New technologies will play an essential role in supporting finance functions to become value-adding business partners for organisations, writes Vickie Wall The application of technology to automate routine and low-value tasks has been a priority for CFOs for quite some time. Many finance leaders looking beyond automation are considering the implementation of autonomous systems that can carry out tasks but make or at least suggest decisions without the necessity for human intervention. However, among the more surprising findings of the EY Ireland CFO Survey 2024, 47 percent of respondents cited manual processes and controls as an area where time is used least efficiently in the finance function. This suggests that a sizeable number of Irish organisations still have some way to go in their automation efforts and that autonomous finance is probably not even on the horizon for them. No organisation, however, wilfully persists with inefficient and costly systems that are readily amenable to automation. The reality is that organisations face numerous obstacles when it comes to automation processes, not least of them skills deficits and costs. Eye on saving time and cost The Irish business landscape is extremely varied, ranging from Irish PLCs overseeing vast global operations and subsidiaries of global multinationals that are carrying out a range of finance and business services in Global Business Service centres, to both large and mid-sized private organisations with often relatively small finance teams and scarce technology resources. It is, therefore, quite probable that organisations at the smaller end of that spectrum will be those with the most significant automation challenges. Interestingly, recent advances in technology mean that autonomous finance may offer a means of leapfrogging obstacles. Autonomous finance systems use advanced technologies such as machine learning, artificial intelligence (AI) and big data analytics to continuously learn, adapt, predict, and have the capability to operate on their own. Up until quite recently, those technologies have been prohibitively expensive for most organisations and the skills to use them effectively have been rare and in high demand. The advent of generative AI (GenAI) and the near-simultaneous retrenchment in the tech sector has brought both the technology and the ability to use it within reach of just about all organisations, regardless of size. Very importantly, low-cost and no-cost GenAI tools can help to fill skills gaps in finance functions and accelerate automation efforts or restart stalled projects. Their natural language capabilities allow them to write the code for programmes and tools to carry out tasks and execute processes based on simple instructions from a human with little or no technology expertise. This can be applied immediately to time-consuming, recurring processes like month- and year-end close. In most cases, these are highly manual processes that deal with huge numbers of journal postings and have a high potential for human error. Automating them will both save time and effort and reduce costly errors. Seven-step roadmap to adoption Finance automation is no longer an option; it is a necessity. That will also be the case for autonomous finance in the not-too-distant future. The pressure on finance functions will simply be too great to sustain without the support of automated and autonomous processes. The only remaining question is how to progress the adoption and implementation journey. There are seven steps to successfully embrace automated and autonomous finance. Understand the current process Identify those tasks and processes that take the most time for the least reward, document them and establish if they make good automation use cases. Set clear goals Decide what you hope to achieve from automation; reduced manual errors, faster processes, reduced costs, improved reporting or better resource allocation. Choose the right tools Evaluate different finance automation tools available in the market. Some off-the-shelf tools from established providers offer clear benefits. Avail of free trials where possible to assess the claims made by the provider. Work with the IT function to ensure activities and strategies align with one another. Use intelligent bots The concept of AI as an assistant to augment human capability should be embraced. Rather than focusing solely on areas where human activity can be replaced by machines, the exploration of the use of technology to assist humans in their work should be given at least equal priority. Start small It is best to automate small parts of the accounting cycle at the beginning to build confidence in the new tools and solutions. This will help gain buy-in from within the finance function as well as the C-suite level to generate savings to fund future projects. Encourage innovation If finance teams are encouraged to dabble in the technology and experiment with automation in small projects, it could help build confidence and accelerate adoption. Allowing individuals to experiment can uncover new use cases and unlock additional value. Train the team While GenAI-powered tools will make up for many existing skills gaps, finance teams will still need to be trained on how to use the new tools to optimise their value. This will support the change management process required for the adoption of any new technology. Accelerate the journey Finance functions need to accelerate their automation journeys in the face of a rapidly increasing burden brought about by a combination of new regulations and increased demands from the business. GenAI and other new technologies have the power to support automation as well as assist in the adoption of high-value-adding autonomous finance processes. Vickie Wall is Financial Accounting Advisory Services Leader at EY

