Revenue has updated the Tax and Duty Manual which provides guidance regarding the adjustment of VAT deductible due to unpaid consideration by deleting content that has become obsolete following the introduction of section 62A VATCA 2010.   

Revenue has updated the Stamp Duty Manual which provides guidance on the exemption for reconstructions or amalgamations of companies under section 80 SDCA 1999. The manual has been amended in section 8 to clarify the circumstances in which relief under section 80 SDCA 1999 will be withdrawn. 

Certain intermediary financing companies, known as Qualifying Financing Companies (QFCs), are permitted to obtain a deduction for interest paid on certain external/third party loans under section 76E TCA 1997. Revenue has published a new Tax and Duty Manual to provide guidance on the deductibility of interest by QFCs . 

Revenue has updated the Tax and Duty Manual which provides guidelines for registration for income tax, corporation tax, relevant contracts tax, employers’ PAYE and certain other taxheads.   The amendments are:  Inclusion of information regarding Statement of Particulars (Section 2.2.), An outline of Defective Concrete Products Levy (Section 7.6), An outline of Stamp Duty Insurance Levy (Section 7.7), and An outline of Non-Resident Landlord Withholding Tax (Section 7.8).

Revenue has updated the Tax and Duty Manual which outlines the importance of context and wording when interpreting the words “control” and “interest” as they relate to companies.   The updated manual now includes a summary of the definition of “control” in section 11 TCA 1997 and provides additional detail regarding the definition of “control” in section 432 TCA 1997. Examples of various TCA provisions that apply the definitions of “control” from sections 11 and 432 TCA are also listed. 

Last week the Institute met with HMRC to discuss the 2024 Autumn Budget. We expressed concern and shared our views on the impact of a range of changes including increased employment costs as a result of the National Minimum Wage and employer National Insurance Contribution changes from April 2025. We also highlighted the damaging impact that the 2026 changes to key inheritance tax reliefs (agricultural property relief and business property relief) will have, particularly for Northern Ireland family-owned businesses and farms. The Institute recommended to HMRC that the Government consult more widely on these particular changes and we highligted the need for any anti-forestalling legislation to be fair. These changes should not impact retrospectively on lifetime gifts already made in the seven years prior to 6 April 2026. The changes need to be properly considered before implementation given the impact they will have on both indigenous businesses and investors in the UK. Other issues discussed were the fuel duty dilemma, tax simplification, the taxation of electric vehicles, the practical impact of the in-year capital gains tax rate changes, the extension in this Parliament of Making Tax Digital for income tax to the £20,000 - £30,000 turnover population and regulation of the UK tax agent market.  

At the Autumn Budget 2024, the Chancellor of the Exchequer confirmed that from 1 January 2025, all education, boarding, and vocational training provided for a charge by a private school in the UK will be subject to VAT at the standard rate of 20 per cent. Any fees paid from 29 July 2024 relating to the term starting in January 2025 and onwards will also be subject to VAT under anti-forestalling legislation.  HMRC has also sent a further email on this. The Government also published a response to its recent technical consultation. A Tax Information and Impacts note and the final draft legislation are also available on the same page. For schools that may be affected by these changes, HMRC has published the following additional material: Check when you need to register for VAT: schools can do this using a new interactive tool. Just click the green ‘Check now’ button, In order to use the online VAT registration system, schools will be asked for their Unique Taxpayer Reference (UTR). This can be found on any previous tax returns and other documents from HMRC, and HMRC has also updated guidance to reflect final policy design, including clarifications on nurseries, further education providers, and non-maintained special schools. In the event of any technical queries about registering for, charging, and remitting VAT, HMRC can be contacted by schools, their representative bodies, and tax advisors via the following email address: vatonprivateschoolfees@hmrc.gov.uk.   

