Revenue has published an updated Tax and Duty Manual regarding the Sea Going Naval Personnel Tax Credit. The updated manual reflects the extension of the tax credit to 2024 and contains updated examples. 

Revenue has updated the Pensions Manual which deals with the discontinuance of schemes. Chapter 14 has been revised to add a new paragraph which contains contact details for Pensions Branch in Large Cases - High Wealth Individuals' Division. 

Revenue has updated the Tax and Duty Manual which provides guidance regarding the interpretation of the Corporation Tax Acts. The updated manual confirms Finance (No.2) Act 2023 amendments that:  extended the tax exemption under section 208 TCA 1997 to include professional services income of a charity;  inserted a definition of sport which includes both competitive and recreational sport into section 235 TCA 1997, which provides for a tax exemption for certain income of a relevant body established for the promotion of athletic or amateur games or sports. 

Revenue has updated the Tax and Duty Manual titled Securitisation Regulation: Notification of Investment (NOI) following the revision of the EU list of non-cooperative jurisdictions for tax purposes on 26 February 2024. The updated guidance reflects the change from the October 2023 list, and the current listing of relevant Annex II jurisdictions.  Recital 7 of Regulation (EU) 2021/557 explains that an investor in a Securitisation Special Purpose Entity (“SSPE”)1, established after 9 April 2021, in a jurisdiction listed in Annex II of the Council of the European Union’s list of non-cooperative jurisdictions, for the reason of operating a harmful tax regime, should notify the tax authority of the Member State in which it is resident for tax purposes. This information may be used to assess whether the investor derives a tax benefit from such an investment. 

At the most recent meeting of the TALC Direct and Capital Taxes Sub-Committee which took place last week, Revenue provided an update on various matters. The full minutes of this meeting will be available in due course on Revenue’s website, where minutes of all previous meetings are also available. Below we include a brief summary of some of the key issues discussed.  Guidelines to assist businesses to determine correct employment status classification  The group was informed that a significant update to the Tax and Duty manual on the employment status of workers will be published in the coming weeks. The guidance is being drafted following the recent Supreme Court decision in Karshan.   Requirement to file a stamp duty return under section 31C SDCA 1999 Section 31C is an anti-avoidance measure introduced in Finance Act 2017 on foot of the increase in the stamp duty rate from 2 percent to 6 percent (now 7.5 percent) applying to sales and transfers of non-residential property. Where section 31C SDCA 1999 applies, a rate of 7.5 percent of stamp duty arises on the transfer of shares. The general de minimis provision exempts shares of less than €1,000 from stamp duty. Revenue noted the relief in Schedule 1 is not an administrative relief. However where there is a sale of shares under section 31C, a return is required even where there is no tax to pay, even if the stamp duty arising is below €1,000.  Guidance for social media influencers and content creators  Revenue advised that it is in the process of preparing guidance addressing the taxation of social media influencers and content creators. At the meeting, Revenue advised that the taxation of people in these industries follows fundamental principles of taxation. Therefore, the extent to which an influencer is carrying on a trade and how that trade is taxed will always depend on the particular facts and circumstances of each case. Nevertheless, guidance will be welcome given this is a new area of industry.  Updated guidance on section 80 SDCA 1999  There was a detailed discussion on Revenue’s latest guidance on section 80 SDCA 1999 on reconstructions or amalgamations of companies. Section 1.1 in the TDM defines the meaning of “undertaking”. The prior version of the guidance suggested that the transfer of a 100 percent shareholding met the definition of “undertaking”. However, the latest amendment introduces an ‘active ownership’ test. Revenue noted the updated TDM was designed to be more detailed and useful. The ‘active ownership’ element was included to clarify Revenue’s position. Practitioners noted that a 100 percent shareholding is more likely to be managed at subsidiary level rather than at purchaser level. There was uncertainty as to what ‘active ownership’ means and so practitioners are to revert with examples for consideration.   Leasing guidance  Revenue confirmed that further guidance on the following sections is planned for release in the coming weeks:  Guidance on section 299 will be sent to TALC for review by the end of March Guidance on section 403 & 404 TCA 1997 will be sent to TALC for review by the end of April Guidance on section 76E TCA 1997 will be published sometime in April