The EU’s Nature Restoration Law mandates the restoration of 20 percent of land and sea by 2030. Irish businesses must assess their reliance on nature for resilience, writes David McGee The formal adoption of the European Union (EU) Nature Restoration Law (NRL) by the EU Council in June 2024 marks another victory for nature. Importantly, it urges Irish businesses to understand their reliance on and impact on nature and biodiversity. Understanding what legislation like this could mean for long-term business resilience is essential. What is the importance of the Nature Restoration Law? The NRL is the first continent-wide, comprehensive law of its kind. Under the NRL, EU countries must implement measures to restore at least 20 percent of the EU’s land and sea areas by 2030 and all ecosystems in need of restoration by 2050. It sets specific legally binding targets and obligations for nature restoration across various ecosystems – from terrestrial to marine, freshwater and urban environments. Member states must submit national restoration plans to the European Commission by 2026, detailing how they will achieve these targets and how they will monitor and report on their progress. New business opportunities for ecosystem resilience Businesses often struggle to connect their operations directly with nature and biodiversity. However, a thorough understanding of value and supply chains reveals that reliance and impact  on nature and biodiversity are relevant for every business. The NRL may affect companies’ suppliers, customers or individual holdings directly or indirectly. The NRL and existing biodiversity reporting requirements under the Corporate Sustainability Reporting Directive (CSRD) signal to the business world that nature and biodiversity are paramount. Understanding and investing in nature and biodiversity can also open up new opportunities. The NRL aims to support the EU’s overarching climate mitigation and adaptation objectives while enhancing food security. Restoration efforts contribute to ecosystem resilience, which can lead to more sustainable long-term business models – especially for those heavily dependent on natural resources. Creating long-term sustainability Here are four steps ESG leaders can take to understand your company’s reliance on nature and biodiversity and ensure long-term sustainability.  1. Undertake value chain mapping: Value chain mapping is a crucial tool for understanding the ecosystem of your product or business operations. Gaining visibility of your value chain will assist in identifying where nature and biodiversity intersect and how they are integrated or relied upon throughout the value chain.  2. Evaluate and assess: Once you identify nature and biodiversity throughout the value chain, dependencies and impacts should be evaluated and assessed. Assess how natural resources (land, water, air) are utilised or relied on and how this relates to the locality of the resource. Nature and biodiversity can be highly local and unique. Where are the vulnerabilities and risks to nature from using resources in the value chain? What is the impact, and what can you do to mitigate it? Equally, where are the opportunities, or where can gains be made? 3. Data and technology: Relevant data and technology will give more certainty and enable informed decision-making by providing more accurate evaluations and assessments of the impacts and opportunities of business operations on nature and biodiversity. Leveraging non-financial sustainability reporting data, public datasets and geospatial tools will help build a comprehensive and accurate understanding of the interface between businesses, nature and biodiversity. Importantly, this will inform adequate action to reduce impact and dependencies while maximising opportunities. 4. Business strategy and risk management integration: Embed identified nature and biodiversity risks and actions into your broader business strategy and risk management. Increasingly, businesses are integrating sustainability into their wider business strategy, leading to sustained value, enabling strategic decision-making, driving accountability, maintaining compliance, and setting out how the cost to the business versus the contribution to society is managed. David McGee is ESG Leader at PwC Ireland

Average Chartered Accountant salary package in Leinster of €123,466, an increase of 10% over 5 years Almost 60% of chartered accountants feel AI will impact positively on their career, a significant increase on 2023 findings Wednesday 4 September 2024 – The earning potential for both experienced and newly qualified Chartered Accountants working in Leinster has increased significantly, according to data published today by Chartered Accountants Ireland Leinster Society. The survey results show the average salary package in Leinster now stands at €123,466 (up 4% on 2023), with the average basic salary of newly qualified Chartered Accountants rising to €62,374 (up 5.6% on 2023). The annual survey of over 1,100 Chartered Accountants, launched today by Chartered Accountants Ireland Leinster Society in partnership with Barden, Ireland’s leading accounting and tax talent advisory and recruitment firm, provides the most up-to-date guide to Chartered Accountant salaries and employment prospects in the Leinster region.   Strong growth in remuneration packages The research, conducted by Coyne, shows earning potential across the profession remains strong, with €123,466 the average salary package for Chartered Accountants working across all sectors. This figure includes base salary, car or car allowance, and bonus. The longer-term trends are also strong, with a 10% increase in average salary package between 2019 and 2024. 67% of respondents are satisfied or very satisfied with the salary they receive. 90% of respondents overall say their total remuneration has increased in the past three years, with 33% reporting it had increased by more than 25%. Four in five claim their total remuneration is expected to increase within the next 12 months. As part of the remuneration package, 73% expect to receive a bonus in 2024.   Most common elements in salary package The vast majority (87%) of members have a pension, with employers contributing an average 9% of their salary. After basic salary, this pension contribution is the most valued part of their package for 54% of respondents. The other most common elements in respondents’ salary packages are payment of professional subscriptions (79%); Cycle to Work scheme (59%); health insurance (55%); and sponsored professional development (51%). Artificial intelligence in the profession An increasing enthusiasm about the opportunities represented by artificial intelligence is clear from the 2024 survey findings: Over half (52%) of respondents say it is a significant opportunity for the profession (40% in 2023). 