Tax UK

Last week, the Chancellor announced more details on the expected changes to the coronavirus job retention scheme (“CJRS”) and also announced that the flexibility element would begin from 1 July 2020, and not 1 August 2020 as announced a few weeks ago. The changes announced are as follows: - Part-time furloughing - from 1‌‌ July 2020, the scheme will be made more flexible to enable employers to bring previously furloughed employees back part time and still receive a grant for the time when they are not working Employer contributions - from 1‌‌ August 2020, employers will have to start contributing to the wage costs of paying their furloughed staff. This employer contribution will gradually increase in September and October; and The scheme will close to new entrants from 30‌‌ June. Part-time furloughing From 1‌‌ July 2020, businesses using the scheme will have the flexibility to bring previously furloughed employees back to work part time – with the Government continuing to pay 80 per cent of wages for any of their normal hours they do not work up until the end of August. This flexibility comes a month earlier than previously announced and is aimed at helping people get back to work. Employers will decide the hours and shift patterns their employees will work on their return, and will be responsible for paying their wages in full while working. This means that employees can work as much or as little as the business needs, with no minimum time that they must furlough staff for. Any working hours arrangement agreed between a business and their employee must cover at least one week and be confirmed to the employee in writing. When claiming the CJRS grant for furloughed hours, employers will need to report and claim for a minimum period of a week. They can choose to make claims for longer periods such as on monthly or two weekly cycles if preferred. Employers will be required to submit data on the usual hours an employee would be expected to work in a claim period and actual hours worked. If employees are unable to return to work, or employers do not have work for them to do, they can remain on furlough and the employer can continue to claim the grant for their full hours under the existing rules. Employer contributions From August, the CJRS grant provided through the scheme will be slowly tapered. The timeline for the next few months is as follows:-   in June and July, the Government will continue to pay 80 per cent of wages up to a cap of £2,500 in addition to employer National Insurance (ER NICs) and pension contributions for the hours the employee doesn’t work and is on furlough. Employers will have to pay employees in the usual way for the hours they work; in August, the Government will continue to pay 80 per cent of wages up to a cap of £2,500 but employers will pay ER NICs and pension contributions – for the average claim, this represents 5 per cent of the gross employment costs that they would have incurred if the employee had not been furloughed; in September, the Government will pay 70 per cent of wages up to a cap of £2,187.50 for the hours the employee does not work – employers will pay ER NICs, pension contributions and 10 per cent of wages to make up 80 per cent of the total up to a cap of £2,500; and in the final month of the scheme in October, the government will pay 60 per cent of wages up to a cap of £1,875 for the hours the employee does not work – employers will pay ER NICs, pension contributions and 20 per cent of wages to make up 80 per cent of the total up to a cap of £2,500 the cap on the furlough grant will be proportional to the hours not worked. According to the guidance provided by HMRC, many smaller employers have some or all of their ER NICs bill covered by the Employment Allowance so will not be significantly impacted by that part of the tapering of the Government contribution. Around a quarter of CJRS monthly claims relate to wages that are below the threshold where ER NICs and auto enrolment pension contributions are due, hence o no employer contribution will be required for these furloughed employees in August. Important dates It’s important to note that the scheme will close to new entrants from 30‌‌ June 2020. From this point onwards, employers will only be able to furlough employees that they have furloughed for a full three-week period prior to 30‌‌ June. This means that the final date by which an employer can furlough an employee for the first time will be 10‌‌ June in order that the current three-week furlough period be completed by 30‌‌ June. Employers will have until 31‌‌ July 2020 to make any claims in respect of the period to 30‌‌ June 2020. Guidance and support Further support for employers and agents on how to calculate claims with this extra flexibility will be available by next week, including webinars and detailed online guidance.  

Jun 02, 2020
Tax RoI

Updated instructions to Revenue staff dealing with claims by taxpayers under the European Convention On Human Rights, the European Convention On Human Rights Act 2003 or the Charter of Fundamental Rights of the European Union are new reflected in Tax and Duty Manual Part 38-04-13. A taxpayer may seek to invoke the European Convention On Human Rights, the European Convention On Human Rights Act 2003 or the Charter of Fundamental Rights of the European Union in the course of his or her dealings with Revenue. The claim may be about process or about the law.  The High Court, the Court of Appeal or the Supreme Court may make a declaration that a statutory provision or rule of law is incompatible with the State’s obligations under the European Convention On Human Rights.

