Revenue has informed us that notices will be issued to taxpayers who are currently registered for income tax or corporation tax and who have not filed income tax or corporation tax returns for years up to and including 2023. 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.   Agents will receive a single notification in their ROS inbox, listing their clients who have been issued the notice, together with a reminder for agents to file any outstanding returns for their clients.

Last week, the Institute, under the auspices of the CCAB-I, responded to the public consultation on the tax treatment of interest in Ireland. In our response, we stated the need for significant reform in order to remain competitive within the global race for talent and investment. As such, our most important proposal was our recommendation for a direction of travel which ends in a system which allows all commercial interest as a tax-deductible expense, whether trade-related or not, subject to the limitations described in the Interest Limitation Rule and the Anti-Hybrid Rules. The key policy rationale for such a move is the inherent protection afforded to the tax base in these rules. In our view, such a move presents an opportunity for a world-class and robust system to govern the taxation of interest in Ireland. The consultation looked at the taxation of both interest income and interest expenses, with every aspect of the Taxes Consolidation Act 1997 relevant to interest considered. The overall structure of the consultation was twenty-seven questions across the following broad headings: Taxation of Interest Income Interest Deductibility ATAD Interest Limitation Rule Anti-avoidance provisions and other restrictions Financial Services Transactions Withholding Tax Reporting Obligations Reforming Existing Interest Regime We made recommendations under each heading, however we have also been conscious of the need for caution in what is a complex and carefully balanced area of taxation. Our proposal for a system based around the Interest Limitation Rule and the Anti-Hybrid rules reflects the opportunity to choose a new way of taxing commercial interest which should not prejudice taxpayers and their existing arrangements. We hope that this consultation will form part of a wider and ongoing process of stakeholder engagement in the months and years ahead. As always, we will keep you updated via Tax News.

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. HMRC has also sent a guidance email about how to prepare for the next stage in the Windsor Framework which commences from 31 March for parcels and freight moving from Great Britain to Northern Ireland. A new WF guidance page was also launched last week which aims to provide information and resources to help businesses deal with any changes. Miscellaneous guidance updates and publications Notices made under the Taxation (Cross-border Trade) Act 2018, Notices under The Customs Transit Procedures (EU Exit) Regulations 2018, Search the register of customs agents and express operators, External temporary storage facilities codes for Data Element 5/23 of the Customs Declaration Service, Authorised Consignee Temporary Storage (ACTS) location codes for Data Element 5/23 of the Customs Declaration Service, Transit newsletters — HMRC updates, and Attending an inland border facility.

A series of Virtual Training to Advance Revenue Administration (VITARA) reference guides have been developed based on the content of the VITARA online modules. The recently published VITARA Reference Guide on The Audit Program focuses on how an audit program fits into the overall set of activities a tax administration undertakes to promote and enforce compliance with its tax laws.

The European Commission is taking action against 27 Member States for not communicating how they have incorporated eleven EU directives into national law. These directives cover areas such as the environment, financial stability, justice, taxation, and transport. The Commission has sent formal notices to these countries, giving them two months to respond and complete the transposition. If they fail to do so, the Commission may issue a reasoned opinion. The infringement procedures include failure to transport the Directive on the special VAT scheme for small enterprises and Ireland has been included on the list.

The International Monetary Fund (IMF) has published a working paper, Strengthening tax governance through legal design. This working paper develops an analytical framework which can be used to identify the key legal features that should be embedded in tax administration and tax procedure laws, to ensure a balance between tax administration powers and adequate taxpayer protections.

