Revenue has amended the Tax and Duty Manual which provides guidance on the prosecution and penalty programmes for VAT non-compliance. The guidance has been amended to remove references to Employer PAYE/PRSI/USC/LPT. The guidance now also includes the name and contact details of the Prosecutions Unit and information on how to make a penalty payment. 

Revenue has confirmed that the guidance in Failure to Co-Operate fully with a Revenue Compliance Intervention is no longer relevant as all of the information is now contained in the Code of Practice for Revenue Compliance Interventions. 

Revenue has updated the Tax and Duty Manual which provides guidance on the Dependent Relative Tax Credit. The updated manual clarifies that references to “maintaining at his or her own expense”, for the purposes of this tax credit, means financially maintaining the dependant relative by meeting their everyday living costs. Further information is available in eBrief No.234/24. 

Revenue has published a new Tax and Duty Manual regarding the new capital acquisition tax (CAT) reporting requirements relating to certain interest-free loans. Where a person is deemed to take a gift in respect of a loan, they may be required to report information in relation to the loan under section 46(4A) CATCA 2003.  The guidance contains examples of loan arrangements that fall within the definition of a 'specified loan' for the purposes of the legislation. Examples of circumstances where the reporting requirement arise and the due dates for filing the information in a Form IT38 return are also provided. 

The Central Statistics Office (CSO) has published the Quarterly National Accounts for the second quarter of 2024. Modified Domestic Demand fell by 0.5 percent relative to the previous quarter, but was up 1.5 percent on an annual basis. Continued volatility in the multinational sector was reflected by a decline in gross domestic product (GDP), down 1.0 percent in Q2 2024, and declining by 4.0 percent on an annual basis.   Commenting on the figures, Minister for Finance, Jack Chambers TD, said:  “While I recognise the fall in GDP in the second quarter of this year, GDP is not a useful measure in assessing the living standards of domestic residents, given the outsized role the multinational sector plays in our economy. The fall in GDP reflects the volatile nature of activity in the multinational sector.  In terms of the domestic economy, Modified Domestic Demand – my preferred metric of Ireland’s economic performance – declined on a quarterly basis, but recorded positive growth of 1.5 per cent on an annual basis.  I am pleased to see that consumer spending contributed positively to this growth, with consumption increasing by 1.3 per cent on an annual basis. The growth in consumer spending, alongside robust exchequer figures released yesterday and the strength of our labour market highlights the relatively healthy position of our domestic economy at present.  Looking ahead, inflation has now eased back significantly and is expected to remain on a stable trajectory over the short term. This will help boost real incomes which should further support growth in our domestic economy in the second half of the year.  My Department will publish updated macroeconomic and fiscal forecasts as part of the Budget early next month. Budget 2025 will ensure we continue to support families, workers and businesses while also investing in our public services and infrastructure to prepare us for the challenges that we face now and into the future” 

At the hosting of a naming and commissioning ceremonies for two new Naval Service vessels, Tánaiste and Minister for Defence, Micheál Martin TD, announced that the Sea-going Naval Personnel Tax Credit will be extended for a further five years. 

The Parliamentary Budget Office (PBO) has published a new report – An Overview of Taxes on Wealth in Ireland. The report provides an overview of taxes on wealth, including property and assets, in Ireland. It outlines existing taxes, their value to the Exchequer, and identifies relevant recommendations from the Commission on Taxation and Welfare.   As tax revenues in Ireland are highly concentrated on income and corporation tax receipts from a relatively small number of taxpayers, the report notes the need to consider broadening the tax base on a greater variety of sources. However, it cautions that as those who pay taxes on wealth are more likely to be high earners, this could lead to increased concentration of overall tax receipts from a relatively small proportion of taxpayers and must be considered within the context of the overall competitiveness of Ireland’s economy.   The report concludes that additional base-broadening measures should be considered by government to increase the number of taxpayers and further diversify revenue sources. 

