Revenue has updated the Tax and Duty Manual regarding accelerated capital allowances for farm safety equipment. The manual is updated in accordance with amendments introduced in Finance (No.2) Act 2023 whereby:   there is a requirement to publish details of the recipient above a revised threshold of State aid received of €10,000, and  the scheme is extended to 31 December 2026. 

We again remind you that the 2022/23 online self-assessment (“SA”) filing deadline is in nine days’ time on Wednesday 31 January 2024. This is also the deadline for paying any balancing payment of income tax and Class 4 National Insurance for 2022/23 and the first payment on account for 2023/24. HMRC has recently published guidance for postmasters affected by the Horizon scandal and is reminding crypto-asset owners to check if they need to file a 2022/23 SA return. And finally, we would like to hear from you about the impact of HMRC’s helpline restrictions on filing 2022/23 SA returns by the deadline. Recognising that many of you are busy filing 2022/23 SA returns, please get in touch with us when you get the opportunity to do so as we will be accepting feedback into the early weeks of February 2024.  Horizon Shortfall Scheme guidance  Advice from HMRC sets out that postmasters who have not received their top-up payment under the Horizon Shortfall Scheme (“HSS”) in enough time to file their 2022/23 SA return by the 31 January 2024 filing deadline will not be subject to interest and penalties. HMRC has also set up a specialist team to deal with tax queries from postmasters. The team can be contacted by telephone at 0300 322 9625 Monday to Friday 8am-6pm.   As part of the HSS, postmasters may have received compensation payments during 2022/23 which need to be reported on their SA return as these are taxable. However, to ensure that the amount received is not reduced by tax, postmasters may also be due or have already received an exempt from tax top-up payment. Many affected postmasters have not yet received this top up payment meaning they would be unfairly subject to income tax and Class 4 NIC in 2022/23. HMRC’s guidance confirms that those individuals will not be subject to late filing penalties and interest if they file and pay late as a result.   Penalties and interest will not be charged as HMRC has undertaken an advance exercise to identify those affected. However, if penalties or interest are inadvertently charged, the advice is to contact the specialist HMRC team mentioned earlier. Any postmaster who has received a HSS compensation payments in 2022/23 but who has not received a notice to file should also contact them.   Crypto asset owners  HMRC has issued a reminder to crypto asset users to check if they need to complete and file a SA return. With the use of crypto assets growing, HMRC is urging people to avoid potential penalties and check if they need to complete and file a 2022/23 SA return by 31 January 2024.   Anyone with crypto assets should declare any income or gains above the tax-free allowance on a SA return. Tax may be due when a person:   receives crypto assets from employment, if they’re held as part of a trade, or are involved in crypto-related activities that generate an income;   sells or exchanges crypto assets, including:  selling crypto assets for money;   exchanging one type of crypto asset for another;   using crypto assets to make purchases;  gifting crypto assets to another person; and  donating crypto assets to charity.  Visit GOV.UK to find out more information about how crypto assets are taxed. A voluntary disclosure can also be made in relation to unpaid tax on crypto asset activities.   

Last week, the Institute, under the auspices of the CCAB-I, responded to the public consultation on modernising Ireland’s administration of VAT – real-time digital reporting and electronic invoicing (e-invoicing). In our response, we noted that a modernised VAT system could simplify VAT administration for many businesses. However, it is important that the VAT system facilitates enterprises that have capacity constraints, particularly in terms of staff and digital resources.   The introduction of e-invoicing will undoubtedly present challenges for taxpayers regardless of their size. As such, along with continued engagement with a wide number of diverse stakeholders, it is our view that a sufficient lead-in time will be crucial to successfully implement VAT Modernisation in Ireland. Simplicity will also be a key to enable business operators to embrace this change as will the managing of costs and financial resources. To achieve this, thorough engagement by Revenue with businesses and key stakeholders will be imperative so that the needs of businesses are fully understood before a system is designed.   CCAB-I also called for the launch of fully resourced dedicated Revenue helplines to support businesses, practical workshops with key stakeholders, and a series of information webinars resourced with trained Revenue staff as well as a media campaign to raise awareness and support the change.  The CCAB-I will continue to work with Revenue on this project via the TALC Indirect Forum and TALC VAT Modernisation Subgroup and keep readers updated.  

