The Chancellor of the Exchequer announced last week that this year’s Autumn Statement will take place on Wednesday 22 November 2023. As usual, the Institute will be analysing the tax announcements for members, and any subsequent developments, in Chartered Accountants Tax News.  The Office for Budget Responsibility has also been commissioned to prepare an economic and fiscal forecast to be presented to Parliament alongside the Chancellor’s Autumn Statement. 

If businesses have second-hand motor vehicles in stock that they bought in Great Britain and moved to Northern Ireland before 1 May 2023, the VAT margin scheme can only be used if those vehicles are sold by 31‌‌‌ October 2023. The Institute is discussing the impact of this deadline with HMRC, and the need to extend it.   We are aware that many second-hand car dealers have significant pre-1 May 2023 vehicles in stock which are selling very slowly due to the ongoing inflationary crisis and general economic conditions.   If sold after 31‌‌‌ October 2023, VAT must be accounted for on the full selling price of the vehicles as the conditions for the new second-hand motor vehicle payment scheme, which only applies to eligible motor vehicles moved from Great Britain to Northern Ireland after 30 April 2023, will not be met. 

This year’s Secretary General tax report has been published providing an update on the progress on the OECD’s Two-Pillar Solution. The report also provides updates on recent work on indirect tax, tax transparency, and other areas of focus for the OECD. 

This week we bring you news of an extension to the work of the HMRC taskforce on clearing post more than 12 months old, and advice for finalising 2021/22 Self-Assessment (“SA”) returns which were filed with provisional figures/estimates. HMRC has also published new guidance on “negative earnings” and the regulations which give effect to changes in transfer pricing records have been laid. A new online tool is now available to check your tax code and updated guidance has been published on basis period reform together with the online form to obtain details of overlap relief which was launched today as expected. HMRC has also announced a forthcoming change to the functionality that enables agents to copy across existing VAT clients to their Agent Services Account (“ASA”) and has updated the Agent Standard, which sets out what HMRC expect from agents representing or advising taxpayers. Update on work of HMRC taskforce clearing post more than 12 months old  In July we outlined how HMRC had begun to implement its plans for dealing with agent post more than one year old which had not been responded to, and how agents could contact HMRC to action post more than a year old. Agents are able to use the Agent Account Manager team to escalate these cases via an online form. HMRC has since reviewed progress on this and has decided to continue with this work with no end date specified at present.   We would therefore encourage agents to use this process because although HMRC is identifying such post in its post queues, cases may be missed. We understand that once sufficient progress has been made on post more than 12 months, HMRC will then be seeking to address post in the 10-12 months old category.  2021/22 SA returns with provisional figures/estimates  Last month HMRC began sending letters to agents to encourage them to finalise any 2021/22 SA returns filed with provisional/estimates figures. HMRC is asking that these be amended by 30 November 2023 if actual figures are now available, or by 31 December 2023 if they are not yet available.   It should be noted however that this request does not displace the 31 January 2024 statutory date for amending these returns. Unfortunately, the agent letter does not include a list of affected clients, however HMRC can provide this on request by the agent.  Guidance on negative earnings  For the first time, HMRC has published guidance on negative earnings and clawback of bonuses. The guidance describes how employees may be able to claim an income tax refund.   Transfer pricing regulations  The Transfer Pricing Records Regulations 2023, which give effect to the record keeping requirements in the OECD’s 2022 Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations, were laid over the summer. These regulations introduce master file and local file as UK documentation requirements for multinationals with turnover of  €750 million or more and have effect for corporation tax purposes in relation to returns for accounting periods beginning on or after 1 April 2023, and for income tax purposes from the 2024/25 tax year.  New tool to check your tax code  HMRC recently launched a new online tool “Check what your tax code means” which aims to assist taxpayers with understanding their tax code and what it means for them. To check what a tax code means, taxpayers need their tax code to hand together with an estimate of their annual income including details of any benefits and pension income. This new tool also directs taxpayers to the relevant service to change their tax code in specific instances.   As this is a new tool, HMRC is seeking feedback on user experiences via a screen at the end of the tool. Although the new tool is helpful to taxpayers, Chartered Accountants Ireland continues to advocate that HMRC should develop an online process which enables agents to amend taxpayer codes for their clients.  Basis period reform  HMRC has published an updated guidance note on the basis period reform rules which commence with the changes required as a result of the transitional year 2023/24. From 2024/25, the current year basis of assessment will change to the tax year basis. More detailed guidance on basis period reform is available in HMRC’s Business Income Manual.  HMRC has also now launched the online form which enables a taxpayer or their agent to contact HMRC and request details of unused overlap. The need for HMRC to provide taxpayers with details of unused overlap relief was a recommendation of this Institute in its response to the consultation on basis period reform in summer 2021.  Change to Agent Services Account functionality  When using their ASA, agents can currently copy over existing client relationships for VAT and Income Tax Self-Assessment (ITSA) from their old Government Gateway ID. HMRC will be removing the functionality to do so in respect of VAT from October 2023. There is no change proposed to the functionality for copying ITSA clients to the ASA which will therefore remain in place.  Agents are therefore advised to ensure that existing VAT clients are copied across to their ASA before October. Once this functionality is removed, VAT clients must be authorised using the digital handshake authorisation route available in the ASA.  

