Recent trends The Institute’s Professional Standards Department has recently seen an increase in the frequency and complexity of proposed restructures of accounting and audit firms including: Institute firms acquiring or merging with other accounting and audit firms; Changes in a firm’s principals (retirements, additions); Creation of new firms within a firm network structure (including the splitting of an existing firm into a number of smaller firms sometimes with a focus on a particular business line or jurisdiction); Interests in a firm being fully or partially acquired by larger firms or other external investors including the involvement of private equity investors in firm/network ownership structures. These trends are observed in both Ireland and the UK. Early engagement with the Institute advised Firms who are considering a change in the firm’s structure or ownership are advised to engage with the Institute’s Professional Standards Department at an early stage in the process.  Such early engagement is important to ensure that any impact on existing or proposed firm authorisations, and/or on the AML supervision of any entities in the structure, is fully understood and properly planned for.  Law and Institute Regulations in both Ireland and the UK set out detailed eligibility criteria which must be met by firms authorised in reserved areas such as audit and investment business.  These eligibility criteria include specific requirements regarding the qualifications of principals and those having ownership/control at authorised firms.  While Institute Regulations require firms to notify the Institute promptly after a change in circumstance which could impact authorisations takes place, firms will benefit from early engagement with the Institute in relation to proposed restructuring transactions.  Firms will, no doubt, want to avoid a situation where a significant transaction concerning the firm’s structure has taken place only to discover that the revised structure negatively impacts the firm’s eligibility for authorisation in a key area. Firms considering a restructure should contact the Institute at authorisations@charteredaccountants.ie.  The Institute will advise the firm regarding the information which should be shared with the Institute initially and as the restructuring plans progress.  The Institute will request information to enable a full understanding of the proposed restructure and the impact on the firm’s eligibility for authorisation(s).  Such information is likely to include the detailed agreements and documentation underlying a transaction such as revised partnership agreements, constitutional documents such as articles of association and where relevant, service level agreements between entities within the revised structure. Frequently, the complexity of restructuring transactions requires that the Institute dedicates significant time to review the relevant documentation, engage with the firm’s principals and conclude in relation to ongoing or new authorisations as a result of a firm restructure.  A firm’s engagement with the Institute early in the restructuring process helps ensure sufficient time for Institute consideration and for the processing of any new applications for individual or firm authorisations arising. The Institute cannot provide legal advice in relation to potential firm structures.  The Institute assesses information provided to conclude whether the Institute can continue to provide authorisations to the restructured firm(s) in reserved areas in accordance with the Institute’s Regulations. Oversight bodies In certain cases, it may also be appropriate for a firm and/or the Institute to engage with relevant oversight bodies such as IAASA or the FRC.  For example, an audit firm which is registered with the FRC as a UK public interest entity (PIE) auditor will be obliged to share information with the FRC in relation to a transaction which could impact UK audit registration. Fees For new notifications of restructuring arrangements received on or after 1 January 2025, the Institute may charge a separate fee to firms for the consideration of the impact of a firm restructure on a firm’s authorisations in reserved areas and/or on AML supervision where relevant.  The fee will be dependent on the complexity of the proposed restructure and the work involved in the Institute’s assessment of all relevant information.  This fee will contribute to the cost incurred by the Institute in the consideration of the proposed restructure and may include a contribution towards any legal advice which the Institute needs to undertake in this regard. Further information Any queries in relation to any of the matters raised above can be directed by email to authorisations@charteredaccountants.ie

On 28 January the Ulster Society held a thought-provoking webinar addressing the pressing challenges organisations face around skills and talent. This lunch-time session explored: The anticipated impact of the Programme for Government for Northern Ireland on skills policy. Current trends in Higher Education and Further Education and their role in shaping the workforce. The latest research on changing skills demands, including the influence of AI and sustainability commitments. Real-world examples of how leading local organisations in all sectors are tackling skills gaps, encouraging returners to work, fostering upskilling and training, and dealing with talent attraction and retention. Our panel of experts shared their insights and experiences, offering practical takeaways that apply across all sectors. A recording of this webinar is available to view, for free and on demand HERE

Revenue has recently updated two other Tax and Duty Manuals. Details are set out below. The updated manuals are as follows: Electronic Relevant Contracts Tax system to include further links to additional information on the operation of this tax. The additional links relate to relevant operations, principal contractors and subcontractors. The Unpaid Remuneration manual to remove a reference to section 989 TCA 1997 and to update an example.