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. Among the issues discussed, Revenue provided an update on the Debt Warehousing Scheme and outlined local property tax and vacant home tax compliance projects it has commenced. Revenue also reminded the group that the 2023 Form 11 has been updated for taxpayers wishing to claim the Mortgage Interest Tax Credit and/or the Rent Tax Credit. Minutes will be available in due course.  Debt Warehousing Scheme – 1 May 2024 deadline  Readers are reminded that taxpayers that have neither paid warehoused debt in full nor commenced the application process for a phased payment arrangement (PPA) by 1 May 2024 will be required to repay the debt is full and will be subject to interest at 10 percent, backdated to when the debt arose.  Revenue is urging taxpayers seeking a PPA to submit their payment proposal (via ROS) by 1 May 2024. Revenue will then work with the taxpayer to formulate a repayment plan. Once a PPA is approved, Revenue has stated that there is flexibility within the system to allow for the first payment to start after 1 May 2024.  Revenue noted that letters will issue to taxpayers in the DWS in March. Due to GDPR issues, these letters will not be copied to agents.   At end of January 2024 there was €1.7 billion debt warehoused by 57,000 taxpayers of which 30,000 owed less than €1,000 (most of whom owed less than €500). €1.4 billion is owed by 5,200 taxpayers, each owing in excess of €50,000. These taxpayers operate in the wholesale/retail, accommodation and food, construction and professional scientific sectors.  Refunds interest totalling €500,000 are due to be made to 475 taxpayers that paid interest of 3 percent.  Taxpayers with PPAs in progress that include the 3 percent interest rate will receive a priority ROS Inbox Notification. They will be required follow certain steps in ROS to trigger the 0 percent interest rate and must ensure they complete the ‘sign and submit’ section to accept the updated payment schedule.  Local Property Tax   Taxpayers were required to have their 2024 local property tax (LPT) liability payment arrangement in place by 10 January 2024. Single annual direct debits will be collected on 21 March 2024. Properties that became suitable for use as a dwelling after 1 November 2022 and on or before 1 November 2023 become liable to LPT for the first time in 2024, based on the market value of the property at 1 November 2021.  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 informed the group that compliance work is underway in 2024, focusing on property valuations project where there has been a decrease in valuation band in period 2 (2022-2025) from the original valuation band in period 1 (2013-2021).   In addition, Revenue also intends to review properties where taxpayers have claimed uninhabitable status, which may also have a vacant homes tax (VHT) impact if subsequently deemed habitable.  Vacant Homes Tax   Revenue intends writing to persons that own 20 or more properties this week, 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. Revenue intends to undertake a similar communications campaign when it moves on to contact the middle cohort of property owners with 2 to 19 properties at a later date.  Letters of No Objection for voluntary strike-off  Revenue is aware of delays experienced by taxpayers in obtaining a Letter of No Objection for a voluntary strike-off. While 82 percent of cases were responded to within 30 days in quarter 4 2023, Revenue is endeavouring to reduce the timeframe for issuing such letters. Revenue advises practitioners to use the Exceptional Contact channel in urgent cases where delays arise. Revenue recommends that applicants engage with Revenue as soon as possible and supply all the mandatory information at the beginning of the process. More details are available on revenue.ie  Form IT38  The capital acquisitions tax (CAT) return Form IT38 for the period 1 September 2023 to 31 August 2024 was made available in Revenue’s Return Preparation Facility (RPF) on 26 February 2024. Form IT38 for earlier periods will become available from 26 March 2024 but, in the meantime, they can be prepared using the ROS Offline application.  Employee Share Options  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 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 relevant tax on share options (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 Relevant Tax on Share Options (RTSO). The 2023 Form 11 is available to any taxpayer wishing to submit their 2023 income tax return. Revenue’s advice to taxpayers that will no longer be chargeable persons for income tax purposes for 2024, is to de-register for income tax via ROS once their 2023 income tax return has been submitted.  2023 Form 11 matters  Revenue has been informed of issues with the pre-population of Department of Social Protection information in the 2023 Form 11 and is continuing to investigate the matter. We will keep readers informed via Tax News.  The 2023 Form 11 has been updated for taxpayers wishing to claim the Mortgage Interest Tax Credit and/or the Rent Tax Credit. 

HMRC held its Annual Stakeholder Conference last week in London which the Institute was represented at. Under the conference’s theme of “Today, Tomorrow, Together”, attendees heard from HMRC’s Chief Executive Jim Harra about various ongoing challenges, “tough choices about resources” and how HMRC is forging ahead with plans to reduce traditional phone and post contact by moving more taxpayers to “self-serve online”. Mr Harra also reiterated that Making Tax Digital for income tax remains a key part of HMRC’s strategy, citing that 52 per cent of the Tax Gap comes from small businesses.    Four major challenges were highlighted as follows:  Pressures on HMRC services;  Accelerating the move to online self-serve;  Developing easy to use services; and  Simplification.  Deputy Chief Executive Angela MacDonald (speech from 26 minutes on) spoke in more detail about HMRC’s plans whilst recognising that the move to self-serve online is complicated because not every taxpayer is at the same starting point, however “status quo is not an option”. Generative Artificial Intelligence also got a mention and in particular the need to consider the ethics and risk management of this in tax administration work.  HMRC is expected to share details of the specific actions identified at the conference’s workshops and progress made in the coming weeks and months.  