Last week the Government published an update on progress made towards tax simplification which contained details of a package of measures one of which confirms that from April 2026, tax on benefits in kind will be paid through payroll, effectively ending the need to report on the annual P11D. More details are provided below on the changes announced. Mandating the payrolling of benefits in kind  From April 2026, the government will mandate the reporting and paying of Income Tax and Class 1A National Insurance Contributions on benefits in kind via payroll software. This measure aims to reduce the need for taxpayers to contact HMRC and to reduce the administrative burdens for employers and HMRC “by simplifying and digitising the process of reporting and paying tax on all employment benefits.”   HMRC will engage with stakeholders to discuss this and to inform design and delivery decisions. Draft legislation will be published later in the year as part of the usual tax legislation process. HMRC will also work with industry experts to produce guidance, which it will aim to make available in advance of 2026.  Further information will be published via the usual communication routes, such as through employer bulletins.  The timeline to move to mandating of payrolled benefits in kind is short and does not provide much time to ensure that software is developed and tested before this change comes into place in 2026 when Making Tax Digital for Income Tax also commences.   Relief for employment expenses  Each year, HMRC receives 1.1 million claims for tax relief from employees on their expenses. These claims are submitted through existing online services, or via digital or paper forms, resulting in some claims being manually processed.  To simplify the process, the government is designing a new, online service for employees to claim tax relief on all of their expenses in one place, meaning employees will get relief sooner. HMRC will provide further details later this year.  Amending the parents’ National Insurance Credit  As announced last year, the government will legislate to introduce a route for people to apply for National Insurance Credits for parents and carers for tax years where they have not claimed Child Benefit, to ensure that people do not miss out on their State Pension entitlement. The credit will add qualifying years of National Insurance where eligible which will support future State Pension eligibility.  Individuals will be able to claim this Credit from April 2026. The eligibility for the Credit will be closely based on Child Benefit eligibility criteria. Transitional arrangements will ensure those affected since 2013 are still able to claim.  Going forward, applications will be available for six years following the relevant tax year. The government will bring forward secondary legislation as soon as possible.  Alternative finance  The government has launched a consultation proposing change to the Capital Gains Tax (“CGT”) rules that apply to alternative finance arrangements.  The proposed changes seek to amend those rules so that where property is used as collateral for the purposes of raising finance, the CGT outcome is the same whether alternative finance or conventional finance is used. The consultation also asks whether there are any implications for capital allowances. The consultation is open to responses for 12 weeks and closes on 9 April 2024.  Transfer pricing, permanent establishment, and the diverted profits tax (“DPT”)  The government has published a summary of responses from the consultation undertaken last summer which proposed reforms to transfer pricing, permanent establishment, and the DPT. The aim of the consultation was to develop simpler, shorter legislation that is easier to understand and administer and provides greater certainty for both HMRC and taxpayers.  The government will continue to engage with stakeholders on the proposed approach set out in the summary of responses with a view to publishing draft legislation for consultation later in 2024. 

Revenue has informed us that it is to write to taxpayers who are currently registered for income tax or corporation tax and have not filed income tax or corporation tax returns for years up to and including 2022. The notice is a Level 1 Compliance Intervention in accordance with Revenue’s Compliance Intervention Framework. Revenue is reminding taxpayers that the non-filing of a required tax return can result in a more detailed review by Revenue and is a prosecutable offence.   A single ROS inbox notification will be sent to each agent, listing out their clients that were issued the notice, with a reminder to the agent for their clients to file outstanding returns.  

