SHANE O’DONOVAN

Tax Partner PKF O'Connor, Leddy & Holmes

Shane O’Donovan says the deferral of deadlines such as CRO filing dates has resulted in some compliance work being pushed out. “The uncertainty in relation to a further lockdown and lack of clarity in relation to when it will be possible to return to more normal working practices, all add to the current challenges,” he adds.

WAGE SUBSIDIES The TWSS was certainly a very welcome scheme during the pandemic. However, the operation was unnecessarily complicated and has now left employees with tax liabilities. Many employees do not have the funds to meet this tax liability and similarly employers do not have the funds to assist employees due to reduced economic activity. As part of the Budget 2021 measures, the government should exempt the TWSS payments from Income Tax.

With so much uncertainty around a second wave and further lockdown restrictions, we have found that employers are finding it difficult to estimate expected turnover up to December 2020.

To date, uptake on the new EWSS has been low, and this relates to uncertainty around eligibility criteria rather than a bounce in economic activity. The new scheme does not deal effectively with situations where employers’ businesses have changed between 2019 and 2020.

The measures do not encourage businesses to attempt to grow over the next 6 months. For example, if a company’s turnover is currently around 30% down year-on-year, there is no incentive for the company to seek additional turnover as this would preclude the company from the EWSS. A sliding-scale system where a partial subsidy was received for companies that were less than 30% down, would alleviate this issue.

WAREHOUSING TAX DEBT To date we have found Revenue to be accommodating in relation to warehousing requests. If clients are struggling to meet their debts as they fall due, it is essential that they engage early with their advisors to consider the options available around debt warehousing and also other schemes available.

BUDGET 2021 Measures to support economic activity and support employers who have been affected by the Covid-19 restrictions would be most welcome. Some of the measures to consider would be:

Accelerated capital allowances on IT improvements to support businesses in the move towards remote working.

A double rent deduction for employers who have been restricted from operating from their premises.

Reduce CAT/CGT rates for one year to stimulate transactions and allow people effectively carry out succession planning, particularly in light of the current health risks.

lll‘Government should exempt TWSS payments from Income Tax’