In this week’s EU exit bulletin, we bring you the latest guidance updates and publications relevant to EU exit and we update you on recent developments in relation to the Retained EU Law Bill. The latest Trader Support Service and Borders Weekly Stakeholder Bulletins from 2 June and 9 June are available and we provide a further update on the Windsor Framework. It is also confirmed that the long awaited duty reimbursement scheme will open for claims from the end of this month. Retained EU Law Bill At the end of May, the House of Commons considered the House of Lords amendments to the Retained EU Law Bill (Official Report part 1, and Official Report part 2). Parliament returned from a short recess on 5 June which was followed by Kemi Badenoch, the Minister responsible for the Retained EU Law Bill, appearing before the European Scrutiny Committee on 6 June. The House of Lords is  due to consider the House of Commons amendments to the Bill next Tuesday 20 June and the European Scrutiny Committee has published its report on the Windsor Framework. Miscellaneous updated guidance etc. The latest guidance updates, and publications relevant to EU exit are as follows:- Check simplified procedure value rates for fresh fruit and vegetables; CDS Declaration Completion Instructions for Imports; Tell HMRC if you still need your EORI number starting XI; Search the register of customs agents and fast parcel operators; Appendix 2: DE 1/11: Additional Procedure Codes of the Customs Declaration Service (CDS); Search the register of customs agents and fast parcel operators; Check simplified procedure value rates for fresh fruit and vegetables; Search the register of customs agents and fast parcel operators; and Reference Documents for The Customs Tariff (Preferential Trade Arrangements) (EU Exit) Regulations 2020.

In Irish news, the Institute attended the National Economic Dialogue 2023 this week, and Revenue has published a new manual on the Non-Resident Withholding Tax. In UK news, read some more key messages from a recent meeting on the Windsor Framework and HMRC is temporarily closing its self-assessment helpline from 12 June until 4 September 2023. In International news, we bring you an update on the new DAC8 rules on crypto-assets.  Ireland The Institute was represented at the National Economic Dialogue 2023 forum hosted by both the Department of Finance and Department of Public Expenditure and Reform. Revenue has published a new manual on the Non-Resident Withholding Tax system. UK Read part two of our key messages on the Windsor Framework. HMRC has closed its self-assessment helpline for almost three months. International Update on the new DAC8 rules on transparency for crypto-assets. Keep up to date with all the latest Irish, UK, and international tax developments through Chartered Accountants Ireland’s Tax Newsletter. Subscribe to the Tax News by updating your preferences in MyAccount.

On 13 June, the Ulster Society hosted the latest in a series of legal webinars with A&L Goodbody's Sam Corbett and Chris Coulter focussing Winding Up Petitions. The return of winding up petitions in Northern Ireland after being restrained for the last three years is expected to have an impact on local corporates, and those who advise them. This webinar covers: • Market Context. • Potential catalysts in the market. • Likely impacted industries. • Insolvency Stats – England -v- NI • Lessons from England – (English restrictions were lifted a year before NI). • How to deal with Winding up Petitions and the impact they can have – practical hints and tips A recording of this webinar is available to view, for free and on demand, HERE A pdf copy of the slides from this presentation is available HERE

Introduction: Artificial intelligence (AI) has emerged as a transformative technology across various industries, and the field of accounting is no exception. Small to medium-sized accounting firms are beginning to recognise the potential of AI in streamlining their operations, enhancing efficiency, and improving client services.  This article delves into the ways in which AI is poised to revolutionise the landscape for these firms. Automating Mundane Tasks: One of the significant advantages of AI for small to medium accounting firms is its ability to automate mundane and repetitive tasks.  AI-powered software can efficiently handle tasks such as data entry, reconciliations, and invoice processing, which previously required considerable time and effort from accountants.  By automating these tasks, accountants can focus on more strategic and value-added activities, such as financial analysis and advisory services. Enhanced Data Accuracy and Compliance: Accuracy is paramount in accounting, and AI can significantly contribute to ensuring error-free operations.  AI algorithms can analyse large volumes of financial data quickly and accurately, minimising the risk of human error.  This leads to more reliable financial reporting, improved compliance with regulations, and reduced auditing costs for small to medium accounting firms. Improved Decision-Making: AI-powered analytics can provide accountants with valuable insights by identifying patterns and trends in financial data.  This enables them to make data-driven decisions and offer strategic advice to clients.  AI algorithms can also assist in forecasting future financial outcomes, helping small to medium firms better plan and optimise their financial strategies. Enhanced Client Experience: AI-driven chatbots and virtual assistants can revolutionize client interactions for small to medium accounting firms.  These AI-powered tools can handle routine client queries, provide real-time support, and even offer personalised financial advice.  