55% say it will allow the profession to move further up the value chain in terms of the work it does (47% in 2023). 57% of respondents feel that artificial intelligence will impact positively on their career (44% in 2023). In terms of the wider impact of technology on the profession, 60% feel that cloud-based accounting solutions will impact positively on their career, with 68% of respondents saying the same about automation. Commenting Damien Carr, Chairperson of Chartered Accountants Ireland Leinster Society, said:   “It is very encouraging to see growing enthusiasm about the potential of AI to move Chartered Accountants’ work further up the value chain. AI will not replace human judgement or strategic decision making however but will sit alongside these critical skills that have made Chartered Accountants among the most trusted advisors to senior business leaders. In addition, 44% of respondents agree that AI should be a regulatory priority, and I am confident that regulations such as the new EU AI Act will guide business and society in achieving this important balance. “The continued increases to newly qualified and average salaries demonstrates the level of demand that continues to exist for our profession and will help us to continue to attract the brightest talent to Chartered Accountants Ireland into the future.” Non-monetary rewards and work-life balance The survey findings identified a range of initiatives across Irish workplaces to facilitate team healthy work-life balance. The most common tools made available were the option for hybrid working (available to 83% of respondents); parental and carers’ leave (available to 49% of respondents); and an employee assistance programme (available to 50% of respondents). Job satisfaction was high amongst those surveyed, with 63% satisfied with the non-monetary aspects of their job (62% in 2023); 76% of members satisfied with their work environment (77% in 2023); and 66% happy with work/life balance (64% in 2023). Elaine Brady, Managing Partner at Barden, said: “Despite the continued backdrop of macro level uncertainty over the past 12 months, the demand for accounting talent seen in 2023 has continued strongly into 2024. Differentiating themselves and creating clear career paths is a key challenge for companies throughout Ireland. Accurate data on intrinsic and extrinsic reward can create competitive advantage for those who choose to use it. The insights gained from this publication can also help businesses and hiring managers to craft competitive reward structures to aid not just talent attraction, but as importantly, talent retention. “It is also extremely interesting to see that 83% of members have some form of hybrid working arrangements, with 3 days a week in the office becoming the average. “Also interesting to note is the change in respondents’ perception of AI, and how it will positively impact their day to day work, up to almost 57% this year, a significant increase on last year’s 44%. This in turn has an impact on satisfaction with their work, which has also increased this year to an impressive 76% of Chartered Accountants being either satisfied, or very satisfied with their work environment.”

Recent amendments to the Institute’s CPD Regulations have facilitated simplification of how members confirm compliance with CPD requirements and the Institute’s Code of Ethics[1]. Henceforth, by paying the annual membership subscription, or permitting this to be paid on their behalf, or otherwise renewing their membership, members are automatically acknowledging CPD compliance and awareness of Code of Ethics obligations. As a consequence, members generally will no longer have to submit an annual declaration (the Individual Annual Return) in respect of these matters.  Further information on the Institute’s CPD requirements is on the CPD Support & Guidance webpage.  Documents on this page also sets out circumstances in which members may apply for an exemption from CPD requirements; there are no changes in this regard.   Members who have exemptions in this regard are considered to be compliant with the Institute’s CPD Regulations as they are availing of a waiver in accordance with the CPD Regulations. Similarly, there is no change to the Institute’s current approach to substantive testing of CPD compliance whereby a sample of member CPD records is selected for review on an annual basis.  Responsible Individuals (statutory auditors) in audit firms registered by the Institute remain subject to a separate CPD compliance regime based on company law and IAASA requirements. If anyone has any further queries in relation to the above, please contact us at professionalstandards@charteredaccountants.ie. [1] Additional requirements continue to apply to members holding Practising Certificates, and who are Responsible Individuals (statutory auditors).

In Irish news, the Minister for Finance has published a second feedback statement on developing a participation exemption, and Revenue has published guidance on the new priority email address feature in ROS. In UK news, we outline the key tax elements of the new Chancellor’s summer economic statement and the Exchequer Secretary to the Treasury has written to Chartered Accountants Ireland setting out the Labour Government’s commitment to Making Tax Digital for income tax. In International news this week, the Secretary-General has issued a statement on the Rio de Janeiro G20 Ministerial Declaration on International Tax Cooperation.  Ireland Second feedback statement on participation exemption published. Revenue has published new guidance on the priority email address feature in ROS. UK Read our outline of the key tax elements of the new Chancellor’s summer economic statement. The Exchequer Secretary to the Treasury has written to Chartered Accountants Ireland setting out the new Government’s commitment to Making Tax Digital for income tax. International Read the statement by the G20 Secretary-General on International Tax Cooperation. 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 EU exit corner.

