framework which should include risks identified, controls to address the risks, an identified owner of the risks and processes to monitor the risks and the response on an ongoing basis. In our experience many businesses still do not have detailed written procedures for VAT compliance and a range of different approaches to tax control frameworks is applied. Given HMRC’s assumption that the ‘digital journey’ under Making Tax Digital for VAT is able to be evidenced, e.g. by flow diagram, we expect almost all businesses will have work to do to meet the HMRC expectations as outlined in GfC8. 2. Summary of Guidelines for Compliance GfC8 The guidelines encompass a range of topics designed to cover the tax compliance process and are set out into 10 different parts. The best way to understand how these fit together is to split them into (i) topics focused on the end-to-end VAT compliance process and (ii) topics which have been identified as specific risks within that process. A. End-to-end process 1. Purpose, scope and audience The guidelines are for UK VAT registered businesses who use invoice accounting, meaning they account for VAT when invoices are issued and received (essentially this will be all VAT registered businesses aside from those operating special schemes, e.g. cash accounting). They provide the taxpayer with HMRC’s recommended approach and are designed to help the taxpayer as it carries out and reviews the accounting and compliance processes to ensure VAT is accurately declared. 2. General approach to VAT compliance controls This section provides information on good practices to help manage VAT accounting and compliance processes which includes (but is not limited to): Risk management; Control design considerations; and Documentation for internal controls. 3. Order-to-cash The overall control objective of Order-to-Cash (‘O2C’) is the timely, complete and accurate recording of transaction and payments. O2C represents the typical set of business functions used to manage Business to Business customer orders from sales order, fulfilment, billing, customer payments and recording transactions in financial accounts.  4. Procure-to Pay The overall control objective of Procure-to-Pay (‘P2P’) is the timely, complete and accurate recording of transactions and payments received. P2P represents the typical set of business functions used to manage Business to Business purchasing processes and include purchase orders, receipt of supply, tax invoice being received, credit notes and discount adjustments and supplier payments. 5. Record to report Record to report (‘R2R’) is an accounting process which involves collecting, processing and presenting information to provide strategic, financial and operational analysis. It also covers the steps involved in preparing and reporting the overall accounts. R2R covers both external and internal reporting and generally, the R2R function is not engaged in processing transactions but instead focuses on the aggregation of existing data to meet reporting requirements. B. Specific risk areas identified 6. Employee expenses Often viewed as a high-risk area by HMRC, expenses processes exist for capturing, authorising and paying various kinds of reimbursed business costs to employees. HMRC has set out guidance for various control points on employee expenses relating to the system configuration, the expense process, business entertainment and auditing the expense claims. 7. VAT reporting Relevant for business who adopt invoice accounting, it includes detail on VAT reporting control objectives for the following categories (note this list is not exhaustive): Organisational unit structure, General ledger posting, Making Tax Digital for VAT regulations, VAT reports, Consolidation of return figures, and Manual adjustments.  8. VAT reporting—manual adjustments Manual adjustments to VAT reporting can occur for different reasons including consolidation of totals from separate business functions or systems. HMRC have included detail on control objectives for common types of adjustments including adjustments for errors and corrections, how to deal with one-off or irregular supplies such as disposal of assets, adjustments under the capital goods scheme or partial exemption restrictions and bad debt adjustments. 9. Outsourcing Businesses processes such as IT services, legal services, financial and accounting services can be outsourced as well as the businesses VAT compliance function. Even where the business chooses to outsource some functions this does not outsource the risk, and legal responsibility remains with the commissioning organisation. 10. Next steps It is expected that businesses may recognise new elements of good practice and it is HMRC’s view that implementing the guidelines can lead to improvements in systems and processes. Businesses are encouraged to take proactive steps to ensure compliance which might include: Reviewing and updating record-keeping practices; Implementing internal compliance audits; Developing a compliance strategy; Engaging with HMRC; and Stay informed about penalties.  3. Conclusion Despite its low profile to date, this guidance marks a key development in the UK's tax compliance landscape. By outlining clear expectations and emphasising the importance of transparency, accountability, and communication, these guidelines aim to foster a more compliant and efficient business environment. Businesses should take proactive steps to align with these guidelines, ensuring that they are well-prepared. With careful planning, businesses can navigate the new compliance framework successfully and avoid potential penalties for non-compliance. Referring back to the two key messages outlined above, we would encourage businesses to review internal written processes on controls and the overall tax control framework to ensure that these would at least meet, if not exceed, HMRC’s expectations. Perhaps the best way to assess your current position is to consider how you would demonstrate that you meet HMRC’s expectations should you be asked to do so in a VAT visit in the near future. Finally, we would encourage particular attention is paid to the specific areas of risk such as employee expenses. If you have queries about any specific section, please contact us. David Reaney FCA, CTA, is Indirect Tax Partner at KPMG Emma Robinson CTA, Indirect Tax Associate Director at KPMG