Revenue has updated the Tax and Duty Manual which provides guidance on tax relief for charitable donations to approved bodies. The amendments include: Examples of payments to "approved bodies" which are not considered a relevant donation for the purposes of the Charitable Donation Scheme (paragraph 3); Educational institutions defined in section 53(1)(a) of the Higher Education Authority Act 2022 and the Royal Irish Academy are added to the list of approved bodies (paragraph 6); and The increase to €250,000 in the minimum annual income limit for audited financial accounts (paragraph 8).

Revenue’s Economic Research Unit is running a survey of medium sized tax agents to further inform its understanding of the issues facing tax agents in order to improve the quality of the service it provides. Agents selected for the survey will receive an email inviting them to complete the online survey before Monday 8 July 2024. Revenue has confirmed that it will not ask for financial or personal information in this, or in any other survey, or email. The survey is not in any way connected with an agent’s individual tax affairs. Further information is available in Revenue’s press release.

The Institute, under the auspices of the CCAB-I, made representations on behalf of members at last week’s meeting of the TALC Collections Sub-Committee. At the meeting, Revenue provided an update on the Debt Warehousing Scheme and the local property tax (LPT) and vacant home tax (VHT) compliance projects which it has commenced. Revenue confirmed that it is preparing updated guidance on 2023 income tax filing requirements for non-resident landlords and it has updated its system to allow agents to pay Relevant Tax on Share Options for pre-2024 liabilities. Debt Warehousing Scheme Revenue confirmed that if taxpayers have phased payment arrangements (PPAs) for both warehoused debt at 0 percent interest and other debt at the standard rate, PPA payments are automatically allocated against the oldest debt. Taxpayers cannot elect to allocate payments against debt with a higher interest rate if this did not precede the warehoused debt. However, it may be possible to reduce the interest charge if the taxpayer makes a payment outside the PPA towards current taxes.   Revenue explained that PPA compliance monitoring is fully automated once commenced. If there is a failed payment, the taxpayer is notified that Revenue will retry in 21 days. If there is a further failure, the taxpayer will lose the 0 percent interest rate and standard enforcement will commence.   Local Property Tax Revenue noted that some taxpayers who pay their LPT by deduction at source from pay or pension have failed to file an LPT return. Revenue advises that they file an LPT return as soon as possible in order to avoid issues at a later date. Revenue will write to this cohort of taxpayers in September to remind them to file the outstanding return; agents will not be copied. Vacant Homes Tax Revenue intends writing to persons that own 2 to 19 properties, asking them to declare whether the property is occupied or is vacant. Where vacant, and not already returned, a return and payment will be required to regularise their affairs. In September Revenue will issue 2024 reminder letters to those that previously declared a VHT liability. Non-resident Landlords A consequence of the commencement of the non-resident landlord withholding tax (NLWT) portal on 1 July 2023 is the requirement, in some cases, for two income tax returns for 2023. This arises in instances where a collecting agent was responsible for the non-resident landlord’s rental affairs for the period to 30 June 2023 then opted to utilise the NLWT portal from 1 July 2023 onwards. Revenue is preparing guidance to outline how a single return can be filed in such circumstances for 2023. Single filing will require the chargeable person (responsible for period 1 January 2023 to 30 June 2023) to cease registration and the non-resident landlord will file all rental details for the 2023 year. Letters will issue in the coming weeks to chargeable persons. If they want to retain registration, they must contact Revenue to do so. Revenue has confirmed that non-resident landlords should not include details of Irish rental income that is being returned by a chargeable person. Payment of RTSO As readers will be aware, from 1 January 2024, the taxation of a gain realised on the exercise, assignment, or release of share options no longer falls under individual self-assessment. Instead, employers are responsible for collecting income tax, USC, and PRSI from employees on share option gains and for remitting those taxes to Revenue as part of the payroll process. Revenue has updated its website for these changes and additional text has been added to screens to alert anyone trying to submit RTSO for 2024. The self-assessment regime continues to apply to gains arising on or before 31 December 2023, as does the obligation to register for RTSO. Revenue has confirmed that is has updated its system to allow an agent to make an RTSO payment for pre 1 January 2024 liabilities.