The earning potential for both experienced and newly qualified Chartered Accountants working in Leinster has increased significantly, according to data published today by Chartered Accountants Ireland Leinster Society. The survey results show the average salary package in Leinster now stands at €123,466 (up 4% on 2023), with the average basic salary of newly qualified Chartered Accountants rising to €62,374 (up 5.6% on 2023). The annual survey of over 1,100 Chartered Accountants, launched today by Chartered Accountants Ireland Leinster Society in partnership with Barden, Ireland’s leading accounting and tax talent advisory and recruitment firm, provides the most up-to-date guide to Chartered Accountant salaries and employment prospects in the Leinster region.   Strong growth in remuneration packages The research, conducted by Coyne, shows earning potential across the profession remains strong, with €123,466 the average salary package for Chartered Accountants working across all sectors. This figure includes base salary, car or car allowance, and bonus. The longer-term trends are also strong, with a 10% increase in average salary package between 2019 and 2024. 67% of respondents are satisfied or very satisfied with the salary they receive. 90% of respondents overall say their total remuneration has increased in the past three years, with 33% reporting it had increased by more than 25%. Four in five claim their total remuneration is expected to increase within the next 12 months. As part of the remuneration package, 73% expect to receive a bonus in 2024.  Most common elements in salary package The vast majority (87%) of members have a pension, with employers contributing an average 9% of their salary. After basic salary, this pension contribution is the most valued part of their package for 54% of respondents. The other most common elements in respondents’ salary packages are payment of professional subscriptions (79%); Cycle to Work scheme (59%); health insurance (55%); and sponsored professional development (51%). Artificial intelligence in the profession An increasing enthusiasm about the opportunities represented by artificial intelligence is clear from the 2024 survey findings: Over half (52%) of respondents say it is a significant opportunity for the profession (40% in 2023). 55% say it will allow the profession to move further up the value chain in terms of the work it does (47% in 2023). 57% of respondents feel that artificial intelligence will impact positively on their career (44% in 2023). In terms of the wider impact of technology on the profession, 60% feel that cloud-based accounting solutions will impact positively on their career, with 68% of respondents saying the same about automation. Commenting Damien Carr, Chairperson of Chartered Accountants Ireland Leinster Society, said:   “It is very encouraging to see growing enthusiasm about the potential of AI to move Chartered Accountants’ work further up the value chain. AI will not replace human judgement or strategic decision making however but will sit alongside these critical skills that have made Chartered Accountants among the most trusted advisors to senior business leaders. In addition, 44% of respondents agree that AI should be a regulatory priority, and I am confident that regulations such as the new EU AI Act will guide business and society in achieving this important balance. “The continued increases to newly qualified and average salaries demonstrates the level of demand that continues to exist for our profession and will help us to continue to attract the brightest talent to Chartered Accountants Ireland into the future.” Non-monetary rewards and work-life balance The survey findings identified a range of initiatives across Irish workplaces to facilitate team healthy work-life balance. The most common tools made available were the option for hybrid working (available to 83% of respondents); parental and carers’ leave (available to 49% of respondents); and an employee assistance programme (available to 50% of respondents). Job satisfaction was high amongst those surveyed, with 63% satisfied with the non-monetary aspects of their job (62% in 2023); 76% of members satisfied with their work environment (77% in 2023); and 66% happy with work/life balance (64% in 2023). Elaine Brady, Managing Partner at Barden, said: “Despite the continued backdrop of macro level uncertainty over the past 12 months, the demand for accounting talent seen in 2023 has continued strongly into 2024. Differentiating themselves and creating clear career paths is a key challenge for companies throughout Ireland. Accurate data on intrinsic and extrinsic reward can create competitive advantage for those who choose to use it. The insights gained from this publication can also help businesses and hiring managers to craft competitive reward structures to aid not just talent attraction, but as importantly, talent retention. “It is also extremely interesting to see that 83% of members have some form of hybrid working arrangements, with 3 days a week in the office becoming the average. “Also interesting to note is the change in respondents’ perception of AI, and how it will positively impact their day-to-day work, up to almost 57% this year, a significant increase on last year’s 44%. This in turn has an impact on satisfaction with their work, which has also increased this year to an impressive 76% of Chartered Accountants being either satisfied, or very satisfied with their work environment.” ENDS  Note to editors  The survey was conducted by Coyne Research on behalf of Chartered Accountants Ireland Leinster Society, in partnership with Barden, between 7 June – 24 June 2024. About Chartered Accountants Ireland Leinster Society   Chartered Accountants Ireland Leinster Society is a district society of Chartered Accountants Ireland, representing over 16,000 Chartered Accountants throughout Leinster.   