The Department of Enterprise, Trade and Employment has published the new national minimum wage rates that come into effect on 1 January 2024. The hourly rate for employees aged 20 and above will be €12.70. Further details on rates and conditions are available here. 

In the lead up to the 2022/23 online self-assessment (“SA”) filing deadline next month on 31 January 2024, HMRC are introducing restrictions which begin today on their SA and Agent Dedicated Line (“ADL”) helplines. Chartered Accountants Ireland has been discussing this with HMRC and would welcome your feedback on the operation and impact of these restrictions which come after similar restrictions in the lead up to the 2021/22 SA filing deadline, and restrictions to both the self-assessment helpline and the ADL earlier this year.   More information on the current restrictions are available in an email from HMRC which also sets out details of a change implemented from 7 December in respect of how repayments are notified.   Helpline restrictions  Between 11‌‌‌ ‌‌December 2023 and 31‌‌‌ ‌‌January 2024, HMRC are prioritising resource “to support self-assessment peak period”. The restrictions aim to direct anyone with a query which can be dealt with online to the relevant online service.   For agents, ADL advisers will only take calls about SA filing, payments or repayments and will be redirecting agents to use online tools for simple queries, wherever possible. This also means that agents with queries on other topics, including PAYE queries will need to use other contact channels for assistance. Agents can continue to use the SA digital assistant for all SA queries throughout this period.   Agents who call the ADL and whose queries are not specifically related to SA filing, payments, or repayments, including agents with multiple client queries, will be redirected to alternative channels, or asked to call back in February. During SA peak, the ADL will not be dealing with any PAYE-related calls, however such queries may still be directed to the Employer Helpline, where relevant.  Repayment notifications  From 7 December HMRC changed the process for notification of electronic SA repayments. There is no change to the repayment process itself, hence taxpayers will still receive any refund via their bank account. However, HMRC will no longer send a letter informing the taxpayer or their agent of the repayment as often these letters arrive after the repayment has been made, leading to confusion and increased contact.  HMRC is currently working on improvements to its IT systems in relation to SA repayment notifications and as a result has temporarily paused SA repayment digital notifications from 7 December 2023 while this is completed. HMRC will confirm when these are reinstated. 

With November being the most important month of the year for tax receipts, the Minister for Finance noted that the recent November Exchequer figures indicate “fiscal performance broadly in line with expectations to end-November, corporation tax recovers in key month”. The Exchequer surplus stood at €5.4 billion, to end-November, a decline of almost €7 billion in comparison with the same period last year. The decline reflects the transfer of €4 billion to the National Reserve Fund and increases in public expenditure.   November is a VAT-due month, it is the deadline for self-employed income tax payments, and the month in which the largest payments are made for corporation tax. Total tax receipts for the month of November amounted to €15.6 billion, €2 billion higher than November 2022.  Corporation tax receipts in November amounted to €6.3 billion, which is €1.3 billion, or almost 27 percent higher than November last year. This is broadly in line with expectations.  Income tax receipts were €2.1 billion, or 7.3 percent, ahead of their end-November 2022 position and reflect continued strength in the labour market.  VAT receipts to end-November are €1.6 billion, or 8.6 percent, up on the same period last year.  Commenting on the figures, the Minister for Finance, Michael McGrath T.D. said:  “The end-November Exchequer returns confirm that we are, broadly speaking, where we expected to be at this point in the year. The growth in income tax and VAT receipts we have seen over the course of the year points to the fundamental resilience of our economy despite all the external challenges we are facing.  The stand-out feature of the November performance is, of course, corporation tax: after three months of decline, a large increase in receipts this month means this revenue stream is once again comfortably ahead of last year.  However, it is crucial to place this in context. While corporation tax is now 4 per cent ahead of 2022, it is clear that the era of persistent over-performances is coming to an end.  The volatility in this revenue stream highlights the importance of ensuring that permanent fiscal commitments are not made on the basis of temporary receipts. Instead, the establishment of the two new long-term savings vehicles (the Future Ireland Fund and the Infrastructure, Climate and Nature Fund) will use these windfall corporation tax to help finance known future fiscal challenges, such as an ageing population, climate change and digital transition.” 

