Tax clearance
During the pandemic Revenue paused its regular reviews of the tax clearance status of businesses, and has now recommenced periodic tax clearance reviews on an incremental basis. It is expected that a return to normal pre-Covid-19 reviews for all taxpayers holding tax clearance will be completed by July 2022.
Taxpayers who require tax clearance, for example, for certain licences, to apply for certain grants or for public contracts should be aware of this recommenced activity so that they can ensure they retain their tax clearance status.
ROS Pay & File
The Income Tax ROS Pay & File deadline has been confirmed as Wednesday, 16 November 2022. A taxpayer must both file the 2021 Form 11 and pay 2022 preliminary tax and their income tax balance for 2021 via ROS to avail of this deadline.
This extended deadline also applies to CAT returns and payments made through ROS for gifts or inheritances with valuation dates in the year ended 31 August 2022.
VAT 9% rate
While most of the Covid-19 support schemes have now concluded, in recognition of the pronounced impact of the pandemic on certain sectors of the economy, the 9% rate of VAT for the tourism and hospitality sectors has been extended for a further six months until 28 February 2023.
Guidance on new pandemic-related schemes
In recent weeks, Revenue issued eBriefs for employers to clarify the tax treatment of payments made under two new pandemic-related schemes.
Revenue has recommenced periodic tax clearance reviews on an incremental basis
In January, the government announced a payment scheme for eligible frontline healthcare workers in recognition of their unique contribution during the Covid-19 pandemic. Revenue has confirmed in an eBrief that any payment made under this Pandemic Special Recognition Payment scheme is exempt from income tax, USC and PRSI, pending enactment of the Finance (Covid-19 and Miscellaneous Provisions) Bill 2022.
The exemption applies to a maximum of €1,000 per qualifying individual and only applies to payments made under the scheme. These can be made to specific categories of frontline healthcare workers, employed between 1 March 2020 and 30 June 2021, who were identified as working in Covid-19 exposed healthcare environments.
The second e-brief provides guidance on a new State-funded payment which has been introduced to address the changes made during the pandemic, when an employee’s right to seek a redundancy payment from their employer as a result of being laid off or placed on short time was paused, to reduce extra cost pressures on businesses and stop permanent job losses.
However, periods spent on lay-off in the last three years of an individual’s employment can impact on their statutory redundancy entitlements. In recognition of this situation, legislation has been introduced to ensure that employees who are made redundant and who were placed on lay-off due to the Covid-19 restrictions are eligible for a statutory redundancy payment, and are not disadvantaged in the calculation of their redundancy entitlements.
The Redundancy Payments (Amendment) Act 2022 provides for a Covid-19 Related Lay-Off Payment Scheme (CRLP). A one-off payment can be made to employees who:
- have been made redundant since 13 March 2020, or are made redundant before 31 January 2025, and
- have lost the opportunity to build reckonable service due to temporary lay-offs caused by the Covid-19 restrictions from 13 March 2020 to 31 January 2022.
The amount received by the employee will depend on the period they were placed on lay-off and is subject to a cap.
Payment under the Pandemic Special Recognition Payment scheme is exempt from income tax, USC and PRSI
Revenue has confirmed in an eBrief that the CRLP will be exempt from income tax and USC. This brings the payments into line with the tax treatment of statutory redundancy lump sum payments. Legislation will be enacted in due course to provide the tax exemption. In the meantime, the CRLP should be paid to employees without deduction of income tax, USC and PRSI.
The Department of Social Protection (DSP) will administer this new scheme and employers will apply for this payment on their behalf of eligible employees.
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 email 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.
