We are coming to the end of very difficult year for many accountants and tax practitioners. They have been under huge pressure since March in helping clients navigate the various Covid-19 support schemes, with the associated additional workload and deadlines, while managing the practical challenges presented by public health restrictions.
The rollout of the Covid-19 vaccine in early 2021 brings the promise of more stability for businesses and practitioners. However, the uncertain outcome of the Brexit negotiations, currently at the eleventh hour, may mean a disruptive 2021 is still ahead.
Finance Bill 2020
Finance Bill 2020 is expected to be signed into law before the end of 2020. Minister for Finance Paschal Donohoe proposed a number of amendments during the report stage, which included:
- amendments to the Covid Restrictions Support Scheme (CRSS), namely a ‘restart week’ payment, where businesses will be able to claim an extra week’s CRSS payment as an additional support with reopening costs
- additional time to submit a claim – a claim can be made within three weeks of the registration date, if that date is after the eight-week timeframe to claim
- warehousing for over-claims – provision is similar to that in place for the Temporary Wage Subsidy Scheme, where no future claims take place
- change to the effective date of the new transfer-pricing measures, from January 2021 to the date that a commencement order is signed by the minister – concerns had been raised with the minister about the scope of the bill’s measures and their impact on businesses’ ability to utilise cash within their groups. The minister has said that officials from Revenue and his department would examine and consider further the scope and application of the section prior to its commencement
- the inclusion of accelerated capital allowances of 50% per annum over two years for eligible farm safety equipment as well as adaptive equipment to assist farmers with disabilities
- changes to the stamp-duty provisions relating to the migration of shares and securities in Irish-registered companies from CREST to Euroclear Bank and to clarify that no stamp duty charge will arise on the migration of the shares
- confirmation that the standard rate of VAT will apply to all candles from 1 January 2022, instead of 1 January 2021
Covid Restrictions Support Scheme (CRSS)
At time of writing, 14,600 businesses have registered 16,700 premises with Revenue and €100m has been paid out in CRSS claims.
There is an additional seasonal support for businesses that cannot reopen in December, payable for a period of three weeks beginning on 21 December 2020. It will provide up to double the amount of the weekly CRSS support payment due (subject to the weekly maximum payment of €5,000).
Both Revenue and the Department of Finance recently issued reminders to businesses about the eight-week timeframe to submit claims for CRSS.
Revenue’s webinar on CRSS can be viewed on the Revenue website in the Popular Topics section.
Revenue’s Guidelines on CRSS have also been updated.
Temporary Wage Subsidy Scheme
The Temporary Wage Subsidy Scheme (TWSS) ended on 31 August and Revenue’s TWSS compliance check programme has almost concluded. Revenue is now dealing with non-responders, and can recoup the full amount of the TWSS paid where the claim was invalid and the subsidy was not paid to the employees.
Most employers have provided Revenue with details of the subsidies they paid out to employees, as required, under the first stage of the TWSS reconciliation process. This enables Revenue to calculate under- or overpayments of subsidies, but also to populate employee records and calculate the tax that the employees will owe. It is expected that Revenue will make the detailed reconciliation files available to employers in January.
Employers will have time to review and correct the data provided, with the reconciliation exercise expected to continue until the end of March 2021. Employers that qualify for the TWSS Debt Warehousing Scheme will be able to warehouse subsidy overpayments from Revenue for a 12-month period.
Wage support schemes
In November and December, Heather Humphreys, the Minister for Social Protection, announced changes to the Covid-19 Pandemic Unemployment Payment (PUP) in recognition of the relaxation of the public health restrictions in the lead-up to Christmas, that would allow some PUP recipients to return to work.
The PUP is open to new applicants until 31 March 2021, to provide certainty to individuals returning to work for the Christmas period. It was also confirmed that the Christmas bonus of an extra week’s payment would be paid to PUP recipients provided they have been in receipt of the payment (continuously or otherwise) for at least four months since March and were claiming the benefit for at least one day in the claim week ending Thursday 3 December 2020.
Self-employed individuals in receipt of the PUP who are trying to restart their business can now earn up to €960 over an eight-week period, while retaining their full payment entitlement. This is an increase from the €480 previously allowed over a four-week period. The intention of this measure is to allow a self-employed person to take on intermittent jobs or ‘one-off gigs’ without losing their payment entitlement.
Virtual seasonal parties
This year, the traditional staff Christmas party may move online following the government’s recommendation to limit social contacts over December. Revenue recently published guidance on the benefit in kind (BIK) treatment where an employer incurs costs in hosting a virtual seasonal party for their employees.
A BIK will not arise where an employer incurs reasonable costs in hosting a virtual seasonal party for their employees, which must be open to all employees. Reasonable cost would include costs typically incurred in hosting a face-to-face event and includes the cost of delivering or providing food or drink to employees before or during the event.
The provision of vouchers to enable staff to purchase food or drink are not included. Any such vouchers will be taxable unless covered by the Small Benefit Exemption. Revenue’s guidance on this matter is included on its Covid-19 information webpage.
Brexit preparations
Revenue has continued to advise businesses that have not fully prepared for Brexit to act immediately to avoid significant disruption in international trade from 1 January 2021. The critical preparation points for business are:
- Register for customs by obtaining an Economic Operators Registration and Identification (EORI) number.
- Have the facility to make customs declarations or have plans in place for a customs agent to do so.
- Look closely at and talk to the other key players in their supply chain.
- Know the origin and commodity code of the goods or products it is importing.
- Talk to the person who transports the goods or products to make sure they have the new information they need.
- Consider alternative routes to EU markets if you currently use the UK land bridge.
Revenue’s Brexit information hub contains detailed information on preparing for Brexit and customs duty.
The new customs declaration online system, the Automated Import System (AIS), will run in parallel with the Automated Entry Processing (AEP) declaration system for imports until 31 March 2021. This is to provide additional time for customs agents and businesses to transition to the AIS, recognising the very challenging environment for businesses, both in terms of Brexit and Covid-19.
While every effort has been made to ensure the accuracy of this information, no responsibility for loss or distress occasioned to any person acting or refraining from acting as a result of the material contained in this article can be accepted by the Irish Tax Institute, the designer, authors, contributors or publishers. Professional advice should always be sought for your particular circumstances before acting on any tax issue.