As a result of the changes to Making Tax Digital (“MTD”) for income tax, details of which were published at the 2023 Autumn Statement, HMRC has published draft regulations (and associated notices) for consultation. The consultation is open until 12 January 2024. By way of reminder, MTD for income tax will be mandated from 6 April 2026 for unincorporated businesses and landlords with turnover over £50,000, whilst those with turnover over £30,000 are mandated from 6 April 2027. The turnover between £10,000 and £30,000 population are not currently mandated, however HMRC has advised that the position in relation to these smaller businesses and landlords is still under review.  The draft regulations amend the Income Tax (Digital Requirements) Regulations 2021 which provide the statutory legislative framework for MTD for income tax.   Amendments included in the draft regulations and notices reflect recent government decisions included within the outcome of the MTD small business review. They also reflect the government announcement in December 2022 on the introduction of the phased mandation schedule for MTD for income tax.  The following specific changes are reflected in the draft regulations:-  the revised MTD mandation dates and thresholds announced in December 2022;  changes which aim to improve the design of quarterly updates;  the removal of end of period statements;  easements for landlords with jointly owned property; and  exemptions for specific groups.  This a technical consultation, focused on ensuring that the draft regulations and notices achieve their intended policy purpose. Please contact makingtaxdigitalconsultations@hmrc.gov.uk if you have any questions on the draft regulations and notices. Responses to the consultation should also be submitted to the same e-mail address.  Last week HMRC also published a media article on MTD for income tax which aims to raise awareness across a broad audience. The article is a part of the Guardian newspaper’s ‘Business Transformation’ pull-out. In addition, a new video was also launched featuring MTD’s new Programme Director, Craig Ogilvie.  

This week we bring you news of the government’s response to the Treasury Committee’s report which outlined the need for a review of tax reliefs and it's response to the same Committee’s report into venture capital tax reliefs is also available. We also update you on the removal of the functionality to copy existing VAT clients across to the Agent Services Account (“ASA”) and HMRC has issued an important reminder in its Company Tax Return Guide about the procedures to follow when making loss carry-back claims in corporation tax returns. And finally, guidance has now been published on the digital DIY Housebuilders Scheme which launched on Tuesday 5 December and which we told you about in last week’s Miscellaneous updates.  Update - removal of functionality to copy existing VAT clients to the ASA   In our Miscellaneous updates of 11 September, we advised that from October 2023 HMRC intended to remove the functionality that allowed agents to copy existing VAT clients to their ASA. We have now been advised that this change has not yet taken place and has been delayed to an unspecified date. We understand that this is due to technical complexities.  In the interim, agents are still encouraged to prepare for the removal of this functionality in due course by ensuring that existing VAT clients are copied across as soon as possible. Once this functionality is removed, VAT clients will need to be authorised using the digital handshake authorisation route available in the ASA.   Reminder: corporation tax loss carry-back claims in corporation tax returns  HMRC has issued an important reminder to companies and agents about the procedures to follow when making loss carry-back claims in corporation tax returns (“CT600”).   If the CT600 includes a loss carry back claim, you must tick box 45 to show that a repayment for an earlier or prior accounting period is due and you must supply a breakdown of the claim in your computations showing how losses are to be used. Failure to do so will result in HMRC being unable to process the claim.  The reminder includes confirmation that such claims do not of themselves require an amended return for the period in which the losses are utilised. Therefore, if making a loss carry back claim, you should not:-  submit an amended CT600 tax return for the same accounting period that does not include new information; or  submit an amended CT600 tax return for the period in which the losses are being used; or  submit an original CT600 tax return by post — all returns should be submitted online through the Government Gateway portal.  However, the above does not apply if an amended return covers other matters and is not solely in relation to the loss carry back claim, or if the loss carry back claim itself requires amending.  Resubmitting the original loss carry-back claim will also increase the time taken for HMRC to review and process this.  Further information on completing the CT600 tax return is available in the Company Tax Return guide. 