By automating customer service, accountants can focus on building stronger client relationships and providing more specialized services. The Human Touch What are your thoughts on this article so far?  Everything up to now was written by Chat GPT! I asked it to write a 300 word article on the impact of AI on small and medium accounting firms and this is what it wrote in less than a minute.  I removed the machine’s conclusion because I will take up the story now. The article so far may be a bit generic, but it is accurate, readable, and if follows a logical sequence.  This development should give us all pause for thought.  Clearly this has to potential to effect profound changes to how we do our work, but we are all still trying to peer into the future and guess exactly how this will happen.  One can ask is this the future, where does the human element fit into the ever-evolving developments of AI.  Here are some further (human generated!) reflections on how AI will impact small to medium sized accountancy firms over the next number of years.  Chat GPT is the latest buzz word in the media over the last few months.  However, it could be described as just a tree in the huge AI forest.  AI has been around for several years; many of us remember when “Deep Blue” (IBM’s supercomputer) beat the world chess champion Garry Kasparov way back in 1996.  However in more recent times, AI has been quietly changing the way that we do bookkeeping tasks, making suggestions for where to post and how to code invoices and payments, and automatically reconciling bank accounts.  Most accountants will agree that AI will contribute to savings, reduce errors and aid compliance.  This is turn will free up accountants, resulting in accountants getting to spend more time assisting clients to run their business rather than focusing on data entry and repetitive tasks. Of course, there are risks and downsides.  Firstly the use of generic AI packages may compromise client data.  For example you should never input confidential or personal data to Chat GPT, which is not a secure platform.  And of course, AI can get it wrong.  Occasionally it will generate answers that appear logical, and may even be backed up by references which are spurious; this is known as hallucinating and it can be difficult to spot. The opportunities for training of junior staff may be reduced as AI can readily take over simpler tasks. There are also ethical risks.  AI may enable people to pretend to have knowledge and insights that they do not have.  This can result in poor advice given to clients, and in extreme cases it facilitates fraud.  Many firms are already investing in AI and there is a premium in being able to respond quickly to technological changes and to grasp opportunities.  Consider how you will find the right of mix of AI products and capabilities, and choose what you want to build, buy or partner.  This is coming at a time when the recruitment market for accountants and book-keepers is getting continuously tighter. Is AI the solution, or part of the solution, to the never-ending staff crisis? Time will tell. Here are some areas where we think we may see practical changes.  Firstly the tasks of writing reports, letters, summarising reports, and creating presentations are greatly facilitated.  Like the first part of the article above, Chat GPT or similar applications will create a first draft of these almost instantaneously.  Where you are struggling for words, try asking it to “write this more professionally for me”, and enter your own text to see what it suggests.  These capabilities are available now, and for free.  However, remember the previous warning about not entering confidential information to ChatGPT. We understand that Microsoft is currently rolling out an AI add-in called Co-Pilot which they say will ultimately be available to all Microsoft 365 users.  The premise is that you will be able to, say, ask Co-Pilot how you should prepare for your upcoming meeting and it will create an agenda and content for you based on your current activity.  And of course Co-Pilot should know how to use all the features in all the Microsoft apps that you never use!  No doubt, Microsoft’s competitors will produce rival solutions.  There are a number of plug ins available for standard spreadsheet programs that will analyse data and write natural language reports on your data.  The idea is that you can ask the program, for example, to analyse results for the past three years, identify key trends and draft a graph to illustrate this. Tax compliance is another area where the technology seems to be progressing quickly.  Current developments point to software that will review your tax client portfolio and suggest where you may have overlooked available tax reliefs and credits and draft the relevant correspondence to Revenue.  We await the outcome of these developments here with interest. Audit is another area where the opportunities to carry out large scale reviews of data and generate documentation should transform processes over time. Of course, the difficulty with trying to anticipate future technological changes is that it is not clear what problems are readily solvable until after they are solved.  Like the self-driving functions on high end cars, the advice is to use the technology to help you, but keep your hands on the steering wheel for now!  Always proceed with caution, and do a common-sense check on anything that you produce using AI.  In the meantime, stay alert for the opportunities that these technologies can create for you practice. The human part of the above article was written by Maria Moloney FCA, who has joined Practice Consulting as a consultant.