Chartered Accountants Ireland is Ireland’s leading professional accountancy body, representing over 38,400 members in over 100 countries and educating 6,600 students. In February 2024, members of Chartered Accountants Ireland and CPA Ireland elected to join together as a single professional body. On 1st September 2024, members and students of CPA Ireland became incorporated into Chartered Accountants to create the largest professional body on the island of Ireland. Chartered Accountants Ireland is one of the top 20 professional accountancy bodies in the world, by size. It is an all-island body established by Royal Charter in 1888, working to create opportunities for members and students as well as advancing the public interest. It is a founding member of Chartered Accountants Worldwide, the international network of over 1.8 million chartered accountants. Chartered Accountants Ireland members also play key roles in the Global Accounting Alliance, Accountancy Europe and the International Federation of Accountants. Chartered Accountants Ireland’s members provide leadership across both the public and private sector, bringing experience, trusted expertise, and strict standards to all aspects of their work.  Chartered Accountants Ireland engages with a number of stakeholders including governments, policy makers, regulators, and business groups on key issues affecting the profession and the wider economy. Chartered Accountants Ireland supports members at every stage of their career from education to qualification to continuing professional development.   About Barden Barden is a partner led talent advisory and recruitment firm consumed with supporting companies that really know the value of their people. Barden’s expertise covers Accounting & Finance, Business Support, Engineering, Legal, Life Sciences, Projects & Transformation, Supply Chain & Procurement, Technology, and Tax & Treasury, talent advisory and recruitment. Chartered Accountants specifically choose to join Barden in order to use their qualification in a different way. Barden has proudly partnered with the Chartered Accountants Ireland Leinster Society, for the last seven years, to bring you the annual salary survey. Barden also works closely with Chartered Accountants Student Society of Ireland (CASSI) and Young Professionals to make sure their members get access to the right information, at the right time in order to make more informed decisions about their professional future.    

In the first EU exit corner after the summer break, we bring you the latest guidance updates and publications relevant to EU exit and highlight upcoming milestones under both the Windsor Framework and the UK Government’s Border Target Operating Model. The most recent Trader Support Service bulletin is also available. The Department for the Environment and Rural Affairs has sent an email containing updates for exporters to the EU and HMRC has sent an update on XI EORI numbers which we set out below. Upcoming milestones As we move into September, it is now just a matter of weeks before the next stages in both the Windsor Framework and Border Target Operating Model (BTOM) commence. From 30 September 2024, the Windsor Framework green lane will broaden to all UK Internal Market Scheme authorised traders. Full international customs requirements for traders will be removed and simplified procedures will apply. This will specifically affect parcels moving from GB to NI. From 31 October 2024, phase three of the BTOM commences. From this date, safety and security declarations for EU imports will come into force. Alongside this, the UK will introduce a reduced dataset for imports. The goal is to reduce duplication in customs declarations. More information and guidance from the UK Government is expected ahead of these forthcoming changes and will feature in our EU exit corner. Update on XI EORI numbers HMRC has recently been notifying traders with an XI EORI and EIDR (Entry in Declarants Records) authorisation that the Goods Vehicle Movement System (GVMS) now accepts the use of an XI EORI. Traders should use their XI EORI in GVMS straightaway. The communications were issued to traders via email (if HMRC held a valid email address) or post at the beginning of August 2024. If a trader does not make EIDR movements between Great Britain and Northern Ireland using GVMS, they will not have received any communication, and they don’t need to take any action as these changes do not affect them. More information is available in the section below headed ‘Using GVMS for EIDR movements between GB and Northern Ireland’. The full update from HMRC is as follows: “Goods Vehicle Movement Service: changes to allow the use of an XI EORI in the ‘Entry in Declarant’s Records’ EIDR field We have recently made changes to the Goods Vehicle Movement Service (GVMS). Businesses with an Economic Operator Registration and Identification (EORI) number starting with XI, should now use an XI EORI, if they have one, with a valid EIDR authorisation to generate the Goods Movement Reference (GMR) number in GVMS when moving goods from Great Britain to Northern Ireland. If a trader does not make EIDR movements between Great Britain and Northern Ireland using GVMS, they don’t need to take any action as these changes will not affect them. What is an EIDR movement?  An EIDR movement involves declaring goods by entering them into a trader’s own records and sending other details to customs. They can do this if they are authorised to use the EIDR process. You can find more details at: https://www.gov.uk/guidance/making-an-import-declaration-in-your-records. Using the Trader Support Service If a trader uses the Trader Support Service (TSS), there will be no change to the existing process for them and they don’t need to take any further action. The TSS will continue to confirm the EORI number that the trader should use when they submit their pre-movement information. The trader should put that EORI into GVMS to generate the GMR. Using GVMS for EIDR movements between GB and Northern Ireland If a trader has an XI EORI with an associated EIDR authorisation and they do not use TSS, there are actions they’ll now need to take. If a trader is creating a GMR they should continue to use their GB EORI number to access