MICHAEL O’LEARY

JPA Brenson Lawlor

Tax Partner JPA Brenson Lawlor

TAX ISSUES The main tax issues occupying struggling SME clients has been maintaining eligibility for the various Covid supports and managing this process with Revenue. In addition, ensuring that debt warehousing is availed of is also a priority. Dealing with the fallout of Brexit and the new processes and procedures has been slow, cumbersome and uncertain.

DEBT WAREHOUSING One of the unforeseen issues is that of PAYE on directors’ salaries. If PAYE has been warehoused and proprietary directors are filing their 2020 tax returns, a credit will not be available for the PAYE deducted not paid over to the Collector General. This creates a personal tax liability for a director. Businesses could pay their 2020 PAYE in priority to current warehoused tax liabilities (PAYE or VAT in respect of 2021) to avoid this problem, provided it is fully discharged by the individual tax return filing deadline of 17 November.

TAX REFORM We would be of the view that an effective employee share scheme be devised, which can be implemented by SMEs in a tax-efficient manner. This would involve providing certainty on the tax arising on the issue of shares and capital gains tax treatment on any disposal of shares. Retention and development of key employees is one of the biggest issues in order to grow a business, and to date, no share scheme has been introduced that can be availed of in a simple, tax-efficient manner.

Equally important would be the necessity for the introduction of a simplified R&D tax credit approval system for SMEs. An advance approval system is required, in particular, to assist small innovative companies.

REMOTE WORKING The uptake and use of Zoom and Teams has been an invaluable tool for businesses during the last 18 months. However, formal tax advice should only be provided in writing!

‘An advance approval system for the R&D tax credit is required’