The Department of Finance has published the responses it received to the first Feedback Statement on the strawman proposal on a participation exemption. In May 2024 the Institute, under the auspices of the CCAB-I, responded on the basis that it supports the introduction of a participation exemption so that the exemption applies by default with no minimum ‘opt-in’ period. There were 20 submissions to the Department and the full list can be accessed at gov.ie.  

Revenue has updated the Tax and Duty Manual which provides guidance on film withholding tax to advise film producer companies and their agents of a change to the system for uploading film withholding tax returns (section 9). The Revenue File Transfer System (RFTS) has replaced the ROS secure upload facility for this purpose. 

Revenue has informed us that it has released a number of fixes to Form 11 2023 following the report of a number of issues with its processing and computation systems. However, several items are still to be resolved:  Issues where ROS is taxing deposit interest at 40 percent,  Issues where ROS is not applying the 3 percent USC rate on non-PAYE income exceeding €100,000.   Revenue plans a further release by 15 July 2024 to apply the correct treatment to both of these areas.   The issue with Department of Social Protection (DSP) income pre-population on Form 11 2023 was fixed on 2 April 2024 and is working correctly for DSP pension payments. However, a further fix is being worked on for other DSP incomes (Jobseekers, Illness benefit, etc.).   The issue with DSP pre-population on Form 11 2022 has been incorrect since 2 April 2024, and affects late filers from that date. It is due to be fixed on 15 July.    Furthermore, the Institute has been made aware of unannounced changes to Form 11 2023  which may impact taxpayers and their agents, in particular those using third party software. We have requested that Revenue clarify the changes being made and will continue to update members via Tax News. 

Ahead of the UK’s general election on Thursday 4 July, we take a look at the tax policies of the two largest parties in Northern Ireland.  The DUP’s tax policies and promises  The Democratic Unionist Party (DUP) published its full manifesto last week. The party continues to argue that further work is needed on the Windsor Framework and “we will continue to argue the case for the full primacy of the United Kingdom internal market, and we will continue to reject the undermining of its integrity………..In October, as part of the NI Assembly vote on the current arrangements, we will not hesitate to vote against their continued application and, drawing upon the new mechanisms at our disposal, we will continue our quest through the inbuilt review.”  A lower rate of corporation tax for Northern Ireland also featured, something which the Institute has been campaigning on for many years. The Institute is currently developing a briefing paper on the benefits, challenges, and potential mitigations to any challenges of a lower rate of corporation tax for Northern Ireland which it plans to use as a mechanism to drive this issue forward.   The DUP’s analysis of a lower rate of corporation tax for Northern Ireland features on page 29 of their manifesto and reads as follows:  “Lowering the rate of corporation tax in Northern Ireland has been a longstanding DUP policy. This would boost Northern Ireland as an attractive investment opportunity, building on the strength, skill and ingenuity of our workforce. The minimum effective 15% rate in the Irish Republic places firms in Northern Ireland at a competitive disadvantage and we want to see this addressed. We continue to advocate for a reduction in corporate tax across the United Kingdom and DUP MPs opposed the increase in the main UK corporation tax rate from 19% to 25% in 2023.   The DUP believes there are a number of fundamental issues that require resolution with the Treasury before the powers to vary corporation tax rates - which are already provided for in law - can be enacted. We are clear that progress must be based on solid foundations. That means ensuring a process of implementation that protects spending on public services in the short to medium-term.”  DUP MPs will also campaign to:   Oppose the freeze on the personal tax allowance and higher rate income tax threshold  Seek further reductions in national insurance  Support an increase in the starting age for employee national insurance  Encourage the government to explore the merits of moving to single tax on all income, replacing income tax and national insurance  Freeze vehicle excise duty  Abolish VAT on domestic electricity bills  Maintain the freeze on fuel duty  Oppose any increase in insurance premium tax   Increase the tax-free childcare allowance from 20 percent to 35 percent  Remove the cap on tax free childcare above £2,000  Scrap VAT on school uniforms  Support the triple lock on state pensions   Support the personal allowance for pensioners always being above the amount of the state pension  Increase the VAT registration threshold for SMEs to £100,000 and then uprate it in line with inflation  Drive up the number of SMEs benefiting from tax reliefs  Ensure the national insurance liability for small businesses is fair: the Employment Allowance should be uprated in line with increases to the national living wage  Promote greater awareness of capital allowances and R&D tax reliefs among local businesses  Explore the potential introduction of an online sales tax targeting online corporates and marketplaces  Support robust efforts to crack down on global tax evading corporations  Aim for the VAT system to be better utilised to incentivise investments that promote improved productivity through low-carbon and green technologies  Continue to campaign for a reduction in VAT for hospitality across the UK, and   Expand UK research & development tax relief for small and medium sized enterprises to include capital expenditure.  In its 2022 Assembly Election manifesto, the DUP also argued that the necessary capacity did not exist for Northern Ireland to devolve additional fiscal powers. That remains its position at this time.   Sinn Fein’s tax policies  Sinn Fein published its full manifesto in mid-June, a 10 page document which did not contain any detail on tax pledges. However publicly, the party has taken a slightly different position to the DUP on the devolution of more fiscal powers arguing that although there are "important considerations" about the political and administrative capacity for Stormont to take on new responsibilities, the experiences of Scotland and Wales demonstrate that this capacity can be developed over time which "it is not a reason in itself to not consider devolution". 

