The Minister for Enterprise, Trade and Employment, Simon Coveney TD, announced a package as part of Budget 2024 to assist businesses with ongoing challenges. The range of tax measures include improvements to the R&D Tax Credit, a new Angel Investor Scheme with a reduced Capital Gains Tax Rate of 16 percent for individuals, and improvements to the EIIS. These measures will particularly benefit start-ups and SMEs. The Minister also announced the Increased Cost of Business Scheme (ICOB), which is a once-off grant for small and medium businesses.  Welcoming the increases in personal income tax credits, reduction in the USC and the delay in the increase in Employer’s PRSI Contribution until October 2024, Minister Coveney said it was a pro-business Budget:  "As a government we have supported businesses with targeted interventions and supports, particularly through the extraordinary challenges of recent years. I recognise though that those challenges haven’t gone away, including very high energy costs. For that reason we’re introducing the Increased Cost of Business Scheme which will benefit up to 130,000 Small and Medium enterprises.  The aim of the Scheme is to provide financial support to those firms which have been most impacted by additional business costs, by providing a tiered grant equivalent to up to half business rates for this year. This will also go some way to helping businesses meet the increase in the Minimum Wage to €12.70, which is obviously an important step towards the government’s commitment to introducing a Living Wage.  I’m really pleased too to see the introduction of a new Angel Investment Scheme. It will be a standalone relief, with a reduced Capital Gains Tax rate of 16% and will be targeted at angel investors who invest in ‘innovative’ SMEs. While the details of the scheme are being finalised, Enterprise Ireland will have a key role in certifying eligible businesses that the angel investor chooses to invest in.  The changes to our R&D tax credits from 25% to 30% and the increase in the payment threshold to €50,000 are also really welcome for large and small businesses alike. The increase in the rate will mean that any companies in-scope will be eligible to the same value of the R&D tax credit before the implementation of the new minimum effective corporation tax rate."  You can read more about some of these measures in Chartered Accountant Ireland’s Budget 2024 special newsletter.    

Check out the latest items on the Agent Forum. Remember, in order to view each item, you must be signed up and logged in. All agents, who are a member of a professional body, are invited to join HMRC’s Agent Forum. This dedicated Agent Forum is hosted in a private area within the HMRC’s Online Taxpayer Forum. You can interact with other agents and HMRC experts to discuss topical issues and processes.

Revenue has launched a public consultation on modernising Ireland’s administration of Value-Added Tax (VAT). Revenue’s objective is to introduce real-time digital reporting for VAT, supported by electronic invoicing (eInvoicing).  Advancements in digital technology offer the possibility to align VAT compliance obligations more closely with normal business processes, reducing compliance costs and yielding efficiencies for tax-compliant businesses, while enabling Revenue to focus more effectively on combatting fraud. At European Union (EU) level, discussions are currently underway on the European Commission’s VAT in the Digital Age (ViDA) proposals for similar developments in respect of cross-border transactions between Member States.  This consultation focuses on modernising Business to Business (B2B) and Business to Government (B2G) VAT reporting through eInvoicing. The consultation period will run from Friday 13 October 2023 to 12 January 2024. The consultation, in questionnaire format, can be viewed here.  The Institute, under the auspices of the CCAB-I will respond to the consultation and members wishing to provide input can email us.  Announcing the commitment on Budget Day, Minister McGrath further commented:  “With the continued advancement of technology, it is important that the State continuously assesses its current operations to ensure that we are keeping pace with that advancement and that we are fully availing of the opportunities available.  Therefore, I welcome today’s announcement from the Revenue Commissioners launching a public consultation on updating and modernising Ireland’s VAT system, which represents an important start on this significant body of work. I would encourage businesses and their representatives to engage with the public consultation and to have their say in the development of the future of VAT reporting and VAT invoicing processes.” 

Do you use HMRC online services? Don’t be caught out by the planned downtime to some services. HMRC are warning about the non-availability of specific services on the HMRC website, a range of services are impacted. Check the relevant page for information on planned downtime.

HMRC’s latest schedule of live and recorded webinars is now available for booking. Spaces are limited, so take a look now and save your place. A webinar is also being held on the VAT reverse charge for the construction sector, which will take place at 1.45pm on Tuesday 14 November. Businesses can sign up here. HMRC has also sent an email setting out details of a National Minimum Wage webinar.