Recent media reports, Oireachtas debate and public commentary have highlighted concerns regarding misuse of the planning appeals system. Revenue has issued a press release to draw attention to the potentially serious consequences for any individual or business in receipt of payments of the nature described in these reports, where such payments have not been included in the appropriate tax return.  Taxpayers are reminded that there are a range of opportunities available to taxpayers to regularise their tax affairs, including self-review, self-correction and making an unprompted qualifying disclosure, as set out in Revenue’s Code of Practice for Revenue Compliance Interventions.  Revenue is encouraging those with information regarding the payment or exchange of funds or other consideration, which have ultimately influenced the planning process to pass the details on to Revenue for the appropriate follow up. Where an individual encountered such information within a work-related context, this information can be reported to Revenue under the framework of the Protected Disclosures Act 2014 (as amended),using Revenue’s online protected disclosures reporting form. Individuals who have acquired such information outside a work-related context can report the details to Revenue, in confidence, by completing and submitting Revenue’s online tax evasion report form.  Revenue welcomes all information about potential wrongdoing related to taxes, duties or customs controls, and treats all such reports seriously and with utmost confidentiality. Revenue follows up rigorously on all available information that suggests there may be a risk of non-compliance with tax and duty related obligations.  

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. The Department for the Economy in Northern Ireland has asked us to publicise a request from HMRC for participants to take part in HMRC’s Import One Stop Shop trial and we highlight some new resources which aim to support exporters and cross-border trade.  Import One Stop Shop (“IOSS”) trial  The Department for the Economy has been in touch with a request from HMRC to identify businesses who may wish to use the forthcoming VAT Import One Stop Shop (“IOSS”) system. HMRC is looking to speak with businesses who might be interested in using this facility ahead of the go live period next year. This potentially might allow those business access to training and could help resolve any initial teething issues, ahead of official launch.   The IOSS scheme is a VAT simplification scheme which the EU introduced on 1 July 2021. The UK is committed to making this scheme available in Northern Ireland. Following the introduction of the Windsor Framework, the IOSS scheme will be open to Northern Ireland businesses to register from 2024 (date to be confirmed).   Broadly, the IOSS is a monthly VAT reporting and payment system that businesses can opt to use where they sell (non-excise) goods to consumers in Northern Ireland or the EU, where the business is located outside the EU and the UK. The goods must be imported in consignments not exceeding £135 (€150). Once registered for the scheme, businesses are required to charge and collect any VAT due at the point of sale from the consumer and account for the VAT through their monthly IOSS return by submitting a single VAT payment. If you have any clients or are a business who might be interested in participating in the IOSS trial, please get in touch.  Resources for cross-border trade  Several new resources are available to support those engaged in cross-border trade. Invest NI has recently published updated pages on exporting and Inter-Trade Ireland has launched a cross-border trade hub which contains a range of different resources and useful guidance.  Miscellaneous updated guidance etc.   The following updated guidance, and publications relevant to EU exit are available:-  Safety and security requirements on imports and exports;  Making an entry summary declaration;  Overview of the Single Trade Window;  Report a problem using the Customs Declaration Service;  The Customs (Aerodromes and Miscellaneous Amendments) Regulations 2023; and  External temporary storage facilities codes for Data Element 5/23 of the Customs Declaration Service. 