Revenue has published a report setting out the key findings from the public consultation on modernising Ireland’s administration of VAT. The initial stage of the consultation, which launched in October 2023, focused on the modernisation of Business to Business (B2B) and Business to Government (B2G) VAT reporting, underpinned by eInvoicing.  The Institute’s response to the consultation, under the auspices of the CCAB-I, was one of 1,118 responses received by Revenue. The majority of responses were received from VAT registered businesses, of which 54 percent operate as a sole trader or partnership. Only 20 percent of business respondents trade in goods only, 55 percent provide only services, with 25 percent providing both goods and services.   The majority of business respondents had annual turnover not exceeding €700,000, with 46 percent reporting annual turnover of less that €100,000. By contrast, just 6 percent of responses were from firms whose turnover is more than €12 million each year.   Businesses and other stakeholders both emphasised the need for modernisation to be implemented cost-effectively and within existing businesses systems as far as possible, with minimum business disruption in terms of cost and resource time. An appropriate lead-in time with phased implementation and a suitable transition period, supported by early publication and certainty on the detailed technical requirements with a strong preference that these specifications should be consistent with VAT in the Digital Age (ViDA) is a priority. They also highlighted the importance of maintaining robust controls and data security measures to safeguard sensitive financial information from cyber threats and data breaches.  Revenue acknowledges and thanks all those who took the time to contribute to the process. It notes that further consultations and other public engagement will follow, as reform proposals take clearer shape, are tested, refined, and put into operation.  The CCAB-I will continue to work with Revenue on this project via the TALC Indirect Forum and TALC VAT Modernisation Subgroup and will keep readers updated.  

The latest Tax Gap publications for 2022/23 were published last month by HMRC and set out how the tax gap has increased by £1.7 billion to £39.8 billion in absolute terms. In percentage terms the tax gap is 4.8 percent (5.2 percent 2021/22) of the £823.8 billion total theoretical tax liabilities for 2022/23. The tax gap is the difference between what HMRC expects the total tax take for 2022/23 to be, and the actual tax received. According to the statistics in the publications which are linked below, small businesses accounted for nearly two thirds of unpaid tax.   The largest components of the tax gap by tax type are the Corporation Tax gap and the Income Tax, National Insurance Contributions and Capital Gains Tax gap, both at a 34 percent share, followed by the VAT gap with a 20 percent share. As in previous years, the tax gap from small businesses is the largest component of the tax gap by taxpayer group which was a 60 percent share in 2022/23.   There was also strong year-on-year growth in HMRC’s tax receipts in these two years, most likely due to fiscal drag. You can read the published receipts figures on GOV.UK.  The 2022/23 Tax Gap publications are as follows:  Measuring tax gaps tables  Quality report: Measuring tax gaps, and  Measuring tax gaps 2024 edition: tax gap estimates for 2022 to 2023.   

Do you complete expenses and benefits returns? Or do you complete online filing for employment related securities? If so, you have a key role to play in ensuring returns are submitted by the 2023/24 filing deadline of 6 July 2024 and payments are made on time. The 2023/24 deadline to apply for a PAYE settlement agreement (PSA) is 5 July 2024, with payments due by 22 October 2024 (19 October 2024 if not paying electronically).  By way of reminder, from 6 April 2023, forms P11D and P11D(b) can only be submitted online by employers (except for the digitally excluded). Also, since 6 April 2023, an online service is available for employers and their agents to apply for a PSA.   It should also be noted that where Enterprise Management Incentive (EMI) options are granted on or after 6 April 2024, although the statutory reporting deadline is 6 July following the end of the tax year, some plan rules require the employer to notify HMRC within 92 days of grant. If this is the case, failure to report within the deadline can lead to the option lapsing or becoming non-tax advantaged. We recommend that employers check any EMI plans urgently to ensure this deadline is not missed.     Here’s a reminder of the key deadlines:  6 July 2024 - deadline for submitting all 2023/24 P11D(b) and P11D forms, and the employee must receive their copy of the P11D  6 July 2024 – deadline for online reporting of the 2023/24 annual return in respect of employment related securities  19 July 2024 - deadline for non-electronic payment of Class 1A National Insurance Contributions (NIC) for 2023/24, and   22 July 2024 - deadline for electronic payment of Class 1A NIC for 2023/24.   Looking ahead to the future, we also remind you that from April 2026, the reporting and payment of income tax and Class 1A National Insurance Contributions on benefits in kind must be done via payroll software.  