At the most recent meeting of the TALC Direct & Capital Taxes Sub-committee, Revenue announced that it is finally updating its practice surrounding the review of its Tax and Duty Manuals (TDMs), including a commitment to make historic TDMs available on its website. The plan over the summer months is to commence a two-stage process to enhance the availability of Revenue guidance in future. Stage one will see up to four previous versions of a manual made available on Revenue’s website. The TDM will bear a watermark conveying that the particular manual is “out of date” and so may not be relied upon. Revenue has committed to refreshing its website so that the four most recent previous versions of guidance are available (excluding the current version). Stage two will see a change to the annual TDM review process whereby the manual under review will remain available during the review process. The manual will bear a watermark conveying that the guidance is “out of date/under review” and so may not be relied upon. The Institute, under the auspices of the CCAB-I, raised this issue in April 2022 via the TALC Direct & Capital Taxes Sub-committee (see Item 3). In October of that year, a delegation of stakeholders met with Revenue to progress the matter further (see Item 3(c)). Although it has taken time to implement the recommendations arising from this earlier engagement, this change in practice will make a significant difference to practitioners and taxpayers in future. As such, we are grateful for the continued engagement of both Revenue and those representing CCAB-I through the TALC process as a key forum to raise pressure points arising on both sides of the tax administration divide.

Readers are aware of an ongoing issue where Revenue-initiated emails in MyEnquiries can be overlooked if the email has been sent to an unattended or inappropriate email address. In response to the Institute’s representations at the Tax Administration Liaison Committee (TALC), Revenue is now providing a facility in MyEnquiries for users to mark a designated email address as the priority email address for sending Revenue-initiated queries. This enables practice staff with permissions to access that email address to ensure correspondence is not overlooked. Revenue has provided instructions to assist practitioners in assigning a priority email address for MyEnquiries if they choose to do so. Revenue will issue a revised Tax and Duty Manual (37-00-36A) in due course.

As recommended by the NI Tax Committee in a letter last August to the Financial Secretary to the Treasury and subsequently in the Institute’s evidence submission to the House of Lords Finance Bill Sub-Committee, the draft Finance Bill clause which would have retrospectively applied the change to the geographical scope of agricultural property relief (“APR”) for Inheritance Tax (“IHT”) has been removed from the most recent Finance Act. From 6 April 2024, APR, and woodlands relief (“WR”) is only available in respect of UK assets.  In accordance with draft Clause 1(7)(b), this change would have applied “in relation to transfers of value made before 6 April 2024, for the purposes of any charge to tax, or to extra tax, which arises on or after that date”.   This would have meant that lifetime gifts in the seven years prior to 6 April 2024 would have been impacted by the removal of APR and WR for non-UK assets had the settlor died within seven years of the original lifetime gift or made a further lifetime gift into trust within seven years of one made in the seven-year window prior to 6 April 2024. The original APR and WR would longer be available resulting in a decrease in the available nil rate band and potentially a 40 per charge to IHT.  The Institute recommended that the draft Finance Bill clauses be rewritten in a way that removed any damaging retrospective impact, as this would have otherwise threatened the principle of legitimate expectation.   HMRC confirmed the change when it published an updated policy paper on the amended Finance Bill clauses. The change is now reflected in Section 11 of the Finance (No. 2) Act 2024 which received Royal Assent last month. 

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. 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 PAYE Settlement Agreement (“PSA”). The 2023/24 deadline to apply for a PAYE settlement agreement is 5 July 2024, with payments due by 22 October 2024 (19 October 2024 if not paying electronically).  HMRC is running a webinar later this week on 27 June on how to use the PAYE online service to submit forms P11D and P11D(b). The webinar will provide an overview of these forms, examine the benefits of submitting them online, and consider payrolling of expenses and benefits. However, it will not cover how to calculate the value of benefits. You can book onto the webinar here.  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 next month:  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. 