The Department of Finance has published the August 2024 Fiscal Monitor which details an Exchequer surplus of €3.8 billion recorded to end-August 2024. While this was an increase of €4.1 billion on the same period last year, the comparison is skewed by the transfer of €4 billion to the National Surplus (Reserve Fund) in the first half of 2023. Tax revenues to end-August 2024 were €59.8 billion, an increase of €6.7 billion (12.6 percent) ahead of the same period last year.  Income tax, VAT, excise duties and, in particular, corporation tax, all recorded strong growth, with income tax receipts increasing on the prior period last year by €1.4 billion (6.9 percent) to €22.2 billion. On a year-to-date basis, VAT receipts are up €1.0 billion (7.5 percent) totalling €14.5 billion. Corporation tax receipts for the period totalled €16.3 billion, €3.6 billion (28.4 percent) on the same period last year.  Commenting on the figures, the Minister for Finance, Jack Chambers TD said:  “The tax figures published today are further evidence of the resilience of our economy.  The most notable feature of the August performance was the substantial increase in corporation tax receipts. While much of the increase in August relates to a technical timing factor, and offsets a decline earlier in the year, in the year-to-date this revenue stream is now well ahead of last year.  However, as I have cautioned previously, these receipts are clearly subject to exceptional volatility. Put simply, there is no guarantee that these revenue streams will remain at this level indefinitely, and it is crucial that we do not build permanent spending commitments on the back of these.  With the two new investment funds – the Future Ireland Fund and the Infrastructure, Climate and Nature Fund – we are setting aside a portion of windfall tax receipts to prepare for future fiscal challenges.  At the same time, Government will continue to calibrate a budgetary policy that balances the need to address the pressures of today and while, at the same time, maintaining our public finances on a sustainable trajectory over the medium-term.  Budget 2025, which Minister Donohoe and I will present to the Oireachtas on October 1st, will be framed on this basis.” 

In this week’s miscellaneous updates, HMRC has been writing to approved producers of alcoholic products in the UK to tell them about the new digital service due to be launched in March 2025 and how to get ready. The minutes from the most recent Joint VAT Consultative Committee and Guidance Strategy Forum meetings are available. We update you below on P87 (tax relief for employment expenses) processing and the National Audit Office (NAO) has published a report on tackling tax evasion in high street and online retail.  The fuel advisory rates applicable to company car users from 1 September 2024 have been published and the latest  schedule of HMRC live and recorded webinars for tax agents is also available for booking. Spaces are limited, so take a look now and save your place. And finally, check HMRC’s online services availability page for details of upcoming planned downtime and the online services affected.  P87 processing  HMRC is expected to provide a more detailed update on this issue later in September. However, we have been advised of the following in the meantime:  “HMRC has withheld the processing of some employment expense claims due to concerns about whether the relief claimed is due.   HMRC wants to make sure that customers get the tax repayments they are entitled to in as straightforward manner as possible. However, we also need to make sure that where we identify customers who are making errors, we take action to put things right for the customer and prevent similar mistakes from occurring in the future. This is why we are asking some customers to provide further evidence.  We will provide more information to customers impacted by this in due course.”   NAO report on tax evasion in high street and online retail  The NAO reported recently on tax evasion in high street and online retail in the context of HMRC estimating that tax evasion costs around £5 billion a year in lost revenue and is most prevalent among small businesses. The report examined whether HMRC, with other parts of government, is well-placed to tackle tax evasion in high street and online retail and also examined specific risk areas in more depth.   The report concluded that HMRC has had success in raising more tax from online retail by making online marketplaces liable for the VAT on sales by overseas retailers, which generated more than HMRC expected. However, significant weaknesses remain in government systems which tax evaders can easily exploit, most notably around company registrations and the ability of overseas businesses to falsely represent themselves as UK-established.  Tax evasion has been growing among small businesses, and HMRC has so far lacked an effective strategic response. Although there are good examples of localised campaigns targeting some retailers, HMRC missed earlier opportunities to tackle others, potentially allowing their market share to grow.  HMRC’s assessment of risks has also given too little emphasis to widely used methods of evasion such as sales suppression and “phoenixism”, despite identifying that they were large and potentially growing. This means HMRC may not prioritise the most effective compliance interventions. It has also not used some new powers to tackle tax evasion. While these remain untested, they will offer less deterrence.  Tackling tax evasion is not a straightforward task, and with finite resources HMRC must work with the rest of government and other stakeholders to find the most cost-effective way to reduce evasion.  HMRC’s overarching strategy to tackle non-compliance by preventing it from occurring is sensible, but it has not followed through on this principle sufficiently for tax evasion. Real opportunities exist for HMRC to work more systematically across government to reduce evasion.  The report also concluded that HMRC does not measure its overall performance in responding to tax evasion, although the examples highlighted in the report suggest high returns. The likelihood is that tighter controls and more compliance work could raise significant sums and would be cost-effective and improve value for money.   

