Chartered Accountants Ireland to celebrate first annual dinner as largest professional body on the island of Ireland post- 2024 amalgamation  “Trump administration will be hitting the ground running, and as a small, open economy we must see the same impetus from our government” – Barry Doyle    Swift and effective implementation of the measures detailed in the Programme for Government will be critical as the new administration takes office this week.  Even with a five-year term, a greater sense of urgency must be evident if the new administration is to address the struggles of SMEs, the twin challenges of childcare cost and availability, and the positioning of Ireland for any global trade headwinds.  President of Chartered Accountants Ireland Barry Doyle made these points ahead of the Institute’s Annual Dinner on Friday evening, which will be attended by over 650 members, guests, and elected representatives. The Institute is now the largest professional body on the island of Ireland, representing over 39,000 members on the island of Ireland and in over 100 countries.  Commenting, Barry Doyle, President of Chartered Accountants Ireland said  “The Programme’s commitment to address the regulatory and cost burdens facing SMEs, in particular its pledge to establish a dedicated Small Business Unit in the Department of Enterprise is reassuring, but rapid delivery will be critical so that businesses can start to feel the effects of these measures in 2025.  “Similarly, it is our hope that the rigorous application of the “SME test” to all new legislation that increases business costs, prior to enactment is prioritised with immediate effect. My own professional life since qualifying has been largely within the SME sector, a sector that employs so many in Ireland, and such measures will allow these businesses to plan with confidence for the coming year.”  In a week where the Trump administration returned to office in the US, Barry Doyle also noted the potential for greater geopolitical uncertainty and intensifying global competition for inward investment. The recent launch of a new report by the Institute on FDI in Ireland noted that a slowdown in growth of the global economy coupled with accelerated industrial policy interventions by competitor countries means that Ireland’s inward investment model is now at a crucial inflection point.  Doyle continued   “The new Trump administration in the United States will be hitting the ground running and we must see the same impetus from our government in positioning Ireland to continue to thrive as a destination for investment and growth. Ireland cannot afford to be complacent about our offering, or our success to date. The significant deficits in the State’s crucial infrastructure, including housing, energy, water, childcare and nationwide public transport, need to be addressed with urgency if we are to remain fully competitive in the race for future FDI.  “Taking childcare as an example, as a parent of a two-and-a-half-year-old and a six-month-old, I am only too aware of the sheer pain of the current system. Cost, but in particular, capacity, especially for children under one, need urgent attention, and failing to prioritise this will hit individuals as well as Ireland Inc.”

In Irish news, the Programme for Government was released and we issue a reminder that the deadline for reporting under DAC 7 is due by Friday, 31 January 2025. In UK news, the latest Finance Bill continues to work its way through the parliamentary process and HMRC has launched a new disclosure facility for research and development (R&D) tax relief claims. In International news, the OECD has released the updated GloBE Information return. Ireland Read about the Programme for Government and how it aims to secure Ireland’s future.   Reporting under DAC7 and the Model Reporting Rules for Digital Platform Operators is due by Friday, 31 January 2025. Read about the obligations and information required to be reported by digital platform operators. UK    3. Read about the new disclosure facility launched last month by HMRC for non deliberate errors in R&D tax relief claims.      4. In our legislation update, we look at the progress of the latest Finance Bill through parliament. International     5. The OECD has released the updated GloBE Information Return (GIR) which incorporates clarifications on completing the GIR. 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. You can also read this week’s post EU exit corner here.  

The goAML system for making suspicious transaction reports (STRs) which the Irish Financial Intelligence Unit administers, is being upgraded. The upgrade is scheduled to go live the week of 10 February 2025. The FIU is carrying out internal training and there may be delays in processing STRs during this upgrade period. Firms registered on goAML will have received a communication from the FIU about the upgrade and in particular how to make urgent STRs during the upgrade period. Please click here to view further details from the FIU.   This information is provided as resources and information only and nothing in these pages purports to provide professional advice or definitive legal interpretation(s) or opinion(s) on the applicable legislation or legal or other matters referred to in the pages. If the reader is in doubt on any matter in this complex area further legal or other advice must be obtained. While every reasonable care has been taken by the Institute in the preparation of these pages, we do not guarantee the accuracy or veracity of any resource, guidance, information or opinion, or the appropriateness, suitability or applicability of any practice or procedure contained therein. The Institute is not responsible for any errors or omissions or for the results obtained from the use of the resources or information contained in these pages.

Revenue has updated the Tax and Duty Manual Review of Opinions or Confirmations to provide guidance to taxpayers on opinions or confirmations received from Revenue in the period 1 January 2019 to 31 December 2019. A taxpayer who wishes to continue to rely on these opinions or confirmations after 1 January 2025 is required to make an application to Revenue, on or before 31 March 2025, to renew or extend the opinion or confirmation. The Tax and Duty Manual also confirms that an application for a renewal will not be accepted by Revenue if subsequent Revenue guidance clarifies the matter dealt with in the original opinion or confirmation.

