We have compiled the latest updates to various HMRC VAT publications, briefs and guidance. Readers should note that there are also numerous updates to VAT guidance and rules due to the UK’s departure from the EU. VAT: Introducing a new zero rate to extend the scope of patient group directions; Revenue and Customs Brief 7 (2023): change to the VAT treatment of drugs and medicines supplied under patient group directions; Interpretation of VAT and excise legislation; Buildings and construction (VAT Notice 708); Revenue and Customs Brief 6 (2023): VAT liability of digital publications — Supreme Court decision in News Corp and Ireland Ltd; Fuel and power (VAT Notice 701/19); Register to report and pay VAT on distance sales of goods from Northern Ireland to the EU; Notice in accordance with paragraph 8(2) of Schedule 9ZD to the Value Added Tax Act 1994 Insolvency (VAT Notice 700/56); Register to report and pay VAT on distance sales of goods from Northern Ireland to the EU; Notice in accordance with paragraph 8(2) of Schedule 9ZD to the Value Added Tax Act 1994; and Insolvency (VAT Notice 700/56).

In this week’s EU exit corner, we bring you the latest guidance updates and publications relevant to EU exit and the latest Trader Support Service bulletin is also available. We also remind you to that the Institute will be attending the next UK Domestic Advisory Group meeting on Monday 6 November and would welcome your feedback by Friday 3 November on specific areas of concern which arise in relation to the Trade and Co-operation Agreement. Miscellaneous updated guidance etc. The following updated guidance, and publications relevant to EU exit are available:- Authorised Consignee Temporary Storage (ACTS) location codes for Data Element 5/23 of the Customs Declaration Service; Remote internal temporary storage facilities codes for Data Element 5/23 of the Customs Declaration Service; Importing bananas you have to pay duty on into the UK; Authorisation type codes for Data Element 3/39 of the Customs Declaration Service; Additional Information (AI) Statement Codes for Data Element 2/2 of the Customs Declaration Service (CDS); and Upload documents and get messages for the Customs Declaration Service.

This week we bring you news about planned outages to certain HMRC services over this coming weekend and updated guidance is available for companies claiming the super-deduction or special rate first year allowances. HMRC has also published its most recent performance reports and HMRC’s Insolvency Team is commissioning a series of surveys to obtain feedback from insolvency practitioners. Planned outages to HMRC services Read the below message from HMRC about outages to some services over this coming weekend. “From 10:30pm on Friday 3rd November until 07:00am on Monday 6th November 2023 HMRC is making planned upgrades to some of our IT, moving our internal systems that support our tax credits work, and other services that rely on this infrastructure, to cloud-hosting. This means a small number of internal and external services will be either fully unavailable or have limited functionality during the migration. This will take place from 10:30pm on Friday 3rd November until 07:00am on Monday 6th November and will improve the reliability, resiliency, and security of the service. As per our business opening hours, there’s no impact across our telephone lines as they are closed for the weekend. Our Customs and International Trade line is open and this migration has no impact. The webchats that are operational during this weekend (Saturday only) and may be impacted are listed below.  Depending on the query, our advisors may only be able to provide generic advice. Needs Extra Support Online Services Helpline Self-Assessment Customer-facing impact  Impacted digital services detailed below will have suitable messaging explaining that the services is unavailable either on GOV.UK, PTA or HMRC’s App and will advise customers to check back from Monday at 07:00am. Services: Marriage Allowance Employee Expenses Tax Credits Service Help to Save PAYE Income Tax History SA – Set up a Payment Plan EPAYE – Set up a Payment Plan VAT - Set up a Payment Plan Exercise Environment Insurance Transport Taxes Service (amendments) Online Tax Registration Service Services and internal operational impacts are subject to change. We do expect services to be up and running by midday on Sunday 5th November if the migration is successful.” Super deduction and special rate first year allowance guidance The guidance on claiming the super-deduction or special rate first year allowance (“FYA”) on plant or machinery costs for companies has been updated. Readers are reminded that these capital allowances incentives came to an end on 31 March 2023 but were replaced by full expensing and a new 50% FYA for special rate and long life assets. The updated guidance on the super-deduction and 50% FYA is still relevant to companies making claims in respect of such expenditure incurred up to 31 March 2023 and will also be relevant thereafter to disposals of such assets in accounting periods either straddling 31 March 2023 or falling wholly after that date. HMRC performance reports HMRC’s has published its most recent monthly performance reports and specifically the report for August 2023.. From 2 October, HMRC is no longer aiming to operate to a 10-minute service level on the Agent Dedicated Line. The Institute regularly discusses HMRC performance at stakeholder forum meetings and welcomes your feedback at any time. HMRC’s performance continues to be under pressure due to ongoing budgetary constraints and high inflation Insolvency survey HMRC’s Insolvency Team announced in its September 2023 edition of Insolvency Guidance that it is commissioning a series of surveys to obtain feedback from insolvency practitioners. The first survey, which is now open, examines the experiences of insolvency practitioners’ in contacting HMRC’s VAT helpline and will remain open until 1 December 2023. 