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 as is the latest Brexit and Beyond newsletter from the Northern Ireland Assembly EU Affairs Team.  Miscellaneous updates to guidance and publications  Check if a business holds Authorised Economic Operator status,  Data Element 2/3 Documents and Other Reference Codes (National) of the Customs Declaration Service (CDS),  Get an individual guarantee to cover customs debts,  Delivery terms for Data Element 4/1 of the Customs Declaration Service,  Data Element 2/3: Documents and Other Reference Codes (Union) of the Customs Declaration Service,  External temporary storage facilities codes for Data Element 5/23 of the Customs Declaration Service,  Due diligence when making customs declarations. 

In every issue of The Bottom Line, we ask students for their thoughts on a particular topic. This month, we want to know: What do you hope to see in Budget 2025? Daragh Connolly  Gilroy Gannon I would like to see the VAT rate reduced for the hospitality sector from 13.5 percent to nine percent.  The expiration of the temporary nine percent VAT rate in September last year, which has coincided with high inflation rates, has forced businesses to increase prices considerably which, in turn, has priced many customers out of the market.  According to the Restaurant Association of Ireland (RAI), 577 restaurants across the country closed their doors between September 2023 and July 2024. The reduction in the VAT rate should help alleviate some of the pressure that many restaurants in Ireland are facing, as well as broadening the industry’s customer base.  Furthermore, the current cost of eating out is not attractive to tourists visiting Ireland and may be having a negative impact on Ireland's tourism sector as a whole.  James Smyth  KPMG The cost-of-living crisis continues to be a key issue across the country. With housing prices and rental demand at record highs, it’s crucial the budget addresses these issues sustainably.  One measure I would like to see is the reduction of VAT on construction materials to boost housing supply nationwide.  Additionally, I would like to see an increased drive for investment in cross-border and cross-country infrastructure to support those commuting from rural areas and the North, creating cost-effective and sustainable travel. As inflation begins to slow, it’s essential for the budget to include forward-looking and sustainable measures to safeguard against future challenges, like retaining reduced rates of VAT for retail and other businesses in order to bolster the SME market. This approach will address immediate concerns and ensure long-term stability and growth.  The budget’s focus on these areas could provide much-needed relief and hope for a more secure future. Collette O’Shea  Mazars Last year, the Government announced the establishment of a Tax Administration Liaison Committee subgroup dedicated to identifying opportunities to simplify and modernise the administration of business supports. I want to see the impact of this tax simplification in Budget 2025.  Tax legislation with convoluted rules and requirements hinder businesses ability to stay tax compliant or avail of tax reliefs. All businesses in Ireland, especially our domestic SMEs, should know exactly what reliefs they are entitled to claim and  how they can claim them.  Furthermore, it needs to be unambiguous what taxes businesses have to pay and  when to pay them. Simplification of tax legislation would lead to increased compliance and better tax revenue collection as businesses would be better placed to understand their tax reporting and payment obligations. Removing the needless complexities and ambiguities in Irish tax legislation would reduce the level of incorrect claims and errors that arise from complicated tax legislation.