In this week’s EU exit corner, we bring you the latest guidance updates and publications relevant to EU exit. The most recent Trader Support Service bulletin is also available and HMRC is warning about issues with license data flows between the Customs Declarations Service (“CDS”) and the Department for Business and Trade's (DBT) electronic licensing systems.   CDS licensing issues  HMRC has become aware of issues with licence data flows between the CDS and the DBT’s electronic licensing systems (also known as SPIRE/LITE). According to HMRC, these are temporary issues which happen if a CDS export declaration contains errors that impact the licence. If this occurs, the declaration cannot progress to cleared. HMRC has published guidance for declarants on how to deal with the issue and is currently working on a resolution with the DBT. An update will be provided in due course.  Miscellaneous updated guidance etc.   Recently updated guidance, and publications relevant to EU exit are set out below:  Authorised Consignee Temporary Storage (ACTS) location codes for Data Element 5/23 of the Customs Declaration Service  Known error workarounds for the Customs Declaration Service (CDS)  Claim repayment or remission of charges on rejected imports  How to claim a repayment of import duty and VAT if you've overpaid  Transit newsletters — HMRC updates  Internal temporary storage facilities (ITSFs) codes for Data Element 5/23 of the Customs Declaration Service  Data Element 2/3: Documents and Other Reference Codes (Union) of the Customs Declaration Service, and  Apply for release of a private vessel on payment of Customs Duty and VAT.   

Revenue has updated the Tax and Duty Manual which provides guidance on the Enhanced Reporting Requirements (ERR) for employers. As previously reported, the period of Revenue’s ‘service to support compliance’ is extended to the year end. The updated guidance therefore confirms that in the period 1 July 2024 to 31 December 2024, Revenue will continue to support employers in relation to their ERR obligations and will not seek to apply penalties for non-compliance.  The updated manual also confirms that from 1 July 2024, there is a firm expectation that all employers providing reportable benefits submit details of same on or before the provision of the benefit. It is also expected that any employer who commences filing after 1 July, will be expected to backdate its filings to 1 July 2024.   Employers experiencing difficulties complying with ERR are advised to report issues to Revenue through MyEnquiries, or through the National Employer Helpline, which can be contacted on (01) 738 3638 between 09.30 and 13.30 Monday to Friday.   Feedback on issues or problems you experience with the new ERR reporting regime can also be emailed to the Institute and we will continue to engage with Revenue through the TALC process.  