On 22 February 2024, the Autumn Finance Bill, which was published after the 2023 Autumn Statement, completed its passage through the UK parliamentary process when it received Royal Assent and became Finance Act 2024.  Finance Act 2024 reflects key pieces of tax legislation announced at the Autumn Statement, including ‘full expensing’ for companies being made permanent, the merged R&D tax relief regime which will commence from 1 April 2024 and amendments to the various creative sector tax reliefs.   The “sunset” clause of April 2025 for shares issued to qualify for tax reliefs under the Enterprise Investment Scheme and Venture Capital Trust scheme has been extended to April 2035. Amendments have also been made to the cash basis which becomes compulsory for unincorporated businesses from 6 April 2024, unless the sole trade or partnership opts to apply the accruals basis. 

In just two days’ time on Wednesday 6 March, Chancellor Jeremy Hunt will deliver the Spring Budget 2024 at approximately 12.30. The Institute will be analysing the Budget’s tax measures and will issue a newsletter to members on Wednesday afternoon with the key tax highlights. This will be followed by more detailed analysis in Chartered Accountants Tax News next Monday 11 March.  As the Budget is taking place in an election year, there are rumours that some tax cuts may feature. However, as the UK is now in recession, questions remain over whether there is enough “fiscal headroom” to do so. 

This week HMRC has published the fuel advisory rates which took effect from 1 March 2024 and the notes of the most recent HMRC Guidance Strategy Forum are available on GOV.UK. HMRC has also sent details of an update to guidance for businesses applying to register for UK VAT because they make specified supplies of finance and as previously announced, from 26 February 2024, print and post claims for employment expenses and marriage allowance include a new nomination section which, if not completed correctly by a paid agent, will mean that any repayment will be made directly to the taxpayer.   VAT registration for businesses making specified supplies of finance  HMRC has confirmed that it has updated VAT Notice 700/1 which applies to certain businesses seeking to register for VAT in the UK where the business makes specified supplies of finance, insurance services or investment gold to customers in countries outside the UK.   The update confirms that the business must clearly state ‘SPECIFIED SUPPLIES’ in the free-text box when asked to describe business activities during the VAT registration application process.  Forms updated with new nomination section  As previously advised in Chartered Accountants Tax News, HMRC has updated the marriage allowance and employment expenses “print and post” forms for those not claiming online to include a new nomination section.   This means from 26 February 2024, paid agents making such repayment claims on behalf of a client must be registered with HMRC and have an Agent Services Account (“ASA”). The agent must also include their details in the nomination section of the claim form, including their Agent Reference Number which can be sourced from the ASA. If all of these details are not provided in the nomination section, the repayment will be made directly to the taxpayer.  For all claims received from 26 February 2024, HMRC will begin enforcing the use of updated versions of these forms.   The updated forms which contain the new nomination section are as follows:  form P87 - tax relief for employment expenses postal applications; and   form MATCF – apply for marriage allowance by post.   HMRC has advised that a form received after 26 February 2024 which is not in the new format will not be processed. It is expected that from the end of April 2024, HMRC will make a similar update to form R40 (refund of tax deducted from savings and investments).  

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 Office Borders bulletins are also available. HMRC has contacted us with another reminder that from 1 March 2024, the Import One Stop Shop opened for businesses in Northern Ireland and the newly established Windsor Framework Democratic Scrutiny Committee has begun hearing evidence. And finally, the Department of the Environment and Rural Affairs has sent an email setting out common errors found by sample health certificate checks undertaken since the first phase of the UK’s new border controls were implemented from 31 January.  Miscellaneous updated guidance etc.   Recently updated guidance, and publications relevant to EU exit are set out below:  Official customs seals and trader sealing;  Data Element 2/3 Documents and Other Reference Codes (National) of the Customs Declaration Service (CDS);  Moving qualifying goods from Northern Ireland to the rest of the UK;  Reference Documents for The Customs (Tariff Quotas) (EU Exit) Regulations 2020;  Reference Document for The Customs (Origin of Chargeable Goods) (EU Exit) Regulations 2020;  Reference document for authorised use: eligible goods and authorised uses;  Reference Document for The Customs Tariff (Establishment) (EU Exit) Regulations 2020;  Reference Documents for The Customs Tariff (Suspension of Import Duty Rates) (EU Exit) Regulations 2020;  Reference Documents for The Customs Tariff (Preferential Trade Arrangements) (EU Exit) Regulations 2020; and  Reference documents for The Customs (Reliefs from a Liability to Import Duty and Miscellaneous Amendments) (EU Exit) Regulations 2020. 

On Thursday 29 February the Ulster Society hosted a webinar in partnership with Arts & Business NI titled 'Connecting with Culture' In this webinar Mary Nagele, CEO and Maeve McKervey, Head of Business at Arts & Business NI discussed the ways in which they’ve helped local businesses to innovate through creative partnership with the Arts. They also shared more about their pioneering board-matching programme, which places up-and-coming leaders onto the boards of local arts organisations. A recording of this webinar is available to view, for free and on-demand, HERE A pdf copy of Mary and Maeve's slides is available HERE More details of the Financial Leaders on Arts Boards programme can be found HERE An A&BNI Business Member overview which outlines how A&BNI works with businesses is available HERE