Our last update on HMRC services covered the announcement by the Financial Secretary to the Treasury before the dissolution of Parliament of an additional £51 million in funding for HMRC to help deal with the pressures on its phonelines and address declining service levels. Earlier this month, the Institute attended a bespoke meeting with HMRC during which HMRC advised that it is working to source additional resources using this £51 million.   This will take some time and we therefore remind you that HMRC previously advised that even if additional funding was received, quarters one and two of 2024/25 are likely to see a further decline in services. HMRC’s longer term strategy is still to move most taxpayers to digital services.   At the above bespoke meeting, the Institute and the other Professional Bodies discussed and highlighted a number of pain points in the UK tax system and in particular pointed out the lack of agent service for areas such as changes to tax codes.   The Institute will continue to monitor this issue and engage with HMRC and the new Government as it considers the way forward. We welcome your feedback at any time on HMRC services by email.  

Ahead of next month’s election, the Institute for Fiscal Studies recently published an article on reform of Inheritance Tax and an assessment of the previous government’s record on tax between 2010 and 2024. HMRC is currently conducting taxpayer education research and its latest schedule of live and recorded webinars for tax agents is available for booking. Spaces are limited, so take a look now and save your place. And finally, Belarus has unilaterally suspended its Double Tax Agreement with the UK, although the UK considers it to still be in force.  Institute for Fiscal Studies publications  The Institute for Fiscal Studies (“IFS”) has published an article on options to make inheritance tax (“IHT”) fairer which it says would also raise more revenue. In the article, the IFS notes that despite the highest rate being 40 percent, the availability of reliefs and exemptions means that the effective rate of IHT peaks at 25 percent for estates worth between £3 million and £7.5 million and declines to just 17 percent on estates worth £10 million or more.   The article also considers the potential impact of removing the special treatment of AIM shares, imposing a cap on agricultural and business property relief, and ending the tax-free passing-on of pension pots.  The IFS has also published an assessment of the government’s record on tax between 2010 and 2024. Not surprisingly, it notes that a common theme has been a move towards greater complexity. Since 2010, more than a dozen new taxes have been introduced and many existing taxes have been made more complicated. The IFS notes that, taken together, the changes have ‘made the tax system harder to understand and harder for taxpayers to navigate’.   HMRC taxpayer education research  HMRC has recently updated its guidance on genuine HMRC contact to flag that it is currently conducting a new research initiative. As a result, taxpayers may be contacted by HMRC or by People for Research with an invitation for them to take voluntarily participate in a focus group to understand how HMRC can improve education for taxpayers.   Belarus unilaterally suspends Double Taxation Agreement with the UK  Last month, HMRC confirmed in an update on GOV.UK that Belarus Council of Ministers has unilaterally suspended provisions of many of its Double Tax Agreements, including the 2017 UK-Belarus Double Taxation Convention. 27 countries have been impacted with provisions affected from 1 June 2024.   The Council Resolution has suspended provisions relating to dividends, interest, and capital gains. The same Resolution also introduces discriminatory taxes on dividends and other income in respect of businesses located in one of the 27 countries with effect from 1 April 2024. This means that Belarus is not honouring agreed limits on what it may tax at source and has placed other restrictions on the conduct of business by non-Belarusians in Belarus.  The UK-Belarus Convention does not permit this unilateral action. The UK Government views this action with utmost seriousness and has asked Belarus to reverse its action. It considers the treaty to remain in force and is continuing to comply with its terms. Next steps are being considered and more information will be provided in due course. 

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 and Cabinet Officer Borders bulletins are also available. The Windsor Framework Democratic Scrutiny Committee has published another report, this time on Regulation (EU) 2024/1252 which aims to establish a framework for ensuring a secure and sustainable supply of critical raw materials.  Windsor Framework Democratic Scrutiny Committee report  The most recent Brexit and Beyond Bulletin from the NI Assembly’s EU Affairs team features the Windsor Framework Democratic Scrutiny Committee's report on Regulation (EU) 2024/1252 that aims to establish a framework for ensuring a secure and sustainable supply of critical raw materials.  According to the Committee, most of the regulation does not fall within the scope of the Windsor Framework, although some articles of it do make technical amendments to a number of EU Regulations that do apply under it.   However, the Committee concluded that having considered its commissioned legal advice, the replacement EU act does not significantly differ, in whole or in part, from the content or scope of the regulations which it amends.  Miscellaneous updated guidance etc.   Recently updated guidance, and publications relevant to EU exit are set out below:  Submit a claim using the second-hand motor vehicle payment scheme if you do not have a UK business establishment;  Reference Document for The Customs (Northern Ireland: Repayment and Remission) (EU Exit) (Amendment) Regulations 2023;  Check if you can pay less duty if your goods are imported into authorised use;  Data Element 2/3: Documents and Other Reference Codes (Union) of the Customs ;Declaration Service;  Software developers providing entry summary declaration support;  Search the register of customs agents and fast parcel operators;  CDS Declaration Completion Instructions for Exports;  List of customs training providers;  Attending an inland border facility; and  External temporary storage facilities codes for Data Element 5/23 of the Customs Declaration Service. 

