Budget 24 continued the current Government’s policy of increasing the entry point for tax payers into the higher rate of tax with increases in the lower rate band and an increase in tax credits announced. There are big changes in Retirement Relief coming down the tracks in 2025 so anyone with business assets to transfer in the near future should consider if they are impacted or not.
Finance Bill 2022, which implements the tax changes announced on Budget Day, is currently making its way through the Oireachtas. Depending on your circumstances, measures contained in this Bill are likely to affect you and/or your business in the coming months. In addition, Revenue have announced changes to mileage and subsistence rates, an extension of the timeline for the debt warehousing scheme and an increase in the small benefit exemption.
See our newsletter in the following Link which summarises these recent developments:
Small businesses, sports clubs, community and voluntary organisations affected by flooding in Wexford on 25/26 December 2021 may be eligible for assistance under an Emergency Humanitarian Support Scheme.
The scheme, which is for businesses that have been unable to obtain flood insurance, will provide a payment for eligible businesses towards the costs of returning their premises to its pre-flood condition. This includes the replacement of flooring, fixtures and fittings and damaged stock where relevant. The scheme does not cover loss of earnings or loss of business goodwill.
The support is targeted at small businesses (up to 20 employees), sports clubs and community and voluntary organisations. Further information and application forms are available on www.redcross.ie. The closing date for receipt of applications is 7 February, 2022.
Recent changes to the Covid Restrictions Support Scheme (CRSS), the Employment Wage Subsidy Scheme (EWSS), and the Tax Debt Warehousing Scheme will help certain businesses affected by public health restrictions, explains AIDAN O’GORMAN.
Following the introduction of certain additional public health restrictions, the Government recently announced changes to three COVID-19 support schemes:
In December 2021, the Government introduced additional restrictions (including an 8pm closing time) for businesses in the hospitality and indoor entertainment sectors. Changes to the CRSS have been introduced to support these businesses.
Under the new measures (effective from 20 December 2021), businesses who would ordinarily operate evening and night time trading hours, will be considered to be significantly restricted from operating for the purposes of the CRSS and will be eligible for support under the scheme where they meet the eligibility conditions.
The scheme will also be available to certain charities and sporting bodies.
From 20 December 2021, companies, self-employed individuals, certain charities and approved sporting bodies and precedent partners on behalf of partnerships will be eligible to make a claim for an Advance Credit for Trading Expenses (ACTE) under the CRSS scheme provided that:
The eligibility criteria must be met by claimants in respect of each period for which an ACTE is claimed.
Claimants will need to assess their eligibility for each individual claim period separately. To do so, they will need to establish the start and end date of each claim period.
The claim period will commence on the latest of the following dates:
The claim period will end on the earliest of the following dates:
A qualifying person is entitled to an ACTE for each full week within a claim period. For established businesses (i.e. where a person commenced a business prior to 26 December 2019), the weekly amount will be calculated by reference to turnover for the business activity for the period from 1 January to 31 December 2019 (10% of average weekly turnover for 2019 up to €20,000 and 5% thereafter).
Businesses who have qualified for CRSS in respect of a period of restrictions will, in certain circumstances, be eligible to claim an additional week of support (ACTE) under the scheme (a “restart week”) where the business is recommenced on the lifting of Covid restrictions. The purpose of the additional week of support is to assist with the costs of recommencing after a period of restrictions.
To qualify for the restart week, the following conditions apply:
The amount of ACTE available to a business in the restart week will be calculated on the same basis as the normal claim, and therefore is subject to the weekly cap of €5,000 per week.
For the purposes of determining eligibility for the restart week, it is not necessary to consider the turnover of the business in the restart week. The business will still be eligible for an ACTE in the restart week even where the turnover of the business in that week is higher than 40% (25% prior to 20 December 2021) of the average weekly turnover of the business.
Note that once a business is no longer subject to Covid restrictions which require it to prohibit or significantly restrict customers from accessing its business premises, the business will not be eligible for CRSS for the periods it chooses not to open.
Under measures announced in Finance Act 2021, businesses that qualified for EWSS as at 31 December 2021 will continue to be supported until 30 April 2022.
A two-rate structure of €151.50 and €203 will apply from 1-28 February 2022. A flat rate subsidy of €100 will apply for March and April. The reduced rate of Employers’ PRSI will no longer apply for these two months.
Businesses who deregistered from the EWSS scheme in 2021 may be able to return to the scheme if they are impacted by the additional public health restrictions announced on 17 December 2021. Depending on when the business was established, the re-entry criteria are:
The business must also have a valid tax clearance certificate.
Where the business meets the criteria for re-entry for EWSS, it will receive support on a prospective basis for January 2022 onwards, and can remain in the scheme until the expiry date (30 April 2022).
Businesses that commence operations from 1 January 2022 onwards are not eligible for the EWSS.
Tax Debt Warehousing was introduced in 2020 to provide liquidity support for businesses suffering downturn due to the COVID-19 pandemic. The period where tax liabilities can be warehoused was subsequently extended to the end 2021 for all eligible taxpayers, with an interest free period during 2022, and 3% interest applying thereafter until the tax debt is repaid. Under changes announced in December 2021, the period where liabilities arising can be “warehoused” has been extended to the end of Q1 2022 for taxpayers eligible for COVID-19 support schemes.
Sheil Kinnear clients affected by changes to the Government’s COVID-19 support schemes can obtain further information and advice by contacting a member of our team.
This is an unprecedented time in our history. The COVID-19 pandemic has created a medical emergency which is naturally the primary focus and all of us at Sheil Kinnear hope that you and your families are keeping safe and well.
The pandemic is also however giving rise to serious difficulties for Irish business and, although we are all working remotely for the safety of our staff and their families, we assure you that all in Sheil Kinnear are available to advise and assist you in these difficult times.