In this week’s EU exit corner, we bring you the latest guidance updates and publications relevant to EU exit. The latest Trader Support Service bulletin is also available and HMRC has also launched an enhancement to the advanced valuation ruling service which is now available to all traders. Advance valuation ruling service update Previously, agents who represented traders who were not able to use a business tax account could not avail of HMRC’s advance valuation ruling service as this was only accessible through the business tax account. This has now been made possible. HMRC’s advanced valuation rule service intends to provide traders and agents with legal certainty on the valuation method for imported goods, for a period of three years. The service has been operating since April 2023. Miscellaneous updated guidance etc. The following updated guidance, and publications relevant to EU exit are available:- Notices made under the Customs (Northern Ireland) (EU Exit) Regulations 2023; Notices made under the Customs (Northern Ireland) (EU Exit) Regulations 2020; Data Element 2/3: Document and Other Reference Codes: Licence Types – Imports and Exports of the Customs Declaration Service (CDS); Data Element 2/3 Documents and Other Reference Codes (National) of the Customs Declaration Service (CDS); Making an entry summary declaration; Appendix 2: DE 1/11: Additional Procedure Codes of the Customs Declaration Service (CDS); Authorisation type codes for Data Element 3/39 of the Customs Declaration Service; Data Element 2/3: Documents and Other Reference Codes (Union) of the Customs Declaration Service; Apply for an Advance Valuation Ruling; and Additional Information (AI) Statement Codes for Data Element 2/2 of the Customs Declaration Service (CDS).

This week we bring you news about a recent issue with student loan deductions and payrolled benefits in kind (“BIKs”) and HMRC is promoting the use of the ‘Pay by Bank Account’ service which is available from online filing services. Probate queries are now handled by the Courts and Tribunal Service instead of HMRC and a new toolkit is now available to help agents and advisers assess if a taxable remittance to the UK has been made. And finally, HMRC has issued a reminder email about recent changes to the UK’s research and development tax relief regimes, including the new claim notification form and the additional information form which must be used. And HMRC has also asked us to share with you an email on the McCloud Digital Service Launch and changes to the Agent Dedicated Line. Issue with student loan deductions and payrolled BIKs  HMRC has recently identified that a small number of student loan borrowers have been overcharged student loan repayments on their Self-Assessment (“SA”) tax return. The issue has arisen because HMRC calculates student loan repayments using the total PAYE income declared on the SA return. However, student loan deductions are not due on payrolled BIKs that are not subject to Class 1 NIC. Information is contained in Agent Update 112 on the steps HMRC is undertaking to correct this. In addition, guidance on the steps to take when completing the next SA return to prevent a reoccurrence of this issue are also available.  Paying HMRC using open banking – enhancement HMRC has asked us to highlight its ‘Pay by Bank Account’ service (which makes use of opening banking technology) which is available from online filing services and which has recently been enhanced with further enhancements due to be launched soon. Previously the only option was to make an immediate payment to HMRC which sometimes made this unattractive for taxpayers filing their return in advance of the due date for payment of the relevant tax.   HMRC has recently enhanced the service to make it possible to schedule payment for a future date (which cannot be beyond the due date for payment). This feature is now live for the following taxes: VAT; PAYE; PAYE settlement agreement; PAYE late payment or filing penalty; and Class 1A NIC. HMRC also intends the service to be available soon for: Capital gains tax; Self-assessment; Simple assessment; Corporation tax; VAT one stop shop; the soft drinks industry levy; and the plastic packaging tax. Changes to probate phone lines  From Monday 2 October, HMRC is no longer offering a dedicated probate phone line. If a person has a probate query, they should contact the HM Courts and Tribunals Service probate phone line. If a person has an inheritance tax query, they should contact HMRC. 

In its response to the Tax incentives for occupational health: Consultation, the Northern Ireland Tax Committee recommends that a significant increase be made to the current £500 benefit in kind (“BIK”) exemption limit for occupational health. In addition, the UK Government should also consider a BIK exemption for private medical insurance, where there is a link to returning to work. This would be of particular benefit in Northern Ireland where NHS waiting lists are longer than the rest of the UK. An overall review of UK employment taxes policy and a number of recommendations also feature to reduce the cost of employment. Read the key recommendations in the Committee’s submission on page 10.

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 2023. A reasonable excuse claim should accompany such returns.

At the recent meeting of the FTA, which brought together tax commissioners and delegates from around the world, representatives agreed on new areas of collaboration to transform the future of tax administration. The three areas identified were the vision of Tax Administration 3.0, effective implementation of the Two-Pillar Solution, and enhancing global capacity building efforts.

A new report published by the OECD reflects on the importance of the international tax agenda for African economies. The report was commissioned at the request of the G7 president, Japan, to inform discussions at the G7-Africa Ministerial Roundtable held in October.

The OECD has published a new convention on implementing Amount A of Pillar One. Amount A of Pillar One sets out rules for the reallocation of profits of the largest and most profitable multinationals to countries regardless of their physical presence. As such, it is seen as a key measure in bringing international tax policy into the modern era. The OECD has forecasted that the proposals could produce global annual tax revenue gains of as much as €32 billion with the greatest gains flowing to low and middle-income countries.