Last week, the Institute, under the auspices of the CCAB-I, wrote to the Minister for Finance, Michael McGrath T.D., to highlight significant concerns our members have about the proposed introduction of Enhanced Reporting Requirements (ERR) which will require all employers to report to Revenue details of certain non-taxable benefits and payments to employees from 1 January 2024.   While it is accepted that employers already maintain records of the reportable benefits, integrating these records with a real-time filing requirement is a complex task and, in our view, unnecessary.   We have suggested that an annual return should be sufficient to provide Revenue with the necessary information while also taking into account the burden the reporting requirement will place on employers. Over the past number of months, we have been informing Tax News readers that employers will be required to report details of small benefits, travel and subsistence and remote working allowances paid to employees and directors from 1 January 2024. This new requirement was introduced in Finance Act 2022 and is set out in Section 897C TCA 1997.    As previously reported, in Tax News, representatives from the Institute, under the auspices of the CCAB-I, attend meetings of the Tax Administration Liaison Committee (TALC) Enhanced Reporting Requirements Subgroup and Main TALC to discuss the implementation of enhanced reporting requirements. At each meeting our representatives have raised their concerns around the practicality of real-time reporting as well as concerns with the additional costs for businesses associated with the new measures.  Revenue intends to hold information webinars on the new enhanced reporting requirements for employers commencing 14 September 2023. Invitations to attend the webinars will be delivered to the employer’s ROS inbox and an email notification is also to be provided.  CCAB-I will continue to liaise with Revenue and will inform members via Tax News. 

On 31 August 2023, Papua New Guinea deposited its instrument of ratification for the MLI (The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting). Then on 5 September 2023, Romania confirmed the completion of its internal procedures in preparation for ratification of the MLI. 

We’d like to hear your views on HMRC’s consultation on the taxation of employee ownership trusts and employee benefit trusts. The consultation closes on 25 September 2023 and examines potential proposals to reform the tax treatment of each of these types of trust. Let us know your views before Monday 18 September 2023.  The aim of the consultation is to ensure that the tax regimes for these trusts remain focused on the targeted objectives of rewarding employees and encouraging employee ownership, whilst preventing tax advantages being obtained through use of these trusts outside of these intended purposes.   There’s also still time to let us know your views on the on the consultation examining potential new tax incentives for occupational health. We’d like to hear from you on this consultation by Friday 29 September 2023. 

In this week’s EU exit corner, we bring you the latest guidance updates and publications relevant to EU exit. Further guidance was published last week in relation to the Windsor Framework and the latest Trader Support Service bulletin is also available. And finally, we bring you more on the announcement last week that the UK has agreed a deal to associate to Horizon Europe.  Windsor Framework updated guidance  Last week HMRC published the following updated guidance documents (which includes guidance on moving parcels to and from Northern Ireland):-  The Windsor Framework - further detail and publications; Sending parcels to and from Northern Ireland;  Moving parcels from Great Britain to Northern Ireland under the Windsor Framework from 30 September 2024; and  The Customs (Northern Ireland) (EU Exit) (Amendment) Regulations 2023.  Horizon Europe  Last week the UK agreed a deal to associate to Horizon Europe, the EU's key funding programme for research and innovation. From 7 September 2023, UK researchers can bid into Horizon, certain that all successful UK applicants will be covered through the UK’s association (or through the guarantee) for the remainder of the programme. All calls in Work Programme 2024 will be covered by association and the UK guarantee scheme will be extended to cover all calls under Work Programme 2023.  For more information, see:- UK joins Horizon Europe under a new bespoke deal; and  Joint Statement by the European Commission and the UK Government on the UK’s association to Horizon Europe and Copernicus.  Miscellaneous updated guidance and publications   The following guidance, and publications relevant to EU exit are available:-  Customs declaration completion requirements for Great Britain;  Customs, VAT and excise UK transition legislation from 1 January 2021;  Reference Documents for The Customs Tariff (Preferential Trade Arrangements) (EU Exit) Regulations 2020;  Reference documents for The Customs (Reliefs from a Liability to Import Duty and Miscellaneous Amendments) (EU Exit) Regulations 2020;  Reference Documents for The Customs (Tariff Quotas) (EU Exit) Regulations 2020;  Reference document for authorised use: eligible goods and authorised uses;  Check simplified procedure value rates for fresh fruit and vegetables;  Apply for an Advance Origin Ruling;   Classifying edible fruit, vegetables and nuts for import and export;  Valuing imported fruit and vegetables using simplified procedure values with Method 4;  Check if a business holds Authorised Economic Operator status;  Notices made under the Customs (Import Duty) (EU Exit) Regulations 2018; and  Maritime ports and wharves location codes for Data Element 5/23 of the Customs Declaration Service. 