On 29 May, we updated you on key messages from a recent meeting with the Northern Ireland Joint Customs Consultative Committee on the Windsor Framework (“WF”). Today we provide more details on the matters discussed including NI-GB unfettered access, more on both the UK Internal Market Scheme and the Reimbursement Scheme, news about the treatment of mixed loads, and an update on XI EORI numbers. HMRC has since updated a number of publications which are referenced below. Unfettered NI-GB access Officials confirmed that there will be no changes to goods movements from NI-GB, hence unfettered access will continue to be available and protected with, as it is currently, no export requirements needed other than for exceptional goods such as endangered species, hazardous chemicals, etc. UK Internal Market Scheme (“UK IMS”) It is confirmed that the new UK IMS, which will replace the UK Trusted Trader Scheme (“UK TTS”) from 1 October 2023, will include a higher commercial processing threshold and broader sectoral exemptions. As the scope of UK IMS is wider than the current UK TTS, there will be some additional authorisation requirements. In addition to company directors, HMRC will check whether senior employees responsible for the movement of goods under the scheme have any serious criminal offences recorded in relation to economic crime. There will also be more detailed questions on record keeping and internal controls. HMRC will also undertake checks to ensure that traders are “of good financial standing.” HMRC will also provide new guidance on obligations when moving goods under the scheme with traders required to sign a declaration to confirm they have read and understood the guidance, and that they understand their obligations under the scheme. Traders currently holding authorisation under the UK TSS will be contacted by HMRC in order for re-authorisation to commence for the UK IMS and will need to login using their Government Gateway to complete enrolment onto the UK IMS. This should be done within six weeks of receiving contact from HMRC about re-authorisation, to ensure UK IMS enrolment before 30 September 2023. The new UK IMS is now open to apply for authorisation.  The reimbursement scheme The reimbursement scheme will allow for reimbursement of tariffs paid on goods classed as being at risk which later become/became not at risk under the original Protocol and on goods which move in the new red lane which should originally have been green lane movements under the WF. This includes the following scenarios:- Final sale of goods takes place in NI; Goods are consumed in NI; Goods are destroyed in NI; Goods are moved back to GB from NI; and Goods exported to RoW (Rest of World). In order to claim, the trader must gather evidence to support the claim and submit this to HMRC where a caseworker will consider the application. Mixed loads It was confirmed that mixed loads (green and red lane movements in the same container) will be possible under the WF, however red lane goods within mixed loads will be subject to full customs and SPS checks, hence this will slow down such movements. Miscellaneous A number of questions were taken away for more detailed consideration including the treatment of different goods movements such as EU/Ireland-NI-GB, NI-Ireland-GB and GB-NI-EU/Ireland. We will share the responses to all queries when available. A query was also raised in respect of how goods movements under the WF interact with the proposed Border Trade Operating Model. Post and parcel movements (C2C, B2C, B2B) are to be covered in a separate meeting but will not switch on until 1 October 2024 and new quotas are in place for categories 7 and 17 of UK steel. XI EORI number HMRC has recently written to businesses with a GB registered business address who hold an XI EORI number to confirm if they have a permanent business establishment (“PBE”) in NI or if they still need their XI EORI number for the limited customs purposes for which this is provided. Businesses meeting the criteria to retain their XI EORI number for the limited list of other customs purposes do not have to be established in NI. This validation exercise letter invites traders to upload evidence of a PBE in NI or to select on the G-form that they meet the criteria to retain their XI EORI number. Updated guidance and publications HMRC has also published and updated a number of guidance documents as follows:- The Windsor Framework - further detail and publications; How to make sure the correct duty is applied to goods you bring into Northern Ireland from countries outside of the EU and UK; Sign up for the Trader Support Service; Declare goods using the UK Trader Scheme if you bring goods into Northern Ireland; Check if you can bring your goods into Northern Ireland from Great Britain without paying duty; and Declaring goods you bring into Northern Ireland 'not at risk’ of moving to the EU.  

