FERGAL CAHILL

Managing Director Cahill Taxation Services

BUDGET 2010 While the government has recently introduced many welcome tax measures, we would recommend some additional measures to boost the economy as follows:

Government should consider either reducing the rate of employers’ PRSI or introducing a PRSI exemption for new employees taken on who had availed of the PUP or other state-support schemes.

Changes to the work environment will mean that employers have to provide employees with additional IT equipment to enable them to work from home. There should be accelerated capital allowances on such equipment, and the same allowances for expenditure incurred on premises fit-out and modifications as a result of Covid-19 restrictions.

The six-month reduction in the VAT rate from 23% to 21% from September 2020 should be made permanent or at least extended, and the rate of VAT for the tourism and hospitality sector should be reduced to

lll5% for the remainder of 2020, similar to the UK.

With businesses struggling as a result of Covid-19, there is less cash available to pay any tax costs arising on the transfer of a business to the next generation. We have observed cases where the increase in stamp duty on commercial property in recent years, from 2% in 2017 to 7.5% in 2019, is delaying the transition of ownership of businesses from one generation to the next. There is little point in providing Retirement Relief and Business Property Relief as incentives, if the stamp-duty regime is not favourable.

CORPORATION TAX-LOSS RELIEF A best estimate and reasonable approach is required when making an ‘interim claim’ for this relief, which could prove challenging for some companies. However, to assist with such challenges, it is possible to amend interim claims both upwards and downwards.

Typically, interest is applied by Revenue to an underpayment of tax from the date of the underpayment to the date the balance of tax is paid. However, where an excess claim is made and the claim is revised without delay, interest is only applied from the date the claim is reduced to the date the additional

ltax is paid, provided the underpayment was not deliberate or careless.

This interest concession is welcome, due to the inherent uncertainty around making an interim claim. Coupled with the facility to make the claim online by amending the prior period Form CT1 on ROS, this should increase the uptake of the relief.