Last Tuesday 18 July was “Legislation Day” (or “L-day”) when the Government published draft legislation for inclusion in Finance Bill 2024. Also published were explanatory notes, tax information and impact notes, responses to consultations, several new consultations, and other supporting documents. L-Day came just days after the Spring Finance Bill 2023 received Royal Assent to become the Finance (No. 2) Act 2023, and the second Finance Act of 2023. Following the Spring Finance Bill 2023 receiving Royal Assent, the Government published a statutory instrument implementing the new UK transfer pricing (“TP”) documentation requirements. The Transfer Pricing Records Regulations 2023 mean that for the first time the UK has mandatory TP documentation requirements. HMRC have also published new guidance on this in its International Manual. Chartered Accountants Ireland is disappointed to see draft legislation published last week on L-day for the potential merger of the UK’s SME and large company R&D schemes from April 2024 which we were opposed to in our response to this consultation earlier in 2023. However, we are pleased to see that the Government plans to simplify how the high-income child benefit charge is collected which was a recent recommendation in a consultation response in June. Last week’s L-day announcements contained few surprises and largely built on previous policy announcements at both Spring Budget 2023 and April’s Tax and Administration Maintenance Day. The Government also made some announcements in a small number of technical tax policy areas and published some new consultations and summaries of responses to previous consultations. Changes to the UK’s Pillar Two rules also featured which we will cover in detail next week. The Government also intends to change the income tax rules for anyone who inherits a pension which will make them liable for income tax at their marginal rate from 6 April 2024. This announcement was made briefly in the guidance on abolishing the pensions lifetime allowance which was published on L-day last week. Other headlines from last week’s L-day announcements included:- Research and development tax reliefs – draft legislation to introduce a new permanent rate of relief for the most R&D intensive loss-making SMEs from 1 April 2023 and on the proposed design of a potential merged scheme combining the SME and RDEC schemes. Further, the restrictions on overseas R&D expenditure, delayed from April 2023, will be introduced for expenditure incurred on or after 1 April 2024. With a few exceptions, expenditure on overseas R&D will no longer be qualifying; Reform of audio-visual creative tax reliefs – draft legislation to implement the previously announced modernisation and reform of the existing audio-visual tax reliefs into expenditure credits. The reforms include a higher rate of relief for animation and children’s TV, which will also be extended to animated films; Administrative changes to the high-income child benefit charge – the Government wants to simplify the process for those who become liable to this, particularly for those who currently need to register for Self-Assessment (“SA”) to pay the charge. Details will be provided in due course on how this will enable employed taxpayers to pay this through their tax code, without the need to register for SA; and Data HMRC collects from taxpayers – the draft Finance Bill clauses have been published for technical consultation before introducing the changes in the Autumn Finance Bill. Subsequent amendments to regulations will be required to enact the changes and set out the detailed requirements. The changes will take effect from no earlier than 2025/26 and broadly the changes mean that HMRC will be given extra powers to collect information about the amount of dividend payments earned by owner managed business directors while employers will have to report the number of hours worked by individual employees. HMRC will continue working closely with businesses and other affected parties to progress these changes, ensuring clear requirements, guidance, and adequate time for implementation. If you have any comments or questions about the draft legislation, please email: responsivenessdataconsultation@hmrc.gov.uk In addition, the following consultations have been published: Mass Balance approach to account for chemically recycled plastic for Plastic Packaging Tax; Tax incentives for occupational health; Taxation of Employee Ownership Trusts and Employee Benefit Trusts; and Review of the VAT Terminal Markets Order legislation.

Revenue has advised that a request to offset VAT repayments against warehoused debt is now available in ROS. The Tax and Duty Manual which provides guidance on offsetting VAT repayments has been updated accordingly. 