From today, Monday 12 June, until 4 September 2023, HMRC is closing its self-assessment helpline. This decision was notified to Chartered Accountants Ireland in a meeting just one day before the official announcement last week and was not consulted on in advance. The decision was embargoed until the official announcement on Thursday 8 June. We would be keen to hear your feedback on the impact of this decision. Note that this does not affect self-assessment queries on the Agent Dedicated Line which we understand was restored to full status again from 2 June. This week’s News and Information from HMRC also covers the closure of the helpline. The decision to close the helpline is clearly as a result of ongoing pressures on HMRC’s services due to resource constraints and limited and falling real time budgets. The Institute is highlighting the continued impact this is having on agents and taxpayers and makes several recommendations to the UK Government in the 2023 Next Financial Year position paper which will be published later this week. In the meeting during which HMRC notified the Professional Bodies of this closure, a number of questions were asked the answers to which are reproduced below. “If someone needs to withdraw a return how can they do this with no phone line? Almost any task that can be actioned or query that can be resolved on the phone, can also be sorted via webchat. This includes withdrawing a Self-Assessment (“SA”) return.  We advise customers to use our ‘Ask HMRC online’ digital assistant. If your query can’t be dealt with this way, you will be put through to our webchat service. If you need to file then how can you do this? You can file online – just like the 97% of SA customers who already use HMRC’s online services to file. Almost every query that can be resolved on the phone, can also be done via webchat. Anyone who needs extra support if their health condition or personal circumstances make it difficult for them to contact HMRC, can get support from our Extra Support team.  Otherwise, the helpline will re-open on 4 September this year so customers can receive expert support in the five months running up to the SA deadline on 31 January 2024. What if someone actually needs to speak to us? Any customers with an urgent SA query will be able to get support through our digital assistant, and where appropriate they may be routed to our SA webchat facility or a technical expert, for example, if the customer is in financial distress.  If customers are digitally excluded or qualify for extra support, we’ll ask our colleagues who respond to webchat, to refer them to our Extra Support Team following their usual processes.  What is the plan B if customers can’t speak to HMRC? Almost any task that can be actioned or query that can be resolved on the phone, can also be sorted via webchat. We advise customers to use our ‘Ask HMRC online’ digital assistant. If your query can’t be dealt with this way, you will be put through to our webchat service. We recognise that some agents may have to deal with more contact from their clients as a result of this change. However, we encourage agents to let their clients know that anyone with complex queries that they need additional help resolving, should use our ‘Ask HMRC online’ digital assistant. If their query can’t be dealt with this way, they will be put through to our webchat service. Almost any task that can be actioned or query that can be resolved on the phone, can also be sorted via webchat. How are the digitally excluded going to be supported? How do they access the Extra Support Team if not through the SA helpline? Anyone who needs extra support if their health condition or personal circumstances make it difficult for them to contact HMRC, can get support from our Extra Support team.  If customers need extra support, they can get a phone or video appointment with the extra support team. Ask your advisor when you call any HMRC helpline or use the extra support team webchat service. Are there plans to close the ADL line? The Agent Dedicated Line (ADL) is unaffected by this change, so agents can still call us during this period. The ADL opening hours are Monday to Friday: 8am to 6pm. There are no current plans to make any further changes to the opening times. Will we stop putting out comms about filing early if there is no support available? Our Early Filing campaign will begin on 4 September when the phoneline reopens. However, we will continue to encourage customers to file early and online. If customers have any complex queries that they need additional help resolving, we would recommend they use our ‘Ask HMRC online’ digital assistant. If their query can’t be dealt with this way, they will be put through to our webchat service. Almost any task that can be actioned or query that can be resolved on the phone, can also be sorted via webchat.”