Revenue has updated the Tax and Duty Manual on the Controlled Foreign Company (CFC) rules to includes changes made in the Finance Act 2024 and Finance Act 2023. The changes are as follows: An amendment to the provision providing for the Irish defensive measures in respect of the CFC rules and to include the updated EU Code of Conduct list of non- cooperative jurisdictions for tax purposes Amendment to the rules for calculating ‘undistributed income’ of the CFC arising from the introduction of the new corporation tax exemption for certain foreign dividends Pillar 2 related amendments to the CFC rules for creditable tax and effective tax rate exemption.

Revenue has updated the Stamp Duty Manual Part 7 Section 83D- Repayment of Stamp Duty where land used for residential development. The manual applies to single dwelling and multi-unit developments. The updated manual contains new and updated examples and guidance on record retention and information dissemination. It also includes two new appendices which contain the following: Appendix 1 includes a checklist of the conditions to be satisfied to qualify for a repayment and also the conditions to be satisfied to avoid a clawback. Appendix 2 contains a comprehensive guide on how to make a repayment claim using Revenue’s eRepayments system. 

Revenue has updated the Tax and Duty Manual on leases of farmland to reflect a Commission Regulation increasing the allowable ceiling of de minimis aid from 16 December 2024. Section 81D of the Stamp Duties Consolidation Act 1999 provides relief from stamp duty for a lease of farmland whose term is not less than six years and does not exceed 35 years. In addition, the lands must be used exclusively for farming carried on by the lessee on a commercial basis and with a view to the realisation of profits. This relief is considered a State Aid therefore the manual has been updated to increase the allowable ceiling from €20,000 to €50,000 with effect from 16 December 2024. The manual has also been revised to note that the ceiling applies to the amount of all de minimis aid that is granted in accordance with the Regulation, whether given by way of tax relief or direct grants.

Revenue’s second newly published Tax and Duty Manual on the RZLT sets out the operational guidelines for the registration of a site for these purposes. These guidelines set out the registration responsibilities of liable persons in relation to the sale of a relevant site which are outlined below. RZLT is an annual tax which commences in 2025 and is calculated at 3 percent of the market value of land within its scope. Returns and payments are due on or before 23 May 2025. The RZLT does not apply to certain properties, such as those already subject to the Local Property Tax (LPT). Local authorities have created and published maps identifying land within the scope of the RZLT and these maps will be revised by 31 January each year. Maps should be reviewed to determine if a property is liable to RZLT. The manual also outlines how to: Register a site for the RZLT Register a site for the RZLT where planning permission was granted on a portion of the site Submit a declaration on the commencement of non-residential development.

Revenue has published a new Tax and Duty Manual containing guidelines on the operation of the RZLT. These guidelines set out the responsibilities of liable persons in relation to the sale of a relevant site. The guidelines specifically outline the relevant process in respect of the following: Submitting a RZLT transfer or sale return Submitting a RZLT transfer or sale return within a group structure How to make a RZLT payment.

Revenue has updated the Tax and Duty Manual on the Digital Games Corporation Tax Credit outlining how the credit is claimed and used where expenditure is incurred in accounting periods commencing on or after 1 January 2024. The main changes are as follows: Claims for an interim digital games corporation tax credit must be made in Form CT1 for the accounting period in which the expenditure was incurred. This claim must be made within 12 months from the end of that period, Claims for the digital games corporation tax credit must be made in Form CT1 for the accounting period in which the last of the expenditure was incurred. This claim must also be made within 12 months from the end of that period, Where the final cultural certificate is issued and the date is less than 3 months prior to the expiry of the 12 month period, the company has an extended period to make a claim. In these cases, a claim must be made three months from the date on which the final cultural certificate was issued, and The company must elect how the credit is to be treated; either as an overpayment of tax, an offset against tax liabilities, or as a repayment to the company by Revenue.