Remote and hybrid work is changing employee eating habits, productivity and work-life balance. Deirdre O’Neill explains how employers can foster healthier and more productive teams Employees who work from home are more likely to eat indulgent foods, snack between meals and work longer hours than their workplace-based colleagues, new research from Compass Group indicates. More than half of workers globally said they struggle to maintain a healthy diet while at work, with employees who work from home finding it hardest to resist temptation. Figures from Compass Group show that 53 percent of home-based and hybrid workers in Ireland admit to regularly eating indulgent foods during their working day. They were also found to snack on average 1.9 times a day, almost 20 percent more than workplace-based employees. Healthy eating expectations and realities The survey found that most workers recognise the productivity and well-being benefits of a healthy diet during their working week. Sixty-seven percent of respondents said that what they eat and drink at work directly impacts their productivity, and, of the Irish respondents, 77 percent said the food and drink they consume has a direct impact on how they feel. Hybrid workers are making the effort to maintain their health while in the office. Seventy-five percent in Ireland said they make a concerted effort to eat healthier foods when they are in the workplace. With snacks readily available in the kitchen cupboard and the hassle of planning and preparing balanced meals, employees working from home find it hardest to maintain healthy eating habits while working. Age-related eating habits Healthy eating has a generational component, as well. Younger workers in Ireland are most interested in healthy eating and its impact on productivity. Millennials are likelier to choose a healthy snack during their breaks (48 percent versus 44 percent of Baby Boomers), and Gen Z snacks more than any other demographic, averaging 2.3 snacks per working day, sometimes replacing a main meal. Despite their snacking, however, 87 percent of Gen Zers agree that what they eat and drink at work directly impacts how well they work, compared to just 56 percent of Baby Boomers. Work-life balance The survey revealed that home-based workers are nearly three times more likely than workplace-based colleagues to exercise during the working day. However, 66 percent of hybrid workers said they work longer hours when working from home, detracting from their work-life balance. The research also highlighted that hybrid workers miss the opportunity to socialise with colleagues during their working day, with 60 percent saying they would like to eat lunch with colleagues more often. Employers can enhance the health of their people by offering wellness programmes, encouraging regular exercise and providing nutritious food options while hybrid employees are in the office, and creating a supportive work environment that values work-life balance, ultimately fostering happier and more productive teams. A healthy bottom line In a world where remote and hybrid work has become the norm, maintaining healthy eating habits and work-life balance presents unique challenges. Employers are pivotal in promoting employee wellness through tailored programmes, nutritious offerings and a balanced work environment, ensuring a healthier and more productive workforce. Deirdre O’Neill is the Managing Director at Compass Ireland