Measures are being introduced by government, banks and other agencies daily to respond to the challenges resulting from this current crisis and we will endeavour to keep you up to date in relation to these.
Last Tuesday, the government announced an updated suite of social and economic measures to combat the spread of COVID-19 (Coronavirus) and to support those affected by it.
We summarise some of the measures available as updated on 24th March last: –
The government’s general information page for employers and employees is here
Employees of businesses that need to reduce hours or number of days worked can avail of the Department of Employment Affairs and Social Protection Short-time Work Support. For additional information click here.
This scheme allows employers to pay their employees during the current pandemic. Employers will be refunded up to 70% of an employee’s weekly wages – up to €410 for those earning up to €38,000 per annum (gross) and up to €350 per week for those earning between €38,000 and €76,000 gross. Employees earning more than €76,000 per annum are not eligible for the scheme.
Employers must self-declare to Revenue that they have experienced significant negative economic disruption due to COVID-19, with a minimum of 25% decline in turnover, and demonstrate an inability to pay normal wages and other outgoings, in accordance with guidance to be issued by Revenue.
Please note that employers availing of this scheme will be listed on the Revenue website.
Revenue have been very positive in their media presentations in relation to this scheme and have stated that having cash on deposit should not prevent a company from claiming. However, any company that is going to claim this benefit should build a file to demonstrate clearly how Covid 19 has impacted their business and why they are justified in making the claim.
In the initial stage of the scheme up to 20 April, Revenue will pay €410 per week for each employee but this will be recouped as the scheme moves on to the second phase. Employers are expected to keep account of this over payment!!!
Also, as it is currently presented, the subsidy will be taxed in the hands of the employee at a year-end review – this will likely prove very controversial. For additional information click here.
Applies to both Employees and the Self-employed –The COVID-19 Pandemic Unemployment Payment is a new support payment for the self-employed who have lost business and for employees who have lost employment as a result of the pandemic.
This support pays a flat rate of €350 per week and will be in place for twelve weeks (introduced initially as €203 per week for a six-week period).
For additional information click here.
Employees that have contracted the COVID-19 virus, or who are required medically to self-isolate, can claim an illness benefit €350 per week (increased from €305 announced initially). It will be paid for up to twelve weeks for those required to self-isolate, or for the duration of the person’s absence from work if they have been diagnosed with COVID-19. For additional information click here.
Revenue has provided the following updated advice which will further assist businesses that are experiencing trading difficulties caused by the impacts of COVID-19.
Businesses experiencing temporary cash flow difficulties should continue to send in tax returns on time.
The application of interest on late payments is suspended for January/February VAT and both February and March PAYE (Employers) liabilities.
All debt enforcement activity is suspended until further notice. Tax Clearance: current tax clearance status will remain in place for all businesses over the coming months.
Current tax clearance status will remain in place for all businesses over the coming months.
The RCT rate review scheduled to take place in March 2020 is suspended. This process assesses the current compliance position of each subcontractor in the eRCT system and determines their correct RCT deduction rate, i.e. 0%, 20% or 35%. As this process may result in a subcontractor’s RCT rate increasing due to changes in their compliance position, the review is suspended.
Subcontractors and agents are reminded that RCT rate reviews can be self-managed n ROS. Subcontractors can check if their rate should be lower and can then ‘self-review’ to get that lower deduction rate.
Critical pharmaceutical products and medicines will be given a Customs ‘green routing’ to facilitate uninterrupted importation and supply.
Businesses, other than SMEs, who are experiencing temporary cash flow or trading difficulties should contact the Collector-General’s office on (01) 7383663. Alternatively, these businesses can engage directly with their branch contacts in Revenue’s Large Corporates Division or Medium Enterprises Division.
Home owners that elected to avail of the single debit local property tax payment, due to be taken on 21st March, can now expect to see the money leaving their accounts on 21st May.
Local authority and the Government have agreed that rates should be deferred to those immediately affected by the pandemic. See details at the link below. We expect there to be movement on this in the coming weeks also as there is likely to be strong resistance to payment of rates for any time when businesses have been asked to close. For additional information click here.
All banks have announced that they will offer flexibility to their customers, and they may be able to provide payment holidays or emergency working capital facilities where required.
In addition, the following government facilities have been recommended as supports for working capital constraints:
This scheme supports loans from €10,000 up to €1m for periods up to 7 years. The Scheme is operated on behalf of the Department by the Strategic Banking Corporation of Ireland (SBCI) and applications can be made to participating lenders:
The €200m SBCI COVID-19 Working Capital Scheme for eligible businesses will be available within the next week. Maximum loan size will be €1.5 million (first €500,000 unsecured) and the maximum interest rate will be 4%. The SCBI is currently working towards bringing this scheme to market as soon as possible. The SBCI website will be updated on a regular basis to update on scheme launch.
A €200m Package for Enterprise Supports including a Rescue and Restructuring Scheme is available through Enterprise Ireland for vulnerable but viable firms that need to restructure or transform their business. Details of this support is being finalised and further updates will be available very soon.
Grants of €7,200 will be available to Enterprise Ireland and Údarás na Gaeltachta clients that want to access consultancy support to undertake immediate finance reviews. Application forms are available on the Enterprise Ireland website.
Microenterprises (turnover less than €2m) can access COVID-19 loans of up to €50,000 from MicroFinance Ireland. Loans are available at an interest rates between 6.8% and 7.8% and businesses can apply through their website or Local Enterprise Office.
Please continue to contact us as you would normally, either by telephone or email. Our landline number is operating as normal. We are here to assist you in any way possible as we all try to negotiate these uncertain times.
We hope that this crisis will pass soon and that the recovery will be swift. Stay safe and well.