The Minister for Finance, Michael McGrath TD, and the Minister for Housing, Local Government and Heritage, Darragh O’Brien TD, have announced the deferral of the initial liability date for the Residential Zoned Land Tax (RZLT) by one year, from 1 February 2024 until 1 February 2025.  This deferral was announced in Budget 2024. All local authorities published final RZLT maps at 1 December 2023. The deferral provides landowners further opportunity to submit requests for a change in the zoning of their land to local authorities in respect of the mapping process.  Speaking following the announcement of the deferral Minister McGrath said:  “The extension of the initial liability date of the Residential Zoned Land Tax by a year is an important step to ensure fairness and transparency in the process of implementing the tax.  Ireland requires increased housing supply to meet our housing needs. The RZLT aims to incentivise landowners to activate existing zoned and serviced residential development land for housing on identified lands and lead to the building of more homes. The tax measure is a key pillar of the Government’s response to address the urgent need to increase housing supply in suitable locations. However, affected landowners should have another opportunity to engage with the mapping process before the tax comes into effect, especially considering the application of the tax to previously unaffected lands for the first time. For these reasons, I have decided to defer the liability date to 1 February 2025. 

The Minister for Finance Michael McGrath has launched an online public consultation seeking stakeholder views on the taxation of share-based remuneration in Ireland. The purpose of the consultation is to allow stakeholders to submit their views on the current operation of share-based remuneration in Ireland, its impact on economic activity and the potential impact of suggested changes to the regime, all the while ensuring Ireland continues to meet international best practice standards.   The responses to the public consultation will feed into the overall review of the taxation of share-based remuneration and the Irish share scheme environment which will be undertaken over the coming months. The review will also examine the recommendations from the Commission on Taxation and Welfare in relation to share-based remuneration.  The online consultation opened on 5 December 2023 and closes on 22 January 2024. The Institute, under the auspices of the CCAB-I, is responding to this consultation. Members wishing to provide input can email us.   Commenting on the launch, Minister McGrath stated:  “Today I am delighted to launch a public consultation on share-based remuneration. As I announced in my recent Budget speech this consultation will form part of a wider review that will be commenced shortly.  I believe that it is essential that this comprehensive review be undertaken to ensure that our policies around share-based remuneration continue to support Irish companies in attracting and retaining highly skilled and motivated employees, which in turn helps to ensure that Irish enterprises have the necessary tools to grow and expand, and consequently to support Ireland’s economic growth.  This consultation provides stakeholders the opportunity to share their views and experiences, and to ensure their voice is an integral part of the review process. I would strongly encourage all stakeholders to participate in the consultation process.” 

Revenue has updated the Tax and Duty Manual that provides guidance for the Small Benefit Exemption. The updated manual provides additional information and examples regarding the Finance Act 2022 changes to this measure. Finance Act 2022 extends the small benefit exemption to up to two non-cash benefits totalling €1,000.   The updated guidance provides a link to the guidance material on Enhanced Employer Reporting (ERR) obligations, which (subject to Ministerial Commencement Order) require mandatory reporting to Revenue of the small benefit exemption from 1 January 2024 by employers.   

Last week the Institute, under the auspices of the CCAB-I, wrote to the Minister for Finance to ask for a delay to the implementation of Enhanced Reporting Requirements (ERR) for employers to enable businesses to prepare for this significant change. Employers have only recently been provided with limited guidance on the matter. The Frequently Asked Questions (FAQs) document was  published just last week. We also re-iterated member’s concerns over the need to report payments to Revenue on or before the time they are made stating that the administrative burden created by real-time reporting is disproportionate to the value of the information garnered, in particular for smaller businesses.   At the time of writing, the order to commence the legislation from 1 January 2024 has not been signed by Minister McGrath. We will continue to engage with Revenue on this matter and update members via Tax News. 

The OECD Forum on Tax and Crime (FTC) met in Rome recently to consider how to enhance international cooperation in disrupting tax crimes and illicit flows of money. Those in attendance stressed the OECD’s role and noted certain key areas to prioritise. These include increasing knowledge sharing and pooling, developing new mechanisms for systematic real-time information sharing, continuing to strengthen capacity building, and leveraging new technology and approaches to address vulnerabilities.