Revenue has updated the Tax and Duty Receivership Caseworking guidelines to include information on receiverships including the statutory requirements of receivers.

Revenue has updated the Tax and Duty Manual Living City Initiative which provides guidance on this scheme of property tax incentives. The updated guidance outlines that where an owner-occupier making a claim first occupies the property as their main or sole residence on or after 1 January 2023, relief is available for the first six years at a rate of 15 percent and a rate of 10 percent in the seventh year. Any relief unused can be carried forward for up to nine years after the year in which the claim is first made. The manual has also been updated as follows: Details on the interaction between funding available from local authorities to property owners and relief available under the living city initiative, and To reflect the revised De Minimis Regulation on the application of the Treaty on the Functioning of the European Union to de minimis aid. In any three-year period, an undertaking make not receive more than €300,000 in State Aid, from all sources subject to the de minimis regulations. A declaration on the de minimis aid is also required by a claimant when completing their tax return.

Reporting under DAC7 and the Model Reporting Rules for Digital Platform Operators is due by Friday, 31 January 2025. Details on the obligations and information required to be reported by digital platform operators is available on the Revenue website.

Last week, the draft Programme for Government was released setting out what can be expected once the programme is officially agreed later this week. Most readers’ attention will be drawn to the measures aimed at growing our economy and delivering on infrastructure. The document is ambitious in its scope with a commitment to create 300,000 extra jobs by 2030 as well as build over 300,000 homes by 2030 in line with the revised Housing Targets. There is also a commitment to rigorously implement the SME test when designing each new piece of legislation and regulation to determine the impact on SMEs. On taxation, the Government’s priorities are as follows: Broad Tax Base Maintenance: Ensure a wide-ranging tax base to mitigate the need for counter-cyclical fiscal policies during economic downturns and to address future budgetary challenges, particularly those related to an aging population. Progressive Taxation Adjustments: If economic conditions remain robust, implement progressive tax changes. This includes indexing credits and bands to prevent an increase in the real burden of income tax. International Tax Reform Engagement: Actively participate in the OECD's international tax reform initiatives. Our corporate tax policy must reflect the globalized nature of trade and industry. A tax system that supports innovation and entrepreneurship is crucial to maintaining Ireland's attractiveness for sustaining and growing existing businesses, as well as for starting and scaling new ventures. Energy Cost Containment: In response to rising energy costs for households and businesses, introduce tax measures to help manage these expenses, including adjustments to VAT. The document contains a commitment to delivering a clear and credible macroeconomic and fiscal framework which will meet future needs. As part of this a new Government Action Plan for Competitiveness and Productivity will be published within 12 months focusing on “industrial policy, reducing the cost and regulatory burden on business, investing in infrastructure, digital regulation and reform, energy reform, international trade and research and development, and innovation”.

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. HMRC has also asked us to highlight a current issue with the Customs Declarations Service (CDS) and its inability to accept certain characters.  CDS issue  The CDS is currently unable to accept special and diacritic characters. HMRC has asked us to share their guidance giving examples of these. This also explains what to do in certain circumstances such as where the user has an approved licence with such characters. HMRC is aiming to fix this issue in Spring 2025.  Miscellaneous guidance updates and publications  Simplified Process for Internal Market Movements (SPIMM) and UK Carrier (UKC) Scheme: Procedure Code to Additional Procedure Code correlation matrix,  SPIMM and UKC Scheme: terms and conditions,  SPIMM and UKC Scheme: Customs Simplified Procedures Guidance,  SPIMM and UKC Scheme: CDS Declaration and Customs Clearance Request Instructions,  SPIMM and UKC Scheme: Navigate the Customs Declaration Service Declaration Instructions,  SPIMM and UKC Scheme: Declaration Category Data Sets,  SPIMM and  UKC Scheme: Procedure Codes,  SPIMM and UKC Scheme: Additional Procedure Codes, and  SPIMM and UKC Scheme: Customs Declaration Service Data Element Completion Guide. 