and log into the GVMS system use the XI EORI linked to a valid EIDR authorisation to generate the GMR number in GVMS for NI EIDR movements If someone creates GMRs on a trader's behalf Please make sure they inform the haulier, or the third party moving the goods for them, of their XI EORI number associated with the EIDR authorisation to use in GVMS. Further help and support For more information on GVMS, go to GOV.UK and search ’Register for Goods Vehicle Movement Service’. If you have any questions, please call our helpline on 0300 322 9434 and refer to this letter. For support or more information on the Trader Support Service, call the TSS Contact Centre on 0800 060 8888 (0800 060 8988 for Welsh speakers) or go to GOV.UK and search ‘Trader Support Service’.” Miscellaneous updated guidance etc. Recently updated guidance, and publications relevant to EU exit are set out below: Check if a business holds Authorised Economic Operator status, Apply for release of a private vessel on payment of Customs Duty and VAT, Transit newsletters — HMRC updates, Data Element 2/3: Document and Other Reference Codes: Licence Types — Imports and Exports of the Customs Declaration Service (CDS), Additional Information (AI) Statement Codes for Data Element 2/2 of the Customs Declaration Service (CDS), Known error workarounds for the Customs Declaration Service (CDS), How to pay duties and VAT on imports from outside of the UK, Notices made under the Customs (Export) (EU Exit) Regulations 2019.

In this week’s miscellaneous updates, the latest Agent Update is available and HMRC has provided an update on the issue of voluntary Class 2 NIC contributions (NICs) being repaid in error. Regulations which exempt certain payments under the Horizon scandal have been laid and HMRC has published the July 2024 public service pensions remedy newsletter. HMRC has flagged to us a new fraud scam being sent by post. And finally, the latest schedule of HMRC live and recorded webinars for tax agents is also available for booking. Spaces are limited, so take a look now and save your place. Latest Agent Update Agent update: issue 122 is available now. Get the latest guidance and information including: How to support sole trader clients as they get started in business, Alcohol Duty – new digital service, Making a start on your client’s 2023/24 Self-Assessment tax return, Applying for healthcare cover in the EU, Iceland, Liechtenstein, Norway or Switzerland, How to avoid errors in claims for plant and machinery allowances.  Update on erroneously refunded voluntary Class 2 NICs HMRC has provided an update on this issue which was previously outlined in Tax News and advises that the approximately 8,000 taxpayers affected have now been identified. HMRC aims to write to them in September 2024 to explain how to reinstate any voluntary class 2 NICs paid for 2022/23 and refunded in error and correct their NICs record, which is important for State Pension purposes. HMRC apologises for the inconvenience and confusion this may have caused and aims to instigate measures to ensure this does not happen again.  Tax exemptions for postmasters Regulations came into force from 16 August 2024, which have retrospective effect from 13 March 2024 for tax purposes, in order to exempt payments made under the Horizon Convictions Redress Scheme and the Horizon Shortfall Scheme (HSS) Fixed Sum Award. Payments are exempt from income tax, NICs and capital gains tax. Such payments are also exempt from inheritance tax, and any HSS Fixed Sum Award payments are exempt from corporation tax. More information is available here: The Horizon Convictions Redress Scheme and Horizon Shortfall Scheme Fixed Sum Award (Tax Exemptions and Relief) Regulations 2024, SI 2024/818, The Social Security (Contributions) (Amendment No. 4) Regulations 2024, SI 2024/822 Government policy paper: The Horizon Convictions Redress Scheme and Horizon Shortfall Scheme Fixed Sum Award — tax treatment New fraud scam letter In recent weeks, a new letter has been circulating on social media (see photos attached here and here) which HMRC has confirmed it has not issued and is an example of fraudulent activity. HMRC has made the Professional Bodies aware in order to share the information below to advise of the correct steps to take should you have any further concerns or incidents about suspicious contact. The update from HMRC is as follows: “Criminals are great pretenders. They use various methods to try and dupe citizens, and often mimic government messages to make them appear authentic. Tax scams come in many forms. Some offer a rebate, others tell you that your tax details are out of date or threaten immediate arrest for tax evasion. Never let yourself be rushed. If someone contacts you saying they’re HMRC, wanting you to urgently transfer money or give personal information, be on your guard.  We will also never ring up threatening arrest. Only criminals do that.  Unexpected contacts like these should set alarm bells ringing, so take your time and check HMRC scams advice on GOV.UK.” Background For more advice on how to stay safe online, visit the new Home Office ‘Stop! Think Fraud’ website. HMRC’s Advice Protect Criminals are cunning - protect your information. Take a moment to think before parting with your money or information.    Use strong and different passwords on all your accounts so criminals are less able to target you. Recognise If a phone call, text, letter or email is suspicious or unexpected, don’t give out private information or reply, and don’t download attachments or click on links. Check on GOV.UK that the contact is genuinely from HMRC.   Do not trust caller ID on phones. Numbers can be spoofed.  Report If you’re unsure about a text claiming to be from HMRC forward it to 60599, or report a letter or email to phishing@hmrc.gov.uk. Report a tax scam phone call on GOV.UK.    Contact your bank immediately if you’ve had money stolen, and report it to Action Fraud. In Scotland, contact the police on 101.  By reporting phishing emails, you help stop criminal activity and prevent other people falling victim.”   

