COVID-19 TAX MEA­SURES

Bray People - - NEWS - With Der­mot Byrne Der­mot Byrne is a tax con­sul­tant from the Vale of Clara and is in prac­tice in Northum­ber­land Av­enue, Dun Laoghaire, Co Dublin.

In or­der to en­cour­age consumer spend­ing for the next six months the main rate of VAT at 23 per­cent is re­duced to 21% from Septem­ber 1.

Loss Re­lief: Many busi­nesses are in se­ri­ous cash-flow dif­fi­culty due to no sales since mid­March. How­ever, these busi­nesses will be due to pay tax now on prof­its made last year. With a view to as­sist­ing them, the losses made in the cur­rent year can be car­ried back against the prof­its of 2019, e.g. a Bed & Break­fast busi­ness might have made a profit of €50,000 in 2019 but due to per­ma­nent over­heads and no sales has lost about €20,000 so far in 2020. A claim can now be made to set the €20,000 loss in 2020 against the €50,000 prof­its in 2019 so that tax is only due now on prof­its of €30,000.

For sole traders, the loss car­ry­back re­lief is lim­ited to €25,000 while there is no limit on the car­ry­back fig­ure for a com­pany.

Tax Debts: Where a busi­ness suf­fers trad­ing dif­fi­cul­ties then un­paid VAT and PAYE may be ‘parked’ or as the Rev­enue call it ‘ware­housed’. In ef­fect, the debts are frozen with no in­ter­est charge on the ar­rears as long as the Re­turns are main­tained up to date. When nor­mal trad­ing re­sumes then the busi­ness will have an­other 12 months be­fore the taxes have to be paid. An in­ter­est rate of 3 per­cent per an­num will ap­ply af­ter that date.

Tax Ar­rears: Where there are pre Covid-19 ar­rears, a tax­payer can come to an agree­ment with

Rev­enue to set­tle the debts with an In­stal­ment Ar­range­ment over five years with an In­ter­est Rate of 3 per­cent per an­num. The usual Rates are 8 per­cent or 10 per­cent per an­num.

Wages Sub­sidy: In or­der to re­tain staff in em­ploy­ment a lower rate of sub­sidy ap­plies since 1st Septem­ber. The sub­sidy is now €203 per week for work­ers earn­ing be­tween €203 and €1,462 per week and €151.50 where wages are below €203 per week. New work­ers and sea­sonal work­ers also are el­i­gi­ble but pro­pri­etary di­rec­tors are not.

Covid-19 Un­em­ploy­ment:

This pay­ment con­tin­ues for those laid off due to the Pan­demic but the amounts paid are re­duced. The top rate is now €300 per week where they earned more than €300 per week be­fore the lay­off. A rate of €250 per week will ap­ply to those who pre­vi­ously earned be­tween €200 and €300 per week. Any­body who was on less than €200 per week be­fore the lay­off will still get €203 per week.

Tax Clear­ance: This is needed for State and Lo­cal Au­thor­ity work. Where the busi­ness has ar­rears but has come to an agree­ment with Rev­enue on an In­stal­ment Ar­range­ment and con­tin­ues to file timely Tax Re­turns then a Tax Clear­ance Cer­tifi­cate will be avail­able. |

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