In this week’s miscellaneous updates, the latest Agent Update is available as is the current schedule of HMRC Talking Points live and recorded webinars for tax agents which are available for booking. Spaces are limited, so take a look now and save your place. HMRC has published a new tax agent handbook and legislation impacting the abolition of the pension’s lifetime allowance has been laid. To assist alcohol producers in their preparations for the new digital service which is expected to launch in March 2025, HMRC has sent an email with more information and details of upcoming webinars. With less than 100 days to the 2023/24 self-assessment filing deadline, HMRC has sent a general email reminder and a more tailored email to agents. The rate of interest on late payments of tax has been reduced to 7.25 percent from today and claims for relief from certain employment expenses can now be made online. And finally, check HMRC’s online services availability page for details of planned downtime and the online services affected. Latest Agent Update Agent Update: issue 124 is available now. Get the latest guidance and information including: changes to the Agent Dedicated Line, updates to the Trust Registration Service guidance, less than 6 months left to fill in national insurance gaps to 2006, evidence required to claim PAYE (P87) employment expenses, and help protect workers from getting caught out by tax avoidance. New tax agent handbook HMRC has launched a new Tax Agent handbook which aims to provide information to help tax agents and advisers find guidance, use HMRC's services and contact HMRC. This is an outcome from a redesign of existing tax agent guidance. HMRC will continue to develop this further. Feedback on the new handbook and suggestions for it can be made using the short survey at the top of the main landing page. Pension’s lifetime allowance abolition Legislation was included in Finance (No.2) Act 2023 and Finance Act 2024 to abolish the pension’s lifetime allowance. Regulations have now been laid to implement “technical and consequential changes necessary to ensure the correct operation of the pensions tax regime following the abolition of the lifetime allowance”. Employment expenses tax relief process for uniforms, work clothing and tools Last month HMRC announced that claims for tax relief for employment expenses had to be made by post using form P87 and should be accompanied by supporting evidence. HMRC has now confirmed that claims can now be made online for flat rate expenses for uniforms, work clothing and tools.  

As previously advised, Revenue is hosting webinars on 26 and 27 November 2024 to assist taxpayers making submissions to Revenue Technical Services (RTS). The purpose of the webinars is to enhance the quality of submissions made to RTS.   RTS operates across the various Revenue divisions and handles complex technical issues on which practitioners and taxpayers may need clarity. The webinars will include the following topics:  An overview of RTS, When/How to make a submission to RTS, RTS Query acceptance criteria, Communicating with RTS, and A Q&A session. Tickets for these free webinars can be reserved via Eventbrite. 

In this week’s post EU exit corner, we bring you the latest guidance updates and publications relevant in the post EU exit environment. The most recent Trader Support Service bulletin is also available as is the latest Brexit and Beyond newsletter from the Northern Ireland Assembly EU Affairs team. This confirms that on 31 October, the Secretary of State for Northern Ireland gave notification of the start of the democratic consent process on the Windsor Framework (WF). HMRC has also published more information, including a factsheet, on the new processes which commence from 31 March 2025 for moving business-to-business (B2B) parcels from Great Britain to Northern Ireland. WF democratic consent process This was triggered at the end of October and provides an opportunity for the Northern Ireland Assembly to decide whether or not certain European Union (EU) laws will continue to apply in Northern Ireland. Articles 5-10 WF are specifically impacted. The Northern Ireland Assembly EU Affairs team has put together an explainer on this democratic consent mechanism, the vote by the Northern Ireland Assembly on Articles 5-10, which is to take place by the end of 2024. You can access it here in addition to links to other useful resources. Moving B2B parcels from Great Britain to Northern Ireland On 19 September, the Government confirmed that the new arrangements under the WF for parcels and freight movements that were due to come into effect from 30 September 2024 were being delayed and that businesses should be fully prepared for them to commence from 31 March 2025. HMRC has now published a factsheet setting out key information and actions to prepare for the new arrangements and has also sent a more detailed email on the changes. A webinar is being also being hosted on 21 November which is now open for registration. You can also visit GOV.UK to:  find out how to apply for  UK Internal Market Scheme authorisation and the requirements you will need to meet, and read the statutory guidance for businesses sending parcels to Northern Ireland. For support with general trader queries, call HMRC’s Customs and International Trade Helpline number 0300 322 9434 or textphone 0300 200 3719.  Miscellaneous guidance updates and publications Transit newsletters — HMRC updates, Data Element 2/3: Document and Other Reference Codes: Licence Types — Imports and Exports of the Customs Declaration Service (CDS), Duties and import VAT on gifts Known error workarounds for the Customs Declaration Service (CDS) External temporary storage facilities 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, Customs Declaration Service error codes, Data Element 2/3 Documents and Other Reference Codes (National) of the Customs Declaration Service (CDS), and Preparing for the new safety and security declaration requirements.