Revenue has updated the Tax and Duty Manual on the surcharge on certain undistributed income of close companies to include new and updated examples illustrating the application of the surcharge. Some sections of the manual have been reorganised and extra clarifications included

In this week’s post EU exit corner, we bring you the latest guidance updates and publications relevant in the post EU exit environment. The most recent Trader Support Service bulletin is also available as is the latest Brexit and Beyond newsletter from the Northern Ireland Assembly EU Affairs team. Readers are again reminded that from 31 January 2025 an entry summary declaration (ENS) must be submitted for goods imported from the EU to Great Britain (GB). Also from the same date, HMRC has issued an email reminder about the new safety and security declarations required for all EU imports into GB. Entry summary declarations required for certain imports from 31 January 2025 HMRC is encouraging businesses involved in importing from the EU into GB to familiarise themselves with the new ENS requirements and has provided a summary of the key information. Detailed guidance is also available on GOV.UK. Miscellaneous guidance updates and publications How to claim a repayment of import duty and VAT if you've overpaid, Check if a business holds Authorised Economic Operator status, Make an entry summary declaration using the Import Control System 2, Data Element 2/3: Documents and Other Reference Codes (Union) of the Customs Declaration Service, and Appendix 1: DE 1/10: Requested and Previous Procedure Codes of the Customs Declaration Service (CDS).

In this week’s miscellaneous updates, a new independent review of the loan charge has been announced by HMRC Treasury to bring the issue to a close. HMRC has issued a clarification about certain company tax returns submitted before 10 September 2024 and the Public Accounts Committee has recently opened an inquiry into the cost of the tax system. The latest schedule of HMRC Talking Points live and recorded webinars for tax agents are available for booking. Spaces are limited, so take a look now and save your place. And finally, check HMRC’s online services availability page for details of planned downtime and the online services affected. New loan charge review Last week HM Treasury announced that a new independent review into the loan charge has been launched (23 January) when the Exchequer Secretary to the Treasury (XST) in a Written Ministerial Statement announced that Ray McCann, a former President of the Chartered Institute of Taxation, will lead the review. The review will examine the barriers preventing those who are subject to the loan charge reaching resolution with HMRC where they have not already settled and paid their tax liabilities in full. It will also recommend ways in which they can be encouraged to settle with HMRC. The reviewer is tasked with reporting and presenting their recommendations to the XST by Summer 2025. The terms of reference of the review set out the context, scope, and objectives of the independent review in more detail. The review team can be contacted at contact@lcreview2025.org.uk. The following publications provide more detail on the review: Independent review of the loan charge, and Loan charge review launched. Company tax returns submitted before 10 September 2024 On 10 September 2024, HMRC updated its guidance on how to complete a company tax return for accounting periods straddling 1 April 2023. This required companies to use box 326 (and not box 625) to report the number of related 51 percent group companies. HMRC has now clarified that returns submitted before 10 September 2024 do not need to be amended to reflect the updated guidance. New Public Accounts Committee (PAC) inquiry into the cost of the tax system The PAC is conducting an inquiry into the cost of the tax system. The PAC has recently been scrutinising HMRC’s customer services, underpinned by the National Audit Office (NAO) findings in 2024 that delivering responsive customer service continued to be one of HMRC’s biggest challenges. The NAO is also currently undertaking a project which will report on drivers of cost in the tax system which is expected to be published shortly in winter 2024/25. The study aims to help understand how elements of the tax system drive these costs, while establishing what progress HMRC has made in reducing costs and improving efficiency.  Based on the NAO report, the PAC expects to hear from senior HMRC officials on topics including:  What costs the UK tax system imposes on HMRC taxpayers and their intermediaries, Challenges in tackling the costliest parts of the system, and   How HMRC is taking opportunities to reduce costs.  The PAC has published the requirements for written evidence submissions as part of its inquiry and advises that it is unable to accept material as evidence that is published elsewhere.