From 1 May 2023, the new VAT related payment scheme for certain second-hand cars came into operation. HMRC has recently updated guidance for the scheme which now provides guidance for EU businesses on how to claim a payment if they do not have a business establishment in the UK. EU businesses can make their claim directly to HMRC from 1 August. They can prepare to make their first claim by:- appointing someone to deal with a claim on their behalf; or requesting access to the HMRC Secure Data Exchange Service to submit a claim electronically. The guidance pages relevant to this are as follows:- How to claim a VAT-related payment using the second-hand motor vehicle payment scheme if you do not have a business establishment in the UK; Submit a claim using the second-hand motor vehicle payment scheme if you do not have a UK business establishment; and Appoint someone to deal with VAT-related payments using the second-hand motor vehicle payment scheme. Other guidance pages relevant to the scheme are:- Check which records to keep for second-hand vehicles you export to the EU for resale; Sales of second-hand motor vehicles in Northern Ireland; Claim a VAT-related payment if you buy second-hand motor vehicles in Great Britain and export them to the EU for resale; Check which records to keep for second-hand vehicles you move to Northern Ireland for resale; and Claim a VAT-related payment if you buy second-hand motor vehicles in Great Britain and move them to Northern Ireland for resale.

The Institute recently responded to the consultations Expanding the cash basis and Simplifying and modernising HMRC’s income tax services. Both submission responses are available to read in the Tax Representation section of our website. Key points from each are set out below. The Department of Finance has also published a factual summary report of responses to the “Consultation on devolution of more fiscal powers” launched late in 2022 by the then Finance Minister. Chartered Accountants Ireland’s response to that consultation is available to read on our website. The report will help inform any incoming Finance Minister’s considerations regarding further fiscal devolution, and it would then be for a future Executive to consider any potential recommendations. Expanding the cash basis The following key points and recommendations are made in the Institute’s response to this consultation:- The cash basis should remain as opt-in only. The turnover limit should be aligned with the thresholds used for the VAT cash accounting scheme, which should also be uprated. The rules for vehicles in the cash basis should be reformed and simplified. A review of the simplified expenses regime should be undertaken, and their rates uprated. A number of recommendations are made to improve the self-assessment form in order to both raise awareness of the cash basis and minimise the impact of businesses moving between the cash basis and the accruals basis. The exclusion for business premises renovation allowance and claims for research and development allowance should be removed. A number of the current restrictions should be removed including the restriction on sideways loss relief and relief for interest costs. The cap on certain income tax reliefs needs to be uprated. The additional income tax and Class 4 NIC as a result of the transitional adjustments should be spread over a number of tax years via an election. A number of recommendations are made to lessen tax complexity. The Office of Tax Simplification’s (“OTS”) recommendations on tax education tools/learning should be included in the Tax Administration Strategy and HMRC should explore the potential to provide basic tax information or training to young people on entering the workforce. Simplifying and modernising HMRC’s income tax services Key points and recommendations are as follows:- HMRC should seek additional investment for the final two tax years of the current spending review period to ensure that current service levels do not further deteriorate and to support the introduction of new digital services. HMRC should focus on its current objectives for simplifying income tax services before considering more radical reform. A number of recommendations are also made to lessen tax complexity. Taxpayers should be able to opt out of the “digital by default” approach. HMRC’s current transformation project should include the development of a secure email communication channel for taxpayers and agents.   