Today, Tuesday 31 October 2023, is the self-assessment paper filing deadline for 2022/23 to avoid penalties. Readers are reminded that if an online self-assessment return cannot be filed by virtue of one of the online filing exclusions or special cases (search GOV.UK for details as these regularly change) meaning the return must be filed on paper instead, then in those cases, the 2022/23 paper filing deadline is extended to 31 January 2024. A reasonable excuse claim should accompany such returns.

Readers will be aware that the Institute has been lobbying HMRC from the beginning of September in relation to the 31 October 2023 deadline for selling second-hand motor vehicles under the VAT margin scheme, where these were bought in GB and transferred into Northern Ireland prior to 1 May 2023. HMRC’s VAT policy team confirmed to us in a meeting last week that dealers can continue to use the VAT margin scheme for such vehicles that were in stock on 1 May 2023 as long as these are sold by 30 April 2024. Hence the previous deadline has now been extended by six months. According to HMRC, there will be no further extensions to this deadline thereafter. The Institute is pleased to see HMRC have taken the decision to extend this deadline which clearly recognises the difficulties being experienced by dealers in selling these vehicles in the current economic climate. The guidance on GOV.UK has now been updated to confirm this. Once again, the Institute thanks those members and businesses who provided supporting information to assist us in achieving this result. HMRC’s email message confirming the extension says the following:- “We have listened to feedback from businesses about the 31 October deadline, and have now extended the period that you can use the VAT margin scheme for vehicles you had in stock on 1 May 2023 and have not yet sold. You can now use the VAT margin scheme for eligible motor vehicles that you purchased in Great Britain and moved to Northern Ireland before 1 May 2023 and still have in stock,  if you resell them by 30 April 2024. If you sell them after 30 April 2024, you will have to account for VAT on the full selling price. Find out more information about motor vehicles you had in stock on 1 May 2023.”  HMRC has also asked to us to issue a reminder that the new VAT related payment scheme should be used, where the relevant conditions are met, in relation to second hand vehicles bought in GB and transferred to Northern Ireland from 1 May 2023. The relevant guidance for such vehicles is available here. Should you have any queries in relation to the extension to the VAT margin scheme deadline or the new VAT related payment scheme, please get in touch.

Revenue has updated the Tax and Duty Manual which provides guidance on the EU reporting obligations for platform operators. The updated manual confirms that the registration portal for platform operators will open on 1 November 2023. It also confirms that the average annual foreign exchange conversion rate is to be used. 

Revenue has published an eBrief (no.232/23) regarding the Revenue Online System (ROS) permissions that must be in place in order for employers and their agents to report the information required under the Enhanced Reporting Requirements (ERR). As previously reported, from 1 January 2024, employers will be required to report to Revenue the payment of travel and subsistence, the remote working allowance, and benefits provided under the small benefit exemption at the time or before the payment is made.  Employers will automatically be assigned ERR permissions via their existing ROS certificate. Where ERR permissions are required to apply to any sub certificate, the employer must log into their ROS permissions screen to assign ERR accessibility to the sub certificate.  Agents can report ERR on behalf of their clients using the newly created agent permission. Financial Agents will receive the ERR permissions automatically via their existing ROS certificate. Non-Financial Agents will have to apply to Revenue for the ERR Agent certificate under their existing TAIN. An Agent who has ERR permissions will be able to assign sub certificates to ‘submit and view’ or ‘view only’ ERR.  Revenue anticipate 4 different combinations of Agent types under the PREM tax head:  Financial Agent (has all permissions)  Payroll & ERR Agent (can report Payroll & ERR)  Payroll Only Agent (can only report Payroll)  ERR Only Agent (can only report ERR)  The eBrief clarifies that while employers can have up to three different agents on file, an agent type cannot be duplicated. For example, an employer cannot have a Payroll & ERR Agent along with an ERR Only Agent.   At a recent meeting of the TALC ERR subgroup the Institute, under the auspices of CCAB-I, reiterated its dismay regarding the unwarranted additional costs for small employers and its overall concern with narrow timeframe and the lack of guidance before commencement on 1 January 2024. We will continue to liaise with Revenue on these requirements and will inform members via Tax News. 

Revenue has released a statement following the flooding caused by Storm Babet. It understands that taxpayers may have temporary cashflow difficulties that can impact on the timely payment of tax. Revenue is advising taxpayers facing tax payment difficulties due to the disruption caused by the recent flooding in Counties Cork, Waterford, Limerick, Kilkenny, and Louth to engage early with Revenue.   Revenue advises such taxpayers to contact the Collector-General’s office on 01 738 3663 to agree mutually suitable payment arrangements.  Speaking last week, Mr. Joe Howley, Collector-General, said:  “The disruption caused by severe weather events can give rise to temporary cashflow difficulties, and we are aware that this can be a worrying time for those impacted. Early engagement with Revenue in such cases is key, as we will work with taxpayers to come to a mutually agreeable solution. This will enable good compliance records to remain on track.  Revenue has a proven track record in successfully agreeing flexible payment arrangements with taxpayers, and taxpayers can be confident that we will take their financial circumstances and capacity to pay into account.” 