During the summer, HMRC published its 2023/24 Annual Report and Accounts together with performance statistics for 2023/24 and a commentary. The 2023/24 HMRC Annual Charter Report was also published. A recurring theme in all these publications is that HMRC continues to underperform and misses key targets and in particular, call waiting times have increased significantly. So far, the new Labour Government has not provided any information on how it plans to tackle HMRC’s ongoing poor service levels. Chartered Accountants Ireland will continue to express our concerns in respect of these ongoing poor service levels and how this is impacting taxpayers, agents and businesses.   2023/24 Annual Report and Accounts These accounts were once again qualified by the Comptroller and Auditor General due to error and fraud in tax credits in addition to qualifying his opinion on HMRC’s Resource Account for error and fraud in corporation tax research and development tax reliefs. This is the second year that the R&D SME scheme estimate has been prepared using the results of a random enquiry programme. The first modelled estimate for 2021/22 has been revised as results from the random enquiry programme now includes claims received in 2021/22. See page 21 for more detail.   The level of HMRC debt at the end of 2023/24 was £44.6 billion (£45.9 billion 2022/23), with £7.1 billion in time to pay arrangements and £37.5 billion available for collection. Approximately 900,000 taxpayers have time to pay arrangements.   The HMRC app also gets a mention in the report with almost two million new users and 69 percent of interactions with HMRC now take place online.      HMRC’s CEO in his report recognises the difficulties that have been experienced by many individual taxpayers, agents and small businesses when interacting with HMRC – in particular, when accessing helplines and says that HMRC is working hard to address these challenges with a strategy “firmly focused on how we can help more customers get their tax and customs right first time, rather than fixing problems after they happen, and on supporting more customers to self-serve using online services whenever they can.”   However, the impact of the reduction to HMRC’s budgets is clear as is the increased demand due to fiscal drag which has resulted in an additional 2.1 million individuals being brought into income tax (according to the latest figures from the Office for Budget Responsibility).   2023/24 performance statistics These set out details of five specific targets with only one having been met for 2023/24; compliance yield. It should also be noted that the average speed of answering calls, and the waiting time of no more than 10 minutes are both no longer treated as priority metrics by HMRC; likely to be because of its digital strategy. Not surprisingly, both of these measures have deteriorated significantly as follows:   average waiting times have reached 26 minutes, and ·nearly 75 percent of callers wait more than 10 minutes.   2023/24 HMRC Annual Chartered Report Poor service levels were a recurring theme in HMRC’s 2023/24 Annual Charter Report as agents and taxpayers again vented their concerns after a year in which standards continued to fall below expectations. HMRC’s Charter sets out the standards of service that taxpayers and agents should expect from HMRC.   The report includes the results of research commissioned by HMRC and shows a fall in the percentage of agents, individuals and small businesses who positively rated their overall experience of interacting with HMRC. For agents, 37 percent gave a positive rating, down 8 percent from 2022/23.   A survey was also undertaken by the Charter Stakeholder Group which asked respondents to give a score out of 10 for HMRC’s performance against each of the charter standards, with one being the lowest and 10 the highest. 1,647 responses were received, mainly from agents.    The three standards which can arguably be said to represent the health of the tax system scored the lowest average scores as follows:    being responsive - 2.4; making things easy - 2.8; and getting things right - 3.5.    Overall, feedback indicates that, although simple issues can be dealt with well, more complex issues are difficult to resolve. Higher scores were recorded for the remaining five charter standards.