HMRC must develop, implement, and maintain online services and contact routes specifically for agents. A facility for agents to access their clients’ data should be included in the development of new online services. Agent services for taxpayer registration should also be developed in tandem with the development of any online taxpayer registration system. HMRC should examine the root cause of the ongoing high levels of amendments needed to PAYE codes and a review should be conducted of how RTI data could be used more effectively by HMRC. The March 2022 recommends of the OTS in its “Evaluation paper on improvements to the operation of the PAYE system” should also be considered by HMRC. Tax refunds for employees should not be processed into their employer’s payroll bank account and HMRC should consider how a similar system for PAYE could be implemented in the UK like the system currently available to taxpayers in Ireland. A roadmap should be published setting out how the digitally excluded will be catered for. Any new services must contain the necessary safeguards to protecting sensitive taxpayer data. A number of suggestions are made to improve the current ITSA criteria and codifying in legislation should be avoided. HMRC should consider how tax guidance principles can be developed outside Government Digital Service constraints and the recommendations made by the Low Income Tax Reform Group in its report on guidance should also be reviewed and considered for implementation. HMRC will need to embark on an education and communication campaign to communicate any new online services to taxpayers and agents. Several recommendations are also made to improve taxpayer education and awareness of the UK tax system. A full roadmap for the future delivery of the Tax Administration Strategy needs to be published.

HMRC has recently updated its Check when you can expect a reply from HMRC tool. This can now be used to check when you should receive a reply to certain types of requests about PAYE for employers, national insurance contributions issues, including registering a PAYE scheme and claiming a Construction Industry scheme refund. HMRC advises that the Where’s my reply tool and/or the HMRC service dashboard should be consulted for the expected response date before any progress chasing calls are made.

In this week’s EU exit corner, we bring you the latest guidance updates and publications relevant to EU exit and we update you on recent developments in relation to the Retained EU Law Bill. The latest Trader Support Service and Borders Weekly Stakeholder Bulletins from 2 June and 9 June are available and see part 2 of our story on the Windsor Framework. Retained EU Law Bill At the end of May, the House of Commons considered the House of Lords amendments to the Retained EU Law Bill (Official Report part 1, and Official Report part 2). Parliament returned from a short recess on 5 June which was followed by Kemi Badenoch, the Minister responsible for the Retained EU Law Bill, appearing before the European Scrutiny Committee on 6 June. The House of Lords is to consider the House of Commons amendments to the Bill and the European Scrutiny Committee has published its report on the Windsor Framework. Miscellaneous updated guidance etc. The latest guidance updates, and publications relevant to EU exit are as follows:- Check simplified procedure value rates for fresh fruit and vegetables; CDS Declaration Completion Instructions for Imports; Tell HMRC if you still need your EORI number starting XI; Search the register of customs agents and fast parcel operators; Appendix 2: DE 1/11: Additional Procedure Codes of the Customs Declaration Service (CDS); Search the register of customs agents and fast parcel operators; Check simplified procedure value rates for fresh fruit and vegetables; Search the register of customs agents and fast parcel operators; and Reference Documents for The Customs Tariff (Preferential Trade Arrangements) (EU Exit) Regulations 2020.

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. The Agent Forum – working with the agent community: book now This live webinar aims to raise awareness of the Agent Forum (“AF”) and will look at:- the benefits of using the AF; proper use of the AF, including what HMRC expects from agents and what to expect from HMRC; good practice; and useful hints and tips. 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. Two new services have recently been added to this. The status of the income tax self-assessment payment plan page can now be checked as can the employers PAYE payment plan page.