Following on from our story on Monday in which we highlighted the Institute’s plans to flag our concerns about the 2023/24 self-assessment online filing deadline to HMRC in the context of the recent storms, the Institute requested that HMRC take a pragmatic approach to this issue. We can now share the outcome of those discussions after receiving an update from HMRC. This confirms that whilst a blanket easement is not possible, HMRC will take a sympathetic approach towards those filing after the deadline on a case by case basis. The Institute therefore recommends that if a return is filed late because of the recent weather, the additional information box should be completed to outline the specific reason(s) why and claim reasonable excuse. HMRC will therefore cancel penalties where taxpayers can provide a reasonable excuse. The full update from HMRC is as follows: “ Thank you for raising the possible impacts of the recent severe weather across parts of Ireland and the UK on people and businesses in the run up to the Self Assessment deadline. Undoubtedly, this would have impacted some individuals, businesses and agents still trying to submit SA returns. Given the timing of these very recent events and the fact that areas most impacted are difficult to identify, we are not in a position to invoke a unilateral easement. We will however take a sympathetic approach towards those filing after the deadline on a case by case basis. We don’t want to collect penalties – our aim is to support taxpayers to get their tax right and avoid fines. We will cancel penalties where taxpayers can provide a reasonable excuse within 30 days of the penalty being issued, in which case no financial fine is levied. We will of course take into account the impact of adverse weather when it comes to such appeals. We will also take steps to ensure that teams reviewing forthcoming appeals are alert to the detail of the guidance and will apply it empathetically, appropriately and consistently. Please be reassured that HMRC will be delivering a fair, even-handed and consistent approach across everyone impacted in whatever capacity.” By way of reminder, those without a reasonable excuse will be issued with a penalty including: an initial £100 fixed penalty, which applies even if there is no tax to pay, or if the tax due is paid on time, after 3 months, additional daily penalties of £10 per day, up to a maximum of £900, after 6 months, a further penalty of 5 percent of the tax due or £300, whichever is greater, and after 12 months, another 5 percent or £300, whichever is greater. 31 January 2025 is also the due date for paying any remaining income tax and Class 4 national insurance contributions for 2023/24 and is also the first self-assessment payment on account deadline for 2024/25.

In Irish news, Revenue has issued two new Tax and Duty manuals which outline both the registration requirements and the operation of the residential zoned property tax, and new guidance has been published on the close company surcharge. In UK news, we issue a reminder that the 2023/24 online self-assessment filing deadline is Friday 31 January 2025, and the Institute responds to the HMRC consultation on new ways to tackle non- compliance. In International news, the US President has published a memorandum stating the Two-Pillar Solution has no force or effect in the US. Ireland 1. Revenue has published two new Tax and Duty manuals on the operation of residential zoned property tax (RZPT) and the registration obligations for this tax. 2.Read about the updates to the Tax and Duty manual on the close company surcharge. UK 3. Read about the 2023/24 online self -assessment filing deadline and the possible impact of Storm Éowyn. 4. The Institute recommends that HMRC should review its existing compliance powers before introducing any new powers. International 5. President Trump publishes a Memorandum on OECD Global Tax Deal stating that the Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy has no force or effect in the United States. Keep up to date with all the latest Irish, UK, and international tax developments through Chartered Accountants Ireland’s Tax Newsletter. Subscribe to the Tax News by updating your preferences in MyAccount. You can also read this week’s post EU exit corner here.  

On Tuesday, 18 March 2025, the European Commission and the European Parliament will co-host the third EU Tax Symposium. The event is to bring together finance ministers, politicians, policymakers, academics and others to discuss the future of EU tax systems under the theme Strengthening Competitiveness and Fairness to Build Prosperity. Registration is now open for the symposium which will take place in Brussels and will also be livestreamed.

Following his inauguration on 20 January 2025, the President of the United States of America, Donald Trump, has published the Presidential Actions. The publications include a Memorandum on the OECD Global Tax Deal which states that the OECD’s Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy has no force or effect in the United States.

Revenue has recently updated two other Tax and Duty Manuals. Details are set out below. The updated manuals are as follows: Electronic Relevant Contracts Tax system to include further links to additional information on the operation of this tax. The additional links relate to relevant operations, principal contractors and subcontractors. The Unpaid Remuneration manual to remove a reference to section 989 TCA 1997 and to update an example.

Revenue has updated the Tax and Duty Manual on the Controlled Foreign Company (CFC) rules to includes changes made in the Finance Act 2024 and Finance Act 2023. The changes are as follows: An amendment to the provision providing for the Irish defensive measures in respect of the CFC rules and to include the updated EU Code of Conduct list of non- cooperative jurisdictions for tax purposes Amendment to the rules for calculating ‘undistributed income’ of the CFC arising from the introduction of the new corporation tax exemption for certain foreign dividends Pillar 2 related amendments to the CFC rules for creditable tax and effective tax rate exemption.