In a recent letter to Chartered Accountants Ireland, the new Exchequer Secretary to the Treasury clearly sets out the Labour Government’s ongoing commitment to Making Tax Digital (MTD) for income tax. Effectively, although the letter does not explicitly say so, the timetable for commencement remains unchanged and will commence for unincorporated businesses and landlords as originally planned from April 2026 for those with turnover exceeding £50,000 with the turnover over £30,000 population mandated from April 2027. The letter highlights that 2024/25 is a critical stage in the delivery of MTD for income tax as HMRC’s focus is on developing a successful testing phase. It also clearly reiterates that this will not be achieved without continued strong collaboration between HMRC and external partners, such as Chartered Accountants Ireland. One of the key requirements of the testing is to ensure that the right quantity and types of businesses can participate. This is one area where the government sees an important role for representative bodies like Chartered Accountants Ireland. The Institute will be providing a full update on recent developments in MTD for income tax in a later edition of Chartered Accountants Tax News in September. We will also continue to attend HMRC MTD forum meetings and collaborate with HMRC on MTD for income tax to assist members and businesses in their preparation for this change.

Just before the summer parliamentary recess commenced at the end of July, new Chancellor of the Exchequer Rachel Reeves announced that the Labour Government’s first Budget will take place on Wednesday 30 October. The Chancellor also announced next steps and published draft legislation on some “priority tax commitments” ahead of the full announcements which will take place on Budget Day. The Finance Bill 2024-25 draft legislation and technical tax documents were also published and several new tax policy announcements were made, including the expected removal of the VAT exemption for private school fees. A full Ministerial Written Statement is also available and it is confirmed that there will be no increases to income tax, employee national insurance contributions, or VAT.    The measures announced in July included the following:   2024: Non-UK domiciled individuals - policy summary - this confirms that the four-year foreign income and gains regime announced by the previous government at the Spring Budget will take effect for all foreign income and gains arising from 6 April 2025. However, the proposal to provide a 50 percent reduction in foreign income subject to tax for individuals who lose access to the remittance basis in the first year of the new regime will not be introduced. A temporary repatriation facility will be available for individuals who have been taxed on the remittance basis, and a form of overseas workday relief will be retained. Further details will be provided at the Budget. The current domicile-based inheritance tax (IHT) system will proceed, again as announced by the previous government, to be replaced with a new residence-based system from 6 April 2025. This will be based on whether or not a person has been resident in the UK for 10 years prior to the tax year in which the chargeable event (including death) arises, with a 10 year “tail provision” to be introduced after leaving the UK. The new government intends to end the use of excluded property trusts to keep assets out of the scope of UK IHT. Confirmation of these new rules, including transitional arrangements, will be published at the Autumn Budget, after external engagement. A formal consultation will not be taking place. The furnished holiday lettings tax regime is being abolished as planned from April 2025 with an anti-forestalling rule in place from 6 March 2024 to prevent the use of unconditional contracts to obtain capital gains tax relief under the current rules. Details of a number of transitional rules necessary as a result of this change have also been published.   Announcements were also made in the following niche areas:   Pillar 2: transitional country-by-country reporting safe harbour anti-arbitrage rule, Tax treatment of carried interest - Call for Evidence, and Changes to the Energy (Oil and Gas) Profits Levy.   Tax non-compliance The government also set out its commitment to tackling tax non-compliance in the publication “Fixing the foundations: public spending audit 2024-25” with the new Exchequer Secretary to the Treasury stating that work has begun on recruiting 5,000 more HMRC staff specifically for this purpose. The government also stated its commitment to investing in HMRC’s technology infrastructure. Further updates will be provided on this at the Budget.   End of private school fees VAT exemption The ending of the VAT exemption and the introduction of 20 percent VAT on education and boarding services provided for a charge by private schools across the UK will commence from 1 January 2025. This will also apply to pre-payments of fees for terms starting on or after 1 January 2025 made on or after 29 July 2024. However, this change will not apply where pupils with the most acute special educational needs can only have those needs met in private schools.    Schools cannot register yet for this charge on education and boarding. In due course, HMRC will provide schools with details on how and where to register.   More information on this is available in the publication “Revenue and Customs Brief - removal of the VAT exemption for private school fees and boarding services.” You can also read the draft legislation, accompanying explanatory note, and technical note which are being consulted on until 15 September.

The Secretary-General has issued a statement on the Rio de Janeiro G20 Ministerial Declaration on International Tax Cooperation. G20 Members have agreed a comprehensive stand-alone Tax Declaration, reflecting the transformational achievements of international tax cooperation to date, the importance of that cooperation and its commitment to continue to carry it forward.