The second 2022/23 self-assessment payment on account for income tax and Class 4 NIC (National Insurance Contributions) is due for payment on or before midnight Monday 31 July 2023. Each payment on account is half of the previous year’s tax bill. Information on time to pay arrangements and how to apply is available on GOV.UK. Anyone who is self-employed is required to make two payments on account every tax year unless:- their last Self-Assessment tax bill was less than £1,000; or they’ve already paid more than 80 percent of all the tax owed, for example through their tax code. If a taxpayer knows their tax bill is going to be lower than last year, a request can be made to HMRC to reduce payments on account.

Revenue has published preliminary statistics on 2023 Local Property Tax (LPT) as of 14 July 2023. The rate of payment compliance is 94 percent and the total amount collected to date in 2023 is €394 million. Approximately €5 million has been collected in respect of newly liable properties. Further information is available here.

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. We also remind you that the deadline for applying for the new UK Internal Market Scheme to ensure applications are processed in time is next Monday, 31 July. Miscellaneous updated guidance etc. The latest documents and publications relevant to EU exit are as follows:- Reference Document for The Customs (Northern Ireland) (EU Exit) Regulations 2020; Report payments and view your allowance for non-customs state aid and Customs Duty waiver claims; Check if you can claim a waiver for goods brought into Northern Ireland; Request Customs Declaration Service data on imports and exports; 4-digit to 3-digit procedure to additional procedure code correlation matrix for imports; Simplified procedures exclusion list of procedure and additional procedure codes for CDS; Appendix 2: DE 1/11: Additional Procedure Codes of the Customs Declaration Service (CDS); Reading notes for Declaration Category Data Sets: CDS Declaration and Customs Clearance Request Instructions; Additions and deductions for Data Element 4/9 of the Customs Declaration Service; Appendix 1: DE 1/10: Requested and Previous Procedure Codes of the Customs Declaration Service (CDS); CDS Declaration Completion Instructions for Imports; Appendix 21: Import Declaration Category Data Sets; Imports and Exports of the Customs Declaration Service (CDS); Data Element 2/3: Documents and Other Reference Codes (Union) of the Customs Declaration Service; Authorised Consignee Temporary Storage (ACTS) location codes for Data Element 5/23 of the Customs Declaration Service; Maritime ports and wharves location codes for Data Element 5/23 of the Customs Declaration Service; Notices made under the Customs (Export) (EU Exit) Regulations 2019; Bringing commercial goods into Great Britain in your baggage; and Notices made under the Customs (Import Duty) (EU Exit) Regulations 2018.

Revenue has published preliminary statistics to 20 July 2023 for the Temporary Business Energy Support Scheme (TBESS). With 29,893 businesses registered for the scheme, claims paid out amount to €107.22 million. Businesses are reminded that TBESS claims for the periods September 2022 to July 2023 must be submitted by 30 September 2023. Further information is available on revenue.ie.

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. Basis period reform – moving to the tax year basis: book now This webinar provides an introduction to basis period reform and looks at:- The tax year basis applicable from 2024/25 The transitional year to basis period reform of 2023/24; and Overlap relief. Agent services account access groups: book now This webinar looks at access groups within the agent services account including:- about access groups; clients lists and transacting with clients; adding team members; managing access groups; examples; and error messages, filters, and client references. An overview of the new alcohol duty structure and rates: book now From 1‌‌‌ August‌‌‌ 2023, alcohol duty will be charged in relation to the strength of the product as opposed to the product type. This webinar will explain the new alcohol structure and rates, including the reduced rates for draught products An overview of the new alcohol duty structure and small producer relief: book now This webinar will provide a background into the new small producer relief, including eligibility criteria, and how to calculate this. Capital allowances and vehicles: book now This webinar is part of HMRC’s annual Self-Assessment programme covering the rules for cars, qualifying expenditure, pools and rates, and vehicle hire purchase. A recording is also available to register to view of the webinar UK freeports – examples of tax and customs benefit.

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.

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.