This week we look at the most recent Agent Update and HMRC’s latest News and Information Bulletin has been published. The VAT zero rate for energy savings materials is being extended from February 2024 and the latest HMRC performance reports have been published. And finally, updated guidance has been published on claiming for R&D tax relief.  Agent Update  Agent Update: issue 116 is available. Get the latest guidance and information including:-  the new National Insurance tool for employees;  the tax treatment of Horizon Shortfall Scheme compensation payments for postmasters  the 2022/23 Self-Assessment deadline;  changes to paternity leave and pay; and  a reminder on repayment agent registration.  VAT zero rate for energy savings materials   A recently published policy paper confirms that the VAT zero rate is to be extended to more energy saving materials (“ESMs”) and will take effect from 1 February 2024.  Installations of ESMs in residential accommodation currently benefit from a temporary VAT zero rate until 31 March 2027, after which they revert to the reduced rate of VAT at 5%.  This measure extends the relief to installations of ESMs in buildings used solely for relevant charitable purposes, such as village halls or similar recreational facilities for a local community.   It also expands the scope of the relief to the following technologies:-  electrical batteries that store electricity generated by certain ESMs and from the National Grid (the grid);  water-source heat pumps; and  diverters that enable excess electricity from certain ESMs to be used within a building in which it is generated rather than exported to the grid.  Certain preparatory groundworks that are necessary for the installation of ground- and water-source heat pumps will also qualify.  R&D tax relief  HMRC has published the following updated guidance on claiming R&D tax relief:-  Submit information to support your claim for R&D Corporation Tax reliefs; and  Tell HMRC that you’re planning to claim Research and Development (R&D) tax relief by making a claim notification. 

At a meeting of the TALC ERR subgroup last week, Revenue provided insight into one aspect that is causing some ERR submissions to be rejected. Files that have been converted to XML/JSON format before submission will be rejected if they contain blank data fields. Where employers are converting ERR files before submission, they must ensure that all data fields have content. A video on converting CSV files to JSON is available on Revenue’s website. Errors and rejections encountered by employers and agents should reported to Revenue via the National Employer Helpline (NEH).  In terms of penalties Revenue confirmed that none will apply for the period to the end of June 2024. From 1 July 2024, normal compliance rules will return.   As of last week, Revenue has reported that over 18,000 submissions with a value of €30 million have been made to mid-January. Revenue intends hosting additional information webinars on ERR which are expected to run until the end of February 2024.   Feedback on issues or problems you experience with the new ERR reporting regime can be emailed to the Institute and we will continue to engage with Revenue through the TALC forum. We will keep you up to date on developments in Tax News. 

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. And finally, this week, the House of Lords Windsor Framework Committee has received a response from the Government on the implications of EU exit for public procurement and the Committee has launched an inquiry on veterinary medicines  Miscellaneous updated guidance etc.   Recently updated guidance, and publications relevant to EU exit are set out below:-  Amend or cancel simplified import declarations;  Making a Final Supplementary Declaration;  Making a late supplementary declaration;  Data Element 2/3: Document and Other Reference Codes: Licence Types – Imports and Exports of the Customs Declaration Service (CDS);  Data Element 2/3: Documents and Other Reference Codes (Union) of the Customs Declaration Service;  Claim a waiver for duty on goods that you bring to Northern Ireland from Great Britain or countries outside the UK and EU;  Check if you can bring your goods into Northern Ireland from Great Britain without paying duty;  Report payments and view your allowance for non-customs state aid and customs duty waiver claims;  Commercial importers, certified traders and tax representatives — EU trade in duty paid excise goods (Excise Notice 204b);  CDS Declaration Completion Instructions for Imports;  The Trade Specialised Committee on Customs Cooperation and Rules of Origin;  Reference Documents for The Customs Tariff (Preferential Trade Arrangements) (EU Exit) Regulations 2020;  Reference document for authorised use: eligible goods and authorised uses;  Reference documents for The Customs (Reliefs from a Liability to Import Duty and Miscellaneous Amendments) (EU Exit) Regulations 2020;  Reference Documents for The Customs (Tariff Quotas) (EU Exit) Regulations 2020;  Notices made under s32A of the Taxation (Cross-border Trade) Act 2018;  Appendix 2: DE 1/11: Additional Procedure Codes of the Customs Declaration Service (CDS)  CHIEF: customs procedure codes; and  CDS Declaration Completion Instructions for Exports. 

Revenue has published a new Tax and Duty Manual to provide guidance to filers submitting the annual VAT Return of Trading Details (RTD). Information is provided on the completion of the return, amending an RTD, compliance measures and addresses specific queries raised about VAT RTD filing.  