In every issue of The Bottom Line, we ask students for their thoughts on a particular topic. This month, we want to know: what's the biggest challenge you've overcome training to be a Chartered Accountant? Lydia Kelly, Deloitte As a fresh and enthusiastic graduate of the BSc in Accounting at UCC, I was confident in my expectations and understanding of the role of a trainee Chartered Accountant. As I commenced my training contract with Deloitte’s audit department in Cork, however, I succumbed to the pitfall of strictly classifying my time into two categories: work or study. It seemed like the natural course of action to gain the skills and knowledge needed in the working world, while also staying on top of my pre-recordings and webinars for the dreaded exams. This, however, led me to burnout. It was a steep learning curve as I discovered that committing 100 percent of yourself 100 percent of the time does not equal success. Although work and study are two of the main components of becoming a Chartered Accountant, there is also a third – self-care. It can be all too easy to neglect your mental and physical health when you feel stressed. I fell victim to this during my CAP2 exams and the busy season. Helpful advice I received during this time was that self-care should be part of your timetable – not just a reward at the end. This is something I will continue to apply in my professional career long after completing my training as a Chartered Accountant. Conor Flynn, EY Training to be a Chartered Accountant can present an array of challenges, particularly at the beginning of the training contract. Although some of these challenges will be specific to the individual, there are common hurdles all trainees must overcome. These include effectively managing your time, achieving work-life balance and passing your exams. My training contract began in September 2021, a period during which COVID-19 dominated all our lives and remote working had become the norm. Joining a new firm in normal circumstances can be challenging; joining a new firm during a pandemic, and working remotely for the first time, presented me with an entirely new set of challenges. Beginning my journey to becoming a Chartered Accountant in a remote environment wasn’t easy. Although my team put systems in place to reduce the impact of remote working on new people joining the firm, the benefits of working in the office for trainees cannot be replicated entirely online. My experience was that effective communication, collaboration and relationship-building were significantly more difficult online. What I learned was that the importance of the office cannot be understated. It enables trainees to develop a professional identity and sense of belonging within their firm. Therefore, I see the move to hybrid working as a positive for trainees. The benefits it brings include greater opportunity to collaborate and build relationships alongside the welcome flexibility of remote working. Tony Sanchex, Deloitte I think for me the biggest challenge I have faced in training to be a Chartered Accountant is learning how to apply my theoretical studies in real-world business situations. Considering the exam style, especially at the FAE level, we have been pushed out of our comfort zones as we apply relevant accounting standards, analytics and general knowledge to cases we may very well face at some stage in our professional careers. Thankfully, the support and client experience I have gained working with Deloitte has allowed me to practice this skill every day. This type of learning doesn’t happen overnight of course, but I have found that the more you think about the business environment, industry trends and economic factors impacting clients on a day-to-day basis, the easier it is to tackle your exam technique, as well as develop a healthy work habit for life.

Newly qualified accountants frequently navigate two to three job changes within their first five years post-qualification. Driven by a thirst for new challenges, diverse career paths, international adventures and enticing compensation packages, these moves are essential steps toward finding their ideal professional fit. Generally speaking, accountants will make an average of two to three career moves, either internally or externally, within their first five years of Post Qualification Experience (PQE). The first of these moves tends to naturally occur at the 18–24 month PQE mark. Why? It can be challenging to transition from a part-qualified to fully qualified accountant, particularly if you’ve completed a training contract in audit. Stepping into a finance department requires accountants to get to grips with new concepts, tasks and processes. After 18 months, most accountants may find that they have sufficiently adapted to their new roles and are ready for the next step in their career progression. Why move? There are several reasons why you might want to hop to a new job PQE. Exploring different career paths An ‘accountant’ role has several definitions and nuances. From consolidating financial statements in a group function of a PLC to maintaining the general ledger for specific entities within a shared services environment, no two ‘accountant’ roles are the same. Sometimes, it is difficult for a newly qualified (NQ) accountant to know which role suits them best – they need to try them out first. Contract roles, which are common for NQ accountants, offer a valuable opportunity to test-drive different roles, industries and work environments in a short period of time. Changing roles allows them to discover their strengths, preferences and, ultimately, the type of career that's the best fit. International opportunities A disruption to travel caused by COVID has accelerated the trend of accountants emigrating to Australia, the UK, Dubai or Canada post-qualification to spend a few years living and working abroad. Working visas necessitate frequent job changes as accountants experience different cultures, companies, and work styles within a limited timeframe. Reward package The near-full employment environment has created an employee-led market, where accountants have multiple career options from which to choose. With more NQ accountants emigrating, the pool of talent has diminished even more, further tightening competition for talent at this level, giving accountants leverage to negotiate attractive salary packages and benefits. As a result, NQ accountants may be more likely to make a job change if they are offered a more competitive compensation package elsewhere. In essence, a lot of it comes down to the demographic. At these early stages of their careers, accountants want to try new things and figure out where they are best placed. What to keep in mind If you’re a newly qualified accountant thinking about job hopping, there are some considerations to keep in mind: Several career moves may not present well on your CV: While exploring different roles can be valuable, a CV overflowing with short-term positions within a few years can raise red flags for hiring managers. They might question your commitment, stability or even competence without ever meeting you. If your moves have been for genuine reasons, it is a good idea to write a one-line explainer with each career move on your CV. This will provide the hiring manager with context about the reasons you moved roles. Think about your long-term objectives: There can be great value to staying with one organisation for several years, particularly if you are offered the opportunity to move internally within the organisation. You will get to know the business from different perspectives, deeply understanding its key financials, processes and strategy. Furthermore, you can develop strong relationships with your colleagues. This network becomes a support system for your professional development and opens doors to future opportunities. However, internal promotions/development are not always an option. Headcount limitations or a lack of opportunities to progress to more senior positions can result in accountants becoming “stuck” in their current roles. This is another contributing factor to this cohort of accountants looking to move externally. Be clear about your motivation: Before you click that “apply” button or say “yes” to an interview, question why you are considering a new role. Is there more room for growth and learning in your current role/organisation? Does the new role align with your long-term career aspirations? Is this move purely motivated by financial gain? By being clear about your motivations, you can target your job search strategically toward opportunities that facilitate your growth and set you up for long-term success. In some cases, there might be untapped potential for growth within your current organisation. Consider having a conversation with your manager about your career aspirations and exploring internal mobility options. Equipping yourself with the right knowledge and a strategic approach can help you navigate these early career moves with confidence and purpose. While exploring different roles and organisations is a natural part of your career journey, focus on opportunities that offer learning and propel you toward your long-term career goals. By prioritising growth over short-term financial gains, you'll be well on your way to building a successful and fulfilling career. Brian O'Connor ACA is the Team Lead of the Recently Qualified Accountants division of Barden’s talent advisory and recruitment firm in Leinster.