The end of your training contract is a transitional period. Niall O’Keeffe, Senior Associate at Barden, outlines some key areas to focus on as the countdown towards your new career as a qualified accountant begins  For anyone approaching the end of a training contract and thinking about switching roles, there are a few things you should start to consider in these final weeks and months.  1. The CV The CV is an important document that can take you from aspiring applicant to sitting in front of the hiring manager. However, a weak CV can act as a blocker to this, so it is of the utmost importance to get it right. When creating a CV, people often just add a section to the top of their old CV from college. You’re a qualified professional now and your CV should reflect this. We usually find that it is better to start fresh rather than copy and paste some content on top of your old CV.  Your CV should be unique, detailed and specific to you. Avoid anything too generic.  For example, if you trained in audit and are looking for a financial accounting role in industry, avoid bullet points that are too audit-focused (“I was involved in audit planning, substantive procedures, controls testing, dealing with stakeholders, training my juniors….”). Instead, keep it specific and detailed. (“During this engagement, I was audit senior for a team of five and was responsible for testing the following technical areas: Revenue in line with IFRS 15, PPE, Deferred Liabilities etc.”) If you have trained in practice, we also recommend breaking your experience up by engagement. Pick three to five of your most prominent clients/projects and have four to five bullet points specific to that engagement.  If you have trained in industry, consider breaking your experience up by the various rotations or areas you got exposure to – financial reporting, tax, FP&A etc. This gives your CV a clean structure and makes it easier to digest.  2. Networking  Never underestimate the power of your network. A lot of people secure roles through the people they know, rather than agencies or LinkedIn.  But what exactly is networking and how can newly qualified accountants develop this skillset? Networking is defined, broadly speaking, as “the process of interacting with others to exchange information and develop professional or social contacts”. A well-connected professional network can greatly benefit your career growth and aid in advancement. Networking involves forming relationships with colleagues, managers and industry peers. Your network isn’t just about long-term relationships with friends and colleagues; it also includes more distant connections with business leaders and casual acquaintances, such as those met through clients. Even though these connections might not be as close, they can be extremely valuable, often offering information or links that can broaden your reach and learning opportunities.  Anyone whom you have built up even a slight rapport with, make sure to be proactive and add them on LinkedIn – whether that person is the office intern or the Finance Director of your main audit client.  As you approach the end of your training contract, make a conscious effort to build genuine connections in every interaction you have with colleagues and clients, so that you can lean into this network when looking for your next role. 3. LinkedIn  There’s no getting away from it. If you haven’t already, it’s time to embrace, build and promote your online presence, predominantly through LinkedIn.  As a newly qualified accountant, your LinkedIn profile is your online personal brand and should be thought of as a tool to catch the eye of in-house talent acquisition teams, agency recruiters and hiring managers alike. Here are a few tips to get started. Quick impression Recruiters scan LinkedIn profiles in 30 seconds. Use your summary title (the title under your name) and profile summary to fully communicate your skillset.  For example, instead of placing "Tax Senior" in your title, write “Tax Senior, Commerce & Industry | Chartered Accountant FAE” – the more keywords, the better. You have 120 characters so use them!  Complete and accurate information  Update all academic and career information to reflect your current qualifications and stage in practice. If you don’t show you’ve passed your FAEs, a recruiter might think you’re not qualified yet.  Ensure employment dates are correct and match your CV, to avoid any discrepancies. Your LinkedIn profile should mirror your CV. Public profile and personal touch Don’t be afraid to promote yourself – but be personal – think of your LinkedIn summary as the landing page of a website: you need to give people a reason to stay and read on.  Be mindful of what you share on LinkedIn. Avoid sensitive details like client names.  Use LinkedIn Now that you are set up, don’t be afraid to use LinkedIn!  Connect with colleagues and clients, and join groups such as professional accounting organisations, your university alumni, etc., and make sure to research interviewers’ backgrounds and career paths, which will look impressive in an interview. You can also switch your profile to “#OpenToWork” which can be set to only be seen by users with specific LinkedIn licences (i.e. recruiters and in-house talent acquisition teams). Finally, don’t forget to include a (professional) picture! But not a selfie. Never a selfie.