In the complex landscape of corporate decision-making, understanding the differences between ESG and sustainability is crucial, writes Dan Byrne Corporate decision-making today involves a lot of talk about the environment, social and governance (ESG) and sustainability – precisely, how your company will fit into both movements. No one wants to discover they don’t know the difference between the two in the middle of a board meeting. While the two ideas share a lot of overlapping principles, they are different. It is essential to understand these difference because, once you sit down with colleagues to oversee core strategic decisions, you must have robust knowledge about the relevant topics. The difference between ESG and sustainability Sustainability is a principle dictating that, while we must look after the needs of our current society, it cannot be to the detriment of future generations. The concept of sustainability is so broad that it inevitably means different things in different boardrooms. The common thread in most organisations is that sustainability principles guide stakeholder expectations and, as a result, company strategy. ESG isn’t a principle; it’s a framework for measuring specific impacts and risks. It is a tool that can help investors and stakeholders to understand where their money is going. Why the confusion? There is a lot of overlap between ESG and sustainability, so organisations often file them under the same heading. In practice, companies embracing ESG will often commit to not harming the planet (environment), its people (social) or themselves (governance). While this should always be approached with the understanding that ESG is an investment metric and tool for analysing risk, it can be easy to generalise to the point that ESG is instead viewed as a sustainability metric or simply another name for sustainability itself. This is particularly true when companies focus on the “E” part of ESG. It’s popular across multiple industries and wins the backing of key stakeholder groups. An organisation’s focus on the environment creates a natural overlap with sustainability activities. Avoiding confusion in the future If you are in a board meeting and find yourself hovering around both topics, be sure not to hint that they’re the same with these tips: Remember that ESG is a collection of metrics; sustainability is a principle; If you’re talking about ESG, you will likely end up talking about numbers, quantities, reporting and investment opportunities. If you’re talking about sustainability, it’s expected more in the context of organisational goals, culture and policies; and Sustainability, in many respects, is the end goal. ESG is a pathway and a framework that will allow you to get there. Dan Byrne is a writer with the Corporate Governance Institute

As artificial intelligence and hybrid working reshape roles, accountants must begin to embrace IT, analytics and real-time data. Mark Lam explains why Bean counters, excel spreadsheets, sums and calculators – just some of the stereotypes and imagery that are associated with accountants. In 1955, General Electric began to use computers to perform accounting functions, and in 1978, VisiCalc, the first spreadsheet software allowing financial modelling, was developed. Since then, technology has continued to evolve and become more complex and central to the role of the accountant. A worker is only as good as the tools they are given to complete the tasks at hand and accountants are no different. Spreadsheet software itself revolutionised the profession, turning a “20-hour per week bookkeeping chore into a few minutes of data entry”. We have been seeing a more recent new shift in the profession in the past decade and this has been exacerbated in the years since the COVID-19 pandemic with the rise of hybrid working and artificial intelligence (AI). Technology has clearly advanced since the introduction of that first spreadsheet, with developments in computer systems and software connecting each function of the business to a single Enterprise Resource Planning (ERP) system. Just like in the 1970s, accountants are going to need more IT skills in order to stay competitive in the current market. New roles for accountants have emerged, such as the project accountant, financial system accountant, system accountant or data accountant. All are technically the same role, requiring high levels of IT systems and process knowledge­ and functioning as the intermediary between the IT and financial functions of businesses.   Future skill requirements As digital transformation is becoming more of a hot topic, companies are seeking continued improvements in efficiency combined with the need for real-time data causing businesses to increase data collection and connectivity between business processes. ERP systems providing the solutions to these needs offer just one part of the answer. Business leaders increasingly want accurate real-time data and information to aid decision-making. Accountants are required, not only to understand how the systems work, but also produce meaningful reports for bosses. Employees who understand how these systems work can build processes around them and extract and present the relevant information to help management leverage ERP systems to best effect. To stay ahead of the curve, businesses need to consider the future skill requirements of their financial teams, just as accountancy bodies will have to consider the curriculum provided to trainees to meet those needs. Businesses that take on trainees may start to consider taking on those who come from an IT background instead of accountancy, for example. Accountancy firms should be able to train accountants but can’t train computer programmers, after all. It may be more important to have new skills at the organisation’s disposal rather than more traditional accountancy functions. Accountants have always been more than just bean counters, but now this stereotype is becoming a distant memory. Mark Lam is H&W Group Financial Reporting Manager at Vhi and Chartered Accountants Ireland Technology Committee Member The Chartered Accountants Ireland Technology Conference will aim to inform members about this change, to allow us to bravely step into the world of digital transformation having learned from our peers and industry experts. Industry leaders such as Microsoft and Sage will present on the best practice around digital transformation at the conference and there will be case studies from fellow accountants detailing their digital transformation journey and lessons learned. Sign up now.