The OECD will publish its annual review of Asia and the Pacific tomorrow. The publication, “Revenue Statistics in Asia and the Pacific”, presents key indicators tracking progress on the mobilisation of domestic resources and informing tax policies to bridge the financing gap for the Sustainable Development Goals to build sustainable public finances in the wake of the pandemic.

 Employee well-being is vital for business success. Moira Grassick explores the biggest people risks, from stress to diversity, and outlines how you can strengthen your organisation’s resilience A business is only as successful as its employees. People are both the most important asset a business has and, on the other hand, a source of risk if they’re not properly managed. After a stressful number of years in which health and well-being were primary concerns for everyone, the workplace has changed irreversibly, and it’s up to business owners to adapt to ensure their people stay happy and, in turn, deliver business growth. Some business risks are outside the control of Irish employers. Global geopolitical tensions and interest rates continue to impact the cost of doing business, but it’s different when it comes to your people. Employee risks are within your control. Here are some risks your organisation can minimise, ensuring happier and more productive employees. Stress and burnout After a challenging number of years, your employees may be suffering from anxiety, stress or burnout symptoms. These psychosocial issues can have a direct impact on productivity and potentially on the reputation of your business. Employees are more focused than ever on work-life balance and well-being. Taking steps to help employees achieve their goals in these areas helps reduce errors, minimise staff turnover and avoid dips in productivity. Remote Health & Safety  A remote worker’s home workstation is an extension of the workplace, and employers need to consider their Health & Safety obligations in this regard. The main responsibility for Health & Safety at work rests with the employer regardless of whether an employee works remotely or onsite. A risk assessment of the employee’s home workspace should be carried out. Work-related injuries (both physical and psychosocial), whether they happen onsite or in a remote location, could lead to penalties, brand damage and a deterioration in employee relations. Recruitment and retention Although the labour market shows signs of turning back in favour of employers, it’s crucial for business owners to figure out what will help staff build long-term careers with them. High staff turnover is bad for business, so engaging with employees and responding to their feedback on what could help them build a long-term future with you will pay dividends. Workplace culture Serious misconduct like bullying and harassment or theft and fraud can derail a business. It’s vital to manage these risks through the effective operation of appropriate policies and procedures. Staff should be aware of the values they are expected to uphold. Likewise, if employers don’t deal with grievances in the correct manner, they risk demoralising staff who won’t want to work within an uncaring culture. Preventing grievances in the first place should be the aim, but failing to manage employee grievances properly will distract your management team from their main tasks, demotivate staff who think colleagues have not received fair treatment and ultimately hurt your business. Diversity, equity and inclusion As the Irish population continues to diversify, it’s important to develop an inclusive and diverse working environment. Failing to address this area will limit your access to the broadest possible talent pool and potentially have reputational consequences that hurt relationships with employees, customers and other stakeholders. Legal and compliance As well as the challenge of managing the transition away from pandemic-related work practices, employers also have a wide range of new employment laws to consider. The statutory sick pay scheme came into force in January and affects all employers. The transparent and predictable working conditions regulations impact probation periods, employment contracts and documentation. Most recently, employers will need to act upon various new work-life balance rights, including the right to request remote work. It’s a major challenge for employers and employment law practitioners to keep pace with the volume of recent employment regulations. The cost of ineffective management The costs associated with these risks are multiple. Management spends too much time firefighting, employees take their talents elsewhere, and the bottom line suffers. With the right approach, however, business owners can turn all these risks into strengths that will make their business more resilient to setbacks and more productive when trade is brisk. Moira Grassick is Chief Operating Officer at Peninsula Ireland