We have compiled the latest updates to various HMRC VAT publications, briefs, and guidance. Pay the VAT due on your One Stop Shop VAT Return;  Updates on VAT appeals;  Help with VAT apportionment of consideration — GfC2 Guidelines for Compliance;  Food products (VAT Notice 701/14);  VAT on movements of goods between Northern Ireland and the EU;  VAT Assessments and Error Correction;  Revenue and Customs Brief 7 (2024): VAT Treatment of Voluntary Carbon Credits;  VAT Assessments and Error Correction;  Appoint a tax representative if you are a non-established taxable person registering for VAT in the UK;  Cancelling your VAT registration (VAT Notice 700/11);  Group and divisional registration (VAT Notice 700/2);  Draft regulations: amendments to the VAT (Refund of Tax to Museums and Galleries) Order 2001;  VAT Flat Rate Scheme;  VAT Registration;  Forms for claiming a VAT refund if your business is registered in a country outside the UK;  Get your postponed import VAT statement; and  VAT Assessments and Error Correction. 

The Five Ways to Wellbeing was developed by the New Economics Foundation in 2008, where their project collated research from around the world on proven actions that can help us feel good. Wellbeing is a term that has gained popularity in recent years but in its simplest form it is a state of being comfortable, healthy, or happy. In a broader sense, it’s how satisfied you are with life, your sense of purpose, and how in control you feel. The framework is used globally in various ways to build more awareness on our collective wellbeing and help people take action to improve it. Each action can make a positive impact in our lives and most of us will engage with these activities without being aware of it. To get the most from the five steps, it is important to incorporate all of them on a daily basis. Why not try the five today? Connect Social connection is extremely important for our wellbeing. We are social animals, and our need for connection can help us feel happier, increase our feelings of security and safety and gives us a greater sense of belonging and purpose. Make time to connect with others each day. Nurture and invest in your relationships with loved ones.  This could be talking to someone rather than sending an email, speaking to someone new - possibly chatting to another in your local coffee shop or supermarket or taking time out to ask a loved one how they are truly feeling. Be Active Look for ways to be active each day. This doesn’t mean spending hours in the gym though; find an activity you can enjoy and try to incorporate it into your everyday life. Physical activity is intrinsically linked with lower rates of depression and anxiety. Why not take the stairs rather than the lift, go for a walk at lunch, or explore your local park – little changes can reap huge rewards. Take Notice Simply put, be in the moment. Being aware of the now can help you feel calmer and reduce stress. Take stock of what is around you and paying attention to the present – to your own thoughts, feelings and to the world around you. Keep Learning Be curious and ever learning! Continuing to learn throughout life can help boost our self-confidence and self-esteem. As adults, we can be time poor with other day-to-day responsibilities but simple activities such as learning a new recipe, getting around to that DIY project, doing a puzzle or setting yourself a new challenge can help achieve a higher level of wellbeing. Give Giving to others makes us feel good. When we give or help others, it activates parts of the brain associated with trust, social connection and pleasure. It provides a sense of meaning, improves our life satisfaction and mood, and can even reduce stress. Giving up your time to others can also help strengthen relationships or build new ones. Try to complete a small act of kindness today. Research into actions for improving happiness has shown that committing an act of kindness once a week over a six-week period is associated with an increase in wellbeing. And there you have it, the five ways to wellbeing! If you are struggling with your mental or emotional wellbeing, Thrive can help you on your journey to better emotional health. For wellbeing advice, contact the team by email at: thrive@charteredaccountants.ie or by phone: (+353) 86 0243294.