In the pursuit of academic excellence, students often overlook the power of breaks. Discover why strategic pauses are crucial for learning retention, focus, and overall well-being during intense study sessions. Students often believe that the key to academic or exam success lies in pushing themselves to the limits to study for hours on end without taking a moment to rest. However, when students deprive themselves of breaks, they are less productive, retain less information and in turn risk burning out. Taking breaks while studying is not only beneficial but essential for deep learning and performance. Breaks are important for maintaining our cognitive capability and our overall mental health and well-being. In addition, breaks fuel our productivity. Cal Newport in his book Deep Work describes deep work as “activities performed in a state of distraction free concentration that push your cognitive capabilities to their limits”. When a student engages in deep work, or productive deep study, they need to also take productive deep breaks. The benefits of breaks Taking breaks while studying are important for the following reasons: Enhances focus and concentration Our brains cannot maintain focus and concentration for extended periods. Taking short breaks during study sessions allows our brains to recharge, making it easier to maintain focus, concentrate and absorb information effectively. Much like our phones, our brains also need to be re-charged. Improves learning retention Taking breaks between study sessions can improve our ability to retain information. Breaks give your brain the opportunity to process and consolidate new information, making it easier to recall later. For this reason, I always recommend taking a walk where possible after a study session. This will help you retain the information you just studied and learned. Maintains overall health and well-being Extended periods of intense studying can lead to burnout, fatigue and increased stress levels, ultimately undermining your academic or exam performance and health. By incorporating regular breaks into your study routine, you can keep burnout at bay and reduce your stress levels. Promotes sustainable study habits Taking breaks while studying encourages sustainable study habits that can be maintained over an extended period. By taking regular deep productive breaks, you can pace yourself more effectively and avoid the cycle of procrastination followed by cramming which inevitably leads to stress and overwhelm. What does a productive deep break look like? There is no specific rule of thumb when the optimal time is for a student to take a break while studying. We are all individual and we all have our own specific needs. If you are engaging in productive study, then you could take a 10-minute break after 50 minutes study or a five-minute break after 25 minutes study. When taking a break, you should not turn your attention to email, social media or distracting websites. The purpose of the productive deep break is to recharge your brain. By scrolling on your phone, you are not giving your brain the rest and recovery it needs and deserves. In fact, you are stimulating it, which is not what we want from a productive deep break. Try not to turn your attention to a complicated or stressful task. A short walk is a fantastic way to clear your head. It will help consolidate what you have just learned. If going for a walk is not available to you, getting out in the fresh air for 10 minutes is another great way for your brain to rest and recover. Sometimes a productive deep break can be as simple as sitting in silence with a cup of tea or coffee. Alternatively, you can listen to music or a podcast. Another example of a productive deep break is to do a five-minute meditation or five minutes of breathwork. As you are likely to have been sitting at a desk for a period of time, five minutes of stretching, yoga or physical exercise is great to boost your energy levels. Taking breaks should form part of your study routine. By prioritising rest and relaxation, you can cultivate healthier study habits, enhance your learning and ultimately achieve greater academic and exam success. Productive deep breaks ensure that you return to your study motivated with renewed concentration and a refreshed mind, ready to tackle complex problems and absorb information more efficiently. So, when you find yourself buried in books or glued to your computer screen, remember to allow yourself the time to rest, recharge and rejuvenate. Breaks fuel productivity. Edel Walsh is a student and exam coach. She supports her clients with their studies and exams using a holistic approach of focusing on academic success, personal development and looking after their well-being. For more information, check out www.edelwalsh.ie.