Real-Time PAYE has supported five years of streamlined tax compliance, but employers face expanding reporting demands in 2024. Olive O’Donoghue outlines key deadlines and requirements in 2024 Real-Time PAYE has been up and running for five years and many will agree that the real-time system has introduced tax compliance efficiencies for employers and employees alike. Employers still have significant reporting obligations that fall outside of the Real-Time PAYE, however. Further, the scope of real-time reporting is expanding with the introduction of Enhanced Reporting Requirements and there is an obligation for employers to operate PAYE on the exercise of stock options from the start of 2024. Below we outline key reporting deadlines and obligations employers need to put in this year’s calendar for timely action. 2023 Employer SARP return – February 2024 The deadline for employers to file a 2023 Employer SARP return is 23 February. The Special Assignee Relief Programme (SARP) provides personal income tax savings of up to 12 percent for employees who relocate to Ireland and meet certain conditions for up to five years. The return covers both local employees and expats and requires details of earnings and the value of the SARP deduction provided through payroll per employee. It also requires details of tax-free items, such as flights or school fees, which may not be readily available in the payroll data. Employers should factor in the time it takes to collate off-payroll information and information on employees who have relocated to other jurisdictions. It is essential to have a solid process for the timely collection of accurate information to avoid or minimise follow-up queries from Revenue. 2023 Employer Share Award Returns – March 2024 Employers are obligated to report details relating to various forms of share-based remuneration provided to employees in 2023 by 31 March this year. This includes all Revenue-approved schemes but also unapproved stock options, restricted stock units and various other direct share awards. Several different returns exist, so it is important for employers to report the right details on the right return. All matters relating to unapproved share options are reported in Form RSS1. However, the return with the widest application for employers is the Employer Share Award (ESA) return. The ESA is a catch-all return and covers all forms of share-based remuneration, including awards that are cash-settled and not specifically reportable on other share returns. Specific returns then exist for KEEP, an Approved Profit Share Scheme (APSS), and a save-as-you-earn (SAYE) scheme. Failure to comply with this mandatory filing obligation can result in a financial penalty for employers, so a timely review of share plans and cash-based incentive arrangements is crucial to determine if the employer has a reporting obligation. Enhanced Employer Reporting from 1 January 2024 2024 heralds the rollout of the Enhanced Reporting Requirements (ERR) which places an obligation on employers to file an additional electronic return with Revenue on or before any payment or reimbursement of in-scope reportable benefits to an employee. Reportable benefits include the remote working daily allowance of €3.20, certain categories of travel and subsistence payments, including vouched and unvouched payments, and benefits covered by the small benefits exemption. ERR will enable Revenue to undertake more targeted PAYE reviews into certain expenses and benefits provided to employees. Revenue has stated that it will not operate a compliance program or apply penalties for non-compliance with ERR until 30 June 2024. While employers must comply with ERR from 1 January 2024, they should use the respite period to the end of June to continue to review and align expense systems to establish a robust process for managing ERR. PAYE on stock options from 1 January 2024 Another significant change from the start of this year is the introduction of the requirement to operate PAYE when an employee exercises a stock option. This represents a significant shift from the previous tax collection system whereby income tax, USC and PRSI payable on stock options were settled by the employee directly with Revenue within 30 days of exercise. While the move to PAYE on the exercise of stock options will be welcomed by employees as it removes their obligation to settle their taxes, significant challenges may arise for employers who will be required to gather the necessary data to report the stock option gains via the payroll on a real-time basis. PAYE must be operated even where an option is exercised by a former employee, for example. This can give rise to practical challenges related to timing and the ability of the employer to collect taxes from the individual. Employers may also face challenges operating PAYE on stock options exercised by cross-border employees who worked in different countries throughout the vesting period. Employers will need to have access to accurate travel data to enable them to correctly determine the portion of any option gain that is taxable in Ireland. Olive O’Donoghue is a Tax Partner with KPMG’s People Services tax practice