In this week’s miscellaneous updates, the OECD has published updated Pillar Two guidance and employment expenses relief claims can be made online again for all qualifying employment expenses. HMRC has also published detailed guidelines for compliance (GFC) and a Revenue and Customs Brief on the VAT treatment of remedial works.  OECD publishes updated Pillar Two guidance  Last week, the OECD published the following documents:  Administrative guidance on article 9.1 of the GloBE model Rules, which clarifies the treatment of deferred tax assets arising from tax benefits provided by a government. However, the Inclusive Framework has agreed that, for a two year grace period, jurisdictions will not apply 9.1 to neutralise the deferred tax expenses arising from arrangements that were entered into before 18 November 2024, unless the deferred tax expense exceeds 20 percent of the relevant excluded deferred tax asset amount originally recorded,  Administrative guidance on articles 8.1.4 and 8.1.5 which clarifies how groups will be required to complete GloBE Information Returns (GIR) when there is a difference between domestic legislation and the GloBE model rules,  A list of jurisdictions whose legislation for the Income Inclusion Rule and Domestic Minimum Top-up Tax (DMTT) have been granted transitional qualified (and DMTT Safe Harbour) status by the Inclusive Framework, and  An update to the GIR, a XML schema user guide for tax administrations, and a Multilateral Competency Authority Agreement on the exchange of GloBE information.   All of the updated guidance is available on the OECD website at: Global Anti-Base Erosion Model Rules (Pillar Two).   Online claims for relief from all employment expenses restored  HMRC has recently fully restored the online option for an employee to make a claim online for tax relief for all types of employment expenses. This was restored for uniform, work clothing, and tool expenses from 31 October 2024. However, from 23 December 2024, an employee can make a claim and submit evidence for all qualifying employment expenses online using a new iForm. Note that agents cannot make claims online and can only do so by post.  From Monday 14 October 2024, claims for relief for employment expenses had only been possible by post using form P87 and were required to be backed up by supporting evidence.   More information and guidance is available in the following publications:  HMRC policy paper: Evidence required to claim PAYE (P87) employment expenses, and  HMRC guidance: Claim tax relief for your job expenses.  VAT treatment of remedial works  HMRC has published a GFC and a Revenue and Customs Brief on the VAT treatment of remedial works. The GFC includes illustrative examples to help stakeholders understand how these rules apply. See the following documents for more information:  Help with VAT treatment of remedial works — Guidelines for Compliance GfC11, and  Revenue and Customs Brief 3 (2024): VAT on cladding remediation work. 

A new R&D disclosure facility recently went live on GOV.UK and HMRC has set out its position following the First-tier Tribunal (FTT) decisions in Collins Construction Ltd v HMRC [2024] UKFTT 951 (TC) and Stage One Creative Services Ltd v HMRC [2024] UKFTT 1059 (TC).  New R&D disclosure facility  HMRC’s new R&D disclosure facility went live last month on 31 December 2024. This facility has been designed to make it easier for taxpayers or their agents, to disclose non-deliberate inaccuracies in R&D claims to HMRC.  This facility is for:   R&D tax reliefs claims which are out of time to amend via the company tax return; and   Taxpayers who have self-served R&D tax relief claim inaccuracies by mistake, despite taking reasonable care or carelessness.  Any deliberate inaccuracies disclosed will be re-directed to the contractual disclosure facility as tax fraud.   The facility itself is a form on GOV.UK. The accompanying GOV.UK page details the information required to complete the disclosure, which includes uploading computations, explanations and the submission of a letter of offer. The facility also enables taxpayers/agents to self-serve any tax, tax credit repayments, interest, and penalties due. Once received, HMRC will review the disclosure and if the offer is satisfactory a letter of acceptance will be issued. This facility does not require notification of the intention to make a disclosure.  FTT cases  In both these cases, the FTT found in favour of the appellant companies. HMRC has been considering the outcome of the cases and has decided that it will not be appealing the decisions.  HMRC has set out that it recognises clarity is needed on the impact of these cases on open enquiries, appeals, and other claims with subcontracted R&D and subsidised expenditure issues.   HMRC is now considering the wider impacts these FTT decisions have on such claims and aim to publish further guidance on this next month. HMRC is also contacting companies with existing enquiries this month to update them on next steps. 

Both Finance Bill 2024/25 and The National Insurance Contributions (Secondary Class 1 Contributions) Bill continue their passage through parliament.   Finance Bill 2024/25  Committee of the whole House for the Finance Bill took place last month on 10 and 11 December. The Bill is therefore currently at Committee stage with the next stage of its progress being scrutiny by the Public Bill Committee. This is expected to have concluded by 4 February 2025. In preparation for this, last month the Government published proposed amendments to the Bill and associated updated explanatory notes.   A meeting took place with HMRC on 18 November to discuss the changes to the taxation of non-UK domiciled individuals which are contained in the Bill. The Institute was in attendance at that meeting the minutes from which have been published on GOV.UK.  The National Insurance Contributions (Secondary Class 1 Contributions) Bill  This Bill implements the changes to employers National Insurance Contributions (NICs) from 6 April 2025 as announced in the Autumn 2024 Budget. It is now at Committee Stage in the House of Lords.   The Bill provides for the 1.2 percent increase in employers NICs from 13.8 percent to 15 percent and the reduction in the secondary threshold to £5,000. It also increases the annual employment allowance (which currently reduces the employer’s NIC liability of eligible employers by up to £5,000) to £10,500 and removes the qualifying requirement to have a total secondary Class 1 NICs liability of less than £100,000 in the prior year.