In the modern business landscape, fostering a culture of accountability is paramount for organisational success and ethical behaviour. Yvonne Kelleher and Conor McCarthy discuss the crucial connection between culture and accountability Culture and accountability are not new concepts. However, for many organisations, driving a culture of accountability seems like an intangible feat, with many organisations leaping to enhance the operating model without recognising the need to manage the human factors. This can be a costly oversight, and without considering a unified approach and mindset to drive accountability, the desired benefit and return will not be realised. Executives must set a leading example in this time of increased public and regulatory scrutiny and change in Ireland and globally. They need to exhibit accountability and maintain trust with both stakeholders and employees. Culture and accountability are not static ideas, nor do they impact one industry. In fact, in Ireland, we have seen over the last 12 months a lack of accountability underpinned by poor behavioural drivers across a range of industries such as financial services, public bodies and broadcasting has resulted in computational damage and a loss of stakeholder and employee trust. Time is of the essence for organisations to conduct a stocktake, reassess their culture journey and address any gaps to promote and embed an effective and resilient culture to drive and enforce accountability. Organisations should look at this as not only a necessity but also an opportunity that will support their success in the long run.  Organisational accountability – what is it? Organisational accountability occurs when all employees behave in a way that promotes the successful and timely completion of their responsibilities. It involves the organisation being answerable for its actions, decisions and impact on stakeholders, including employees, customers, shareholders, communities and, of course, the environment. A poor culture of accountability can present itself in several ways. Lack of transparency There is often a lack of transparency in decision-making processes, communication and reporting. Information may also be withheld, buried, distorted or not shared openly with stakeholders.  Lack of clarity in roles and responsibilities When there is a lack of clarity regarding roles, responsibilities and expectations, it becomes challenging to establish accountability. Unclear lines of authority, ambiguous decision-making processes, and overlapping responsibilities can contribute to a culture where no one feels truly responsible or accountable for outcomes. Lack of leadership Leadership plays a crucial role in shaping the culture of an organisation. In a poor culture of accountability, leaders may fail to model and uphold the principles of accountability. Leaders evading responsibility or engaging in unethical behaviour without facing the consequences sets a negative example for others.  Lack of trust There may be an environment of distrust and scepticism. This can lead to a lack of collaboration, communication and willingness to report issues and mistakes.  Low consequences for misconduct In organisations with a poor culture of accountability, there may be a lack of appropriate consequences for unethical behaviour or poor performance. This can lead individuals to believe they can engage in misconduct without facing significant repercussions.  Fear of retaliation Conversely, a poor culture of accountability may foster an environment where individuals fear retaliation for speaking up, reporting wrongdoing or challenging the status quo. This fear can deter individuals from holding themselves or others accountable, leading to a lack of transparency and the perpetuation of negative behaviours. It is crucial, therefore, to get a balance between consequences and a fear of retaliation.  Low morale A lack of organisational accountability can diminish an employee’s sense of purpose. This results in a lack of motivation to do your job and impacts the quality of employees’ work.  The link between culture and accountability Today, an organisation’s success is no longer just about the bottom line; qualitative inputs like transparency, trust and employee performance, productivity, collaboration and engagement also determine success. Therefore, an organisation’s cultural norms, values and practices can significantly influence the expected, accepted and enforced accountability level to ensure sustainable change. 1. Trust and transparency   Culture affects the level of trust and transparency within an organisation. In cultures where trust is high, and transparency is valued, accountability tends to be emphasised more. Employees tend to hold themselves accountable for their actions as they believe in the importance of integrity and honesty.  2. Consequences and enforcement Cultural attitudes towards consequences and enforcement also play a role in accountability. In some cultures, the fear of reputation, trial by the media or social stigma may serve as a powerful deterrent leading individuals to be more accountable for their actions. In other cultures, legal frameworks and regulatory systems play a key role in enforcing accountability (like the new individual accountability regime currently being implemented by the Central Bank in regulated institutions within Ireland).  Cultural influences Cultural influences on accountability can vary significantly across different societies and organisations, particularly as the operating and workforce landscape evolves. While some cultures may prioritise individual accountability, others may emphasise collective responsibility more. Understanding and addressing these cultural dynamics, including behavioural drivers, are essential for promoting a sustainable culture of accountability and ethical behaviour. Yvonne Kelleher is Managing Director in Risk Consulting at KPMG Conor McCarthy is Partner, Head of People and Change at KPMG