Jun 02, 2020
Tax RoI

Revenue’s Tax and Duty Manual Part 15-01-14, Income Tax relief for Medical and/or Dental Insurance, has been updated to include details on the tax treatment of employer-provided policies by an authorised insurer/tied health insurance agent.  Tax and Duty Manual Part 15-01-14 should be read in conjunction with Covid-19 measures introduced by Revenue on the tax treatment of refunds of healthcare insurance premiums.

Jun 02, 2020
Tax RoI

The rates of expense relief for electricity, laundry and protective clothing, and telephone costs incurred by kidney patients have increased for 2019 and 2020.  Home dialysis kidney patients and chronic ambulatory peritoneal dialysis (CAPD) patients can claim relief for expenditure up to a certain rate on electricity, laundry and protective clothing and telephone costs. These rates are increased for 2019 and 2020 as reflected in the latest update to Revenue’s Tax and Duty Manual Part 15-01-12.

Jun 02, 2020
Tax RoI

Childminders caring for the children of Covid-19 essential workers in the child’s own home may still qualify for Childcare Services Relief according to updated Revenue guidance.  Childcare Services Relief is an income tax exemption available to individuals who provide childminding services in their own homes. Current HSE guidance provides that, as part of Covid-19 measures, childminding should only happen in the home of the child. Revenue’s updated Tax and Duty Manual, Part 07-01-29 says that a childminder providing care to children of essential workers in the home of the child will still qualify for Childcare Services Relief on a temporary basis

Jun 02, 2020
Tax RoI

Up to three thousand taxpayers may have given fraudsters access to bank and credit card details linked to their MyAccount records by responding to a fake text message purporting to be from Revenue.  Revenue confirmed that it has written to approximately 3,000 taxpayers advising them that, as a result of information provided by taxpayers as part of a text scam, personal details held in the user profile of their Revenue myAccount may have been accessed by the fraudsters.  The letters say that Revenue temporarily deactivated impacted taxpayers’ ‘myAccount’ access. Taxpayers impacted should contact their bank to cancel/change any accounts or credit cards that may have been provided to the fraudsters.  The Department of Employment Affairs and Social Protection should also be contracted if taxpayers have concerns that their PPSN may be compromised.

Jun 02, 2020
Tax RoI

A tracking system for MyEnquiries will be available from Monday, 15 June. The tracking system will allow accountants and tax agents to view the current status of an enquiry submitted via MyEnquiries. Chartered Accountants Ireland under the auspices of the CCAB-I is working with Revenue though the TALC forum to improve the MyEnquiries service.  The tracking system will allow accountants and tax agents to track the progress of an enquiry by viewing a new ‘Status’ column on the ‘Enquiries Record’ screen within MyEnquiries (accessed by logging into ROS/myAccount). The Enquiries record will take the following form: Status Description Pending Indicates the enquiry has been received by Revenue and will be routed into a queue for working. In Progress Indicates that the enquiry is in a queue to be processed. Completed Indicates that the enquiry has been completed by Revenue. Awaiting Feedback Indicates that Revenue has requested something from the customer and is waiting on a reply. Revenue Initiated Indicates the message was sent from Revenue.   The tracking system will also give information about which Revenue division the enquiry is being processed in.  Full details on the new tracking system are expected to issue from Revenue in the near future. 

Jun 02, 2020
Tax RoI

The Minister for Finance and Public Expenditure and Reform, Paschal Donohoe TD announced plans last Friday, 29 May, to make the Temporary Wage Subsidy Scheme (TWSS) available to employees returning to work following maternity or adoptive leave. As the subsidy payment was designed to apply to employees on the payroll for January and February 2020, employees returning to work following maternity or adoptive leave were not eligible for a TWSS payment, where they were not on the payroll on 29 February 2020, or where the employer was not paying wages to the employee who was on such leave in either January or February. Chartered Accountants Ireland, responding to feedback from our membership, raised this matter with senior Government officials. The changes announced on Friday 29 May 2020 mean that employers will receive appropriate subsidy payments in respect of affected employees from 12 June 2020 backdated to 26 March 2020 for employees retained on payroll by their employers. For employees who were ceased from payroll and in receipt of the Pandemic Unemployment Payment (PUP), no retrospection will apply as the individual was already in receipt of income support payments. However, employers may rehire these employees and the TWSS will be applied for these cases once their PUP claim has been ceased with the Department of Employment Affairs and Social Protection (DEASP). Further Revenue guidance and information for employers on this new TWSS development are expected to issue in the near future and such information will be reported in Chartered Accountants eNews and on our Covid-19 information hub. Take a look at the Minister’s press release and Revenue’s press release for information currently available on this development. 