Revenue has issued a press release following the Supreme Court decision in The Revenue Commissioners v Karshan (Midlands) Ltd (“Karshan”). In Karshan, the Supreme Court outlined the key factors to be considered when deciding if a worker is an employee or a self-employed contractor. In its release, Revenue notes that the judgment provides significant clarity on the issue.  The Supreme Court ultimately ruled that drivers employed to deliver pizzas were employees for the purposes of income tax. Businesses (and their advisors) should familiarise with the details of the judgment, available on the Court Service website, as it is not limited to delivery drivers but is relevant to a broad range of work. 

Last week following publication of Finance (No. 2) Bill 2023 (“the Bill”), the Institute, under the auspices of the Consultative Committee of Accountancy Bodies – Ireland (CCAB-I), made representations to Revenue and the Department of Finance on various aspects of the Bill.   At the meeting of the TALC BEPS Sub-committee on Tuesday, there was a detailed discussion on the provisions relating to the implementation of the Pillar Two Minimum Taxation Directive. It will take several compliance cycles for businesses to fully adapt to these complex rules. From an Irish perspective, we will have to trust that our safe harbours have been appropriately designed to withstand international scrutiny.  At the joint meeting of Main TALC and the TALC Direct and Capital Taxes Sub-committee on Wednesday, there was a thorough discussion on all aspects of the Bill other than VAT, Excise and the Pillar Two provisions. On the Angel Investor Relief announced on Budget Day, this is expected to be introduced at Committee Stage discussions in the coming weeks. Practitioners also noted significant concerns with the proposed clarification of section 604A TCA 1997.  At the meeting of the TALC Indirect Taxes Sub-committee on Thursday, there was another detailed discussion on the VAT and Excise sections of the Bill. Practitioners noted concerns with the removal of provisions relating to determinations. Revenue’s view is that the section is no longer widely used. Practitioners also called for detailed guidance on the definition of “emergency accommodation”, expressing the complexity of these arrangements in certain circumstances. 

Professional Standards Department is pleased to publish its AML Supervision Report 2022/2023. This is the first Report to cover our AML supervisory activities in both jurisdictions, ROI and UK.

President Sinead Donovan was in the US this week, meeting with a variety of members and stakeholders. The insights gleaned on the trip will be put into action in the coming weeks and months, but among the key takeaways is that the US remains a destination of choice for Irish ACAs so our task is to drive greater awareness of the opportunities for members; our response to issues like the attractiveness of the profession, adapting to new sustainability reporting standards and cybersecurity will be shaped through collaboration with our US partners; and finally, our profession will continue to play a key role on both sides of the Atlantic driving and servicing inward FDI  in support of Ireland’s economy. Member engagement There is no doubt that the US remains a destination of choice for Irish ACAs and the President heard directly from these members during several office visits and two member events. The ACA proves to be a door opener for so many of our members when they arrive in the States, as indeed does the Mutual Recognition Agreement for members practicing, so our task now is to drive greater awareness of the opportunities and help new and existing members to access these.  Partner engagement As ever, the challenges for the profession are the same whether in Naas or New York. The attractiveness of the profession and sustainability reporting standards were two topics that, as expected, the President devoted a lot of time to in meetings with among others IAASB, AICPA, Chartered Accountants Worldwide Network USA, Deloitte EY, PwC, KPMG, and Harvard University.  How we as a profession adapt to the new reporting standards and educate our members on them will be shaped through such collaboration, and Chartered Accountants Ireland will be at the heart of that. The same goes for selling the attractiveness of the profession, with a focus on demonstrating the different routes into the profession and demonstrating through our actions our commitment to a healthy work-life balance. Perception is still an issue. In meetings with Boston College, the scale of the profession’s role when it comes to cybersecurity was reinforced. There are approximately 4million open roles in cyber security globally, and accountants are ideally placed to play a central role in tackling the challenge. The Institute held its inaugural seminar for members with Boston College in Dublin last April, and there is so much scope to expand this education to position members to have an impact.  Working for Ireland Inc It was great to meet the IDA and some of the companies (powered by ACAs) supporting inward FDI. Against the backdrop of a new global minimum corporation tax rate from 2024, and stiff competition for investment, our profession will continue to play a key role on both sides of the Atlantic driving and servicing that investment so well for Ireland’s economy. For our part, we will continue to ensure the Institute has a strong voice in demonstrating how the profession can continue to support FDI and be a strong resource for companies.