Navigating the evolving cyber threat landscape demands vigilance. Aaron Hambleton explores four critical vulnerabilities shaping the second half of 2023 In the ever-evolving landscape of business technology, the second half of the year presents a host of challenges that demand the unwavering attention of organisations and cybersecurity experts. As organisations navigate this dynamic environment, it is imperative to be acutely aware of the vulnerabilities that loom large on the horizon, poised to test the resilience of businesses and their security measures. As we delve into the nuances of these vulnerabilities, it becomes evident that vigilance and proactive measures are the keys to safeguarding organisations. Here are four vulnerabilities organisations and businesses should be aware of going into the second half of 2023. 1. AI-powered social engineering attacks Artificial intelligence (AI) has entered almost all spheres of the business world. While AI brings numerous benefits and advancements, it also introduces new cybersecurity risks, such as social engineering attacks. These attacks use manipulative tactics to deceive the victims into revealing sensitive information or trespassing organisations’ security infrastructure. To execute these attacks, cybercriminals rely on AI-based natural language processing (NLP) algorithms to generate more realistic and human-like phishing emails, chatbot interactions or voice calls. According to Forbes, “AI technology is advancing so rapidly that hackers are very possibly developing their own custom AI applications specifically designed to take social engineering to the next level.” Detecting these malicious campaigns is getting harder for the average employee, which is why significant training is required to know what to look for and how to prevent escalation. 2. Cloud-based breaches Cloud computing has become the norm in today’s digital landscape, offering scalability, flexibility and cost-efficiency to businesses. However, the widespread adoption of cloud services exposes organisations to new cybersecurity threats, making them a major concern in 2023. Cybercriminals target cloud environments to exploit misconfigurations, weak access controls or insecure application programming interfaces (APIs). A recent example of the consequences of cloud misconfigurations is the Toyota data leak, in which the personal information of over two million customers was exposed after an access key was leaked on GitHub for almost five years. “Upon discovering the GitHub [repository], Toyota immediately made it private. Two days later, the company changed the access key to the data server. The Japanese giant commissioned an investigation into the blunder and was unable to confirm or deny whether miscreants had spotted and used the key to pilfer data from the server,” reports The Register. 3. Enhanced phishing attacks Phishing attacks involve cybercriminals posing as trustworthy entities with the intention of deceiving individuals into divulging sensitive information or performing malicious actions. With over 500 million phishing attacks reported in the US in 2022, this number is expected to rise further this year. Threat actors are continuously refining their techniques to make phishing emails and messages appear more genuine and convincing, which takes a trained eye to spot. 4. Zero-day vulnerabilities in supply chain attacks With the increasing complexity of supply chains and the interconnectivity of various systems, zero-day vulnerabilities are expected to be a significant cybersecurity threat in the second half of 2023. A zero-day attack is a strategic exploitation that involves the use of previously unknown vulnerabilities in the supply chain and has no available patches or fixes. These vulnerabilities in the supply chain can have severe consequences, allowing attackers to compromise the integrity and security of products and services. They can lead to data breaches, unauthorised access, and the potential for sabotage or manipulation of systems. Aaron Hambleton is Director for Middle East & Africa at SecurityHQ You can read their full white paper, Global Threat Forecast: H2 2023 Predictions, at securityhq.com

From flexible workspaces to scheduling brainstorming sessions, Mark Fallon outlines five strategies to ignite innovation and inspire your hybrid team It can be challenging to spark creativity when working from home and even more difficult to encourage creativity among your team members. Here are five steps leaders can take to encourage remote creativity that supports organisational success.   1. Facilitate workspace flexibility A change in scenery is often a great way to recharge the creative batteries. This might include encouraging your team to move their office setup to a new room that has a great view or colourful paintings, or even a complete shift in location to a relative’s house or outside to a park bench. Whatever the choice, the change will be sure to enhance their creative process.   2. Find your creative hours Depending on their role or personal circumstances, members of your team may find the best time to be creative is first thing in the morning or last thing at night before going to sleep. It is important to adjust work hours accordingly to allow for this time, ensuring that the appropriate resources are available when team members are at their peak creativity (even if it is just a pen and notebook on the bedside locker!).   3. Schedule brainstorming sessions Ideas often develop and build in-depth as you discuss them with people either face-to-face or over a video call. Carve out time in your working week to run your thoughts by team members together in one place – either online or in the office together. Encourage healthy discussion and ask for their input and feedback – they may have a unique viewpoint you have not yet considered.   4. Use your commute time When you and your team commute to and from the office, you will often find yourself thinking through a project or solution to a problem. You might jot notes on your phone about a new idea or send an email to yourself to remind you of an important action or next step. If working from home and stuck in a creativity rut, ask your team to recreate this headspace by using the commute time to think by going for a walk or dedicating an hour of their day to deep thinking and creativity.   5. Take time off If team members have the time to take a day (or more) of annual leave, encourage it! Our best ideas often come to us when we least expect them. Taking some personal time to relax will let the mind freely wander and help the team feel rejuvenated and re-energised when returning to work – hopefully with a few new ideas. Whether you are looking to get into that creative mindset or inspire your team members to think outside the box, keep these tips in mind and implement them in everyone’s working day. Most importantly, lead by example – when you focus on creativity and innovation, the people around you will feel motivated to do the same. Mark Fallon is Director and Co-Founder at Coopman Search and Selection

Technical Roundup is now published on the first and third Friday of every month – the next edition will be issued on 15 September 2023.