Jun 02, 2020
Tax

According to a new report published by the OECD, tax administrations will play a critical role in planning the recovery from the impact of COVID-19. The report; Tax Administration Responses to COVID-19: Recovery Period Planning, highlights that early business restoration planning will help identify the main challenges and opportunities for both tax administrations and taxpayers.  The report sets out a number of considerations which tax administrations may wish to take into account in their planning for the recovery period. These are set under the following categories:  Business restoration governance Scenario planning Analysis and monitoring Business restoration planning Opening of offices Staff welfare Reputation management and communication Working methods Longer term implications for tax administration The report has been produced by the OECD Forum on Tax Administration (FTA), in co-operation with the Inter-American Center of Tax Administrations (CIAT) and the Intra-European Organisation of Tax Administrations (IOTA). Two other reference documents have also been produced by this group, one on measures to support taxpayers and one on business continuity considerations.  For more information read the report.  

Jun 02, 2020
Public Policy

In his regular column in the Business Post, as countries and businesses emerge from pandemic restrictions, Dr Brian Keegan analyses the patterns of effectiveness of the various government supports and potential problems for the future. In his column in the Irish Examiner, Dr Keegan discusses how the harshness of COVID-19 restrictions, do not have to be followed by harsh economic austerity.

Jun 02, 2020
Public Policy

The Economic and Social Research Institute (“ESRI”) has described the COVID-19 outbreak as a major shock to economic life which is unprecedented in modern times. In its Summer Quarterly Economic Commentary, the think tank urged the Government to stimulate activity in the economy. It is urging investment over cuts in the short term as this will reduce the 'scale and impact' of the crisis on the domestic economy over the next 18 months. It specifically urged the Government to invest in social housing and retrofitting homes, to catch up with the underlying demand for housing and to help Ireland reach its climate goals. Among the points the ESRI raised were: Unemployment this year to average 17 per cent Necessary investment, as well any extension to the pandemic unemployment payments, will increase the deficit, which it expects to be around €27 billion this year, although it recommends no immediate change to the pandemic unemployment payments Household savings may double during the pandemic, which could deliver a boost to the economy, once a recovery begins Supports for business will be difficult for government to get right with difficult choices being required Not all firms will survive   The ERSI described the best-middle case and worse case situations as follows: Situation % economy risks contracting by % unemployment risks reaching: Best-middle case 9-12 per cent 10-17 per cent Worst case:* up to 17 per cent 20 per cent *where a second surge of the virus emerges

Jun 02, 2020
Public Policy

On May 27, the European Commission put forward its proposal for a major recovery plan. The European Commission is proposing to create a new recovery instrument, Next Generation EU, embedded within a powerful, modern, and revamped long-term EU budget. The Commission is proposing to harness the full potential of the EU budget, combining Next Generation EU (€750 billion) and targeted reinforcements to the long-term EU budget for 2021–2027, to create €1.85 trillion. The Commission has also unveiled its adjusted Work Programme for 2020, which will prioritise the actions needed to propel Europe's recovery and resilience. European Commission President Ursula von der Leyen said: “The recovery plan turns the immense challenge we face into an opportunity, not only by supporting the recovery but also by investing in our future: the European Green Deal and digitalization will boost jobs and growth, the resilience of our societies and the health of our environment.” The money raised for Next Generation EU will be invested across three pillars: 1. Support to Member States with investments and reforms 2. Kick-starting the EU economy by incentivising private investments 3. Addressing the lessons of the crisis All of the money raised through Next Generation EU will be channelled through EU programmes in the revamped long-term EU budget: The European Green Deal as the EU's recovery strategy Strengthening the Single Market and adapting it to the digital age A fair and inclusive recovery for all   Visit the European Commission’s website for more details on the announcement to repair and prepare for the next generation. To read the Q&A on the proposal, visit their dedicated page.

Jun 02, 2020

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