President Michael D. Higgins has signed the Finance Bill 2024, and it has accordingly become law. Finance Act 2024 can be found on the Oireachtas website. 

  Mergers and acquisitions often set out with grand strategies to gain competitive advantage but real success hinges on the ability to create value, writes Byron Smith While financial considerations are crucial, the best outcomes in mergers and acquisitions (M&As) often come from performing value identification due diligence, ensuring optimal resource utilisation post-deal, and leveraging the strengths each party brings to the table. The importance of synergies Successful M&As typically begin with a common goal, such as growth or market consolidation. The key to success lies in identifying and leveraging synergies, optimising operations and enhancing the market position of the combined entity. In Ireland, where the business environment includes both indigenous companies and multinational corporations (MNCs), creating value is essential for maintaining competitive advantage and achieving long-term success. While M&As are more common between indigenous companies and MNCs, we have effectively used value-creation methodologies to enable smaller enterprises to secure an equal "seat at the table" post-deal, despite their lower financial clout. Challenges in achieving synergies Synergies achieved through mergers and acquisitions can be operational, financial or strategic. Ideally, a successful outcome will include all three: Operational synergies involve cost savings, improved efficiencies and enhanced productivity. Financial synergies provide better access to capital, improved cash flow and tax benefits. Strategic synergies expand market reach, enhance product offerings and boost innovation.  In Ireland, leveraging these synergies in sectors like technology, pharmaceuticals and financial services can significantly enhance performance. However, achieving these synergies is challenging. Globally, our firm has found that around 70 percent of M&As fail to meet their anticipated value, underscoring the need for meticulous planning and execution. To fully realise the potential of an M&A, companies in Ireland must navigate regulatory frameworks, market dynamics and cultural fit, and identify inherent weaknesses early in the negotiation cycle. Innovation as a driver of value creation We have seen that synergies are not just about matching capabilities; some of the most successful M&As involve an innovative company with limited capital partnering with a capital-rich company with minimal R&D. Simply put – SMEs have the ideas and the MNCs have the financial resources. Such collaborations provide the necessary resources and capabilities for research and development, leading to new products, services and technologies. This innovation-driven approach helps companies stay ahead of the curve and maintain a competitive edge in the market. Effective governance and risk management Aligning governance and risk management in Irish businesses post-M&A is often challenging. The question of "What is my role now?" is typically a decision for the acquirer. The larger entity's risk and quality processes are often assumed to be superior. If not properly aligned, however, this assumption can lead to value erosion. Larger stakeholders frequently cite agility and innovation as reasons for carve-off and merger, or for acquiring a smaller, efficient and innovative bolt-on entity. Often, the acquired entity can feel disadvantaged by the deal experience. This can be potentially fatal, as key management may become disenchanted and line workers may feel their lifetime's work is being disregarded, often unwisely. It is crucial to evaluate the approaches and capabilities of both parties, use peer benchmarking and develop the best strategy without power plays. This type of analysis is essential for a successful value creation-driven M&A strategy. Peer benchmarking: looking outside to avoid mistakes Frequently, dealmakers overlook lessons from previous market M&A when approaching a deal. Therefore, peer benchmarking is a crucial value-creation tool. By comparing performance metrics with industry peers, companies can identify best practices, set realistic targets and uncover areas for improvement. This benchmarking goes beyond initial due diligence, setting early expectations for the financial, commercial and operational performance of the post-deal entity. It ensures that the newly formed, theoretically less lean, entity remains focused on becoming more efficient and competitive to achieve its value creation goals. Byron Smith is Associate Director of Strategy at KPMG