At a glance: Finance (Covid-19 and Miscellaneous Provisions) Bill 2021

Finance (Covid-19 and Miscellaneous Provisions) Bill 2021

Employment Wage Subsidy Scheme

Section 2 of the Bill amends section 28B of the Emergency Measures in the Public Interest (Covid-19) (No.2) Act 2020 to provide for the:

• extension of the EWSS to 31 December 2021;
• retention of the current enhanced subsidy rates until 30 September 2021;
• retention of the 30% reduction in turnover or orders threshold; and
• widening of the reference period to assess eligibility for the scheme with effect from 1 July 2021.

Covid Restrictions Support Scheme (CRSS)

Sections 3 and 4 of the Bill amends section 484 and 485 TCA 1997 to provide for the extension of the specified period from 31 March 2021 to 30 September 2021.

Section 4 amends section 485 TCA 2997 to provide for enhanced restart week payments, the level of which depends on the date the business reopens:

• where the “restart week” occurs between 29 April 2021 to 1 June 2021, the restart payment will be an amount equal to two weeks at double the normal rate of CRSS (subject to a maximum weekly amount of €5,000);
• where the “restart week” occurs between 2 June 2021 to 31 December 2021, the restart payment will be an amount equal to three weeks at double the normal rate of CRSS (subject to a maximum weekly amount of €10,000); and
• in all other cases, the standard restart week payment will apply, which is one week at the standard rates of CRSS (subject to a maximum weekly amount of €5,000).

A business may qualify once for either the double restart week payment or triple restart week payment.

Business Resumption Support Scheme (BRSS)

Section 5 of the Bill provides for a new section, section 485A TCA 1997, which makes provision for the BRSS. Its key features are:

• The scheme is available to affected self-employed individuals and companies who carry on a trade or trading activities, the profits from which are chargeable to tax under Case I of Schedule D. It is also available to persons who carry on a trade in partnership, and any trading activity carried on by charities and sporting bodies.
• To qualify under the scheme, a business must be able to demonstrate that the turnover derived by the business during the defined specified period of 1 September 2020 to 31 August 2021 will be no more than 25% of the derived turnover when compared to a defined comparative reference period.
• Qualifying taxpayers will be able to make a claim for an amount equal to three times the amount as derived by 10% of their average weekly turnover during the reference period up to €20,000 and 5% thereafter, subject to a maximum payment amount of €15,000. Payments made under the scheme will be treated as an advance credit for trading expenses.
• For businesses established before 26 December 2019 the claim will be based on their actual average weekly turnover in the period commencing on 1 January 2019 or, if later, the date on which the person commenced its relevant business activity and ending on 31 December 2019.
• For businesses established on or after 26 December 2019, but before 10 March 2020, the claim will be based on their actual average weekly turnover in the period from the date that the relevant business activity commenced and ending on 15 March 2020.
• For businesses established on or after 10 March 2020, but before 26 August 2020, the claim will be based on their actual average weekly turnover derived during the period from the date that the relevant business activity commenced and ending on 31 August 2020.
• To make a claim under the scheme, a number of other conditions must be satisfied including that the person has an up-to-date tax clearance certificate, has complied with their VAT obligations, is not entitled to make a claim for the CRSS scheme in respect of any week that includes 1 September 2021 and that the business is actively carrying on its trade and has an intention to continue to do so. The person must register to claim on ROS and make a declaration that they satisfy the conditions to make a claim under this section.
• Provision is made for the publication of the name of claimants of BRSS on Revenue’s website.

Reduced rate of VAT for the hospitality sector

Section 6 of the Bill amends section 46 VATCA 2010 to extend the application of the 9% VAT rate on the supply of restaurant and catering services, guest and holiday accommodation and entertainment services such as admissions to cinemas, theatres, museums, fairgrounds, amusement park and sporting facilities, and also to hairdressing and the sale of certain printed matter such as brochures, maps and programmes until 31 August 2022.

Tax Debt Warehousing

EWSS Warehousing

Section 7 of the Bill provides for the warehousing of EWSS overpayments received by employers. This scheme will have three periods:

• Period 1 (the “Covid-19 restricted trading phase”) – 1 July 2020 (the beginning of the “qualifying period” for EWSS) until 31 December 2021;
• Period 2 (the “zero interest phase”) – no interest will be chargeable on warehoused EWSS debts from Period 1 from 1 January 2022 until 31 December 2022; and
• Period 3 (the “reduced interest phase) – interest will be charged at 3% per annum on Period 1 warehoused EWSS debts from 1 January 2023.

Where an employer fails to meet the conditions for debt warehousing the zero interest and reduced interest rates will no longer apply and the 8% rate will be re-imposed.

Extension of the Debt Warehousing Scheme for TWSS, VAT, Employer PAYE liabilities, income tax balancing payment for 2019, preliminary tax 2020 and balancing payment for 2020 and preliminary tax for 2021

Sections 8, 9, 10, 11 and 12 of the Bill give effect to the extension of the Debt Warehousing Scheme announced as part of the Economic Recovery Plan. The amendments provide for:

• Period 1 (the “COVID-19 restricted trading period”), which was due to end on the last day of the taxable period next following the taxable period in which the recommencement date falls, to now end on 31 December 2021;
• Period 2 (the “zero interest period”) to being on 1 January 2022 and end on 31 December 2022; and
• Period 3 (the “reduced interest period”) to now begin on 1 January 2023 and end when the COVID-19 deferred liabilities are discharged in full.

Stamp duty on acquisition of 10 or more residential properties

Section 13 gives statutory effect to the Financial Resolution that passed on 19 May 2021. This section inserts section 31E in the SDCA 1999, which imposes stamp duty at a rate of 10 percent on acquisitions, on or after 20 May 2021, of certain residential properties (houses and duplexes but not apartments) where an aggregate of 10 or more units is acquired during a rolling 12-month period.

Section 14 of the Bill introduces a provision that was not included in the Financial Resolution, and further amends the new section 31E SDCA 1999.

Under the new provision, the acquisition of residential properties that are leased to the housing authority for certain social housing purposes is exempt from the new 10% rate. These are leases under the ‘Mortgage to Rent’ scheme, whereby properties that are surrendered to the financial institution holding the mortgage are sold to a private company in tandem with an agreement to then lease the property to a local authority, who in turn leases it to the existing occupants so that they can continue to live in the property.

This exemption commences on the date of the passing of this Act.