Latest Tax news

Further to the update in eNews last week regarding the CRO filing deadlines, the CRO issued the following statement on Friday last 23 October: The Registrar is aware of pressures that a small number of Companies face in meeting the deadline of 31 October and has announced that all elements of the annual return will be accepted if delivered by the date on the signature page (available when Form B1 is submitted online). If you are unsure about your annual return deadline contact eb1@dbei.gov.ie The Institute sought clarification from the CRO on this statement and they have today confirmed the following: If the company is due to file, or has already filed a B1 but not yet sent the signature page, they can file a new B1 up to 31/10/2020 and will then have 28 days from submission date to upload financial statement and deliver the signed signature page. If the B1 has recently been submitted and the date on the signature page is after 31/10/2020 then that date is the correct deadline. Therefore, if a B1 is filed electronically on Friday 30 October 2020, the submission date for the signed B1 will be 28 days later, i.e. 27 November 2020. If all elements of the annual return  are submitted by that date then it will be deemed to have been filed on time. Members are of course encouraged to file as normal if at all possible. If you are unsure about your annual return deadline or have any other queries please contact eb1@dbei.gov.ie 

Revenue updated the TDM Taxation of Guardian Payments – Contributory and Non-Contributory – to reflect changes made by section 13 of the Finance Act 2018. The TDM Accounting for Mineral Oil has been updated to reflect changes to excise duty rates announced as part of Budget 2021 and for the revised definition of a propellant. The Guidance Manual on Comprehensive Guarantee has also been updated with additional information on release of the guarantee. Revenue e-Brief No.195/20 confirmed that the TDM  Part 05-05-17 – Taxation of Guardian’s Payments – Contributory and Non-Contributory - has been updated to reflect the changes made by Section 13 of the Finance Act 2018 to exempt certain social welfare payments from the charge to tax, including Guardian’s payment (contributory and non-contributory).Revenue e-Brief No.194/20 confirmed that the TDM Accounting for Mineral Oil has been updated to reflect changes to the Excise Duty Rates announced as part of  Budget 2021. The manual has also been updated to reflect the revised definition of a propellant which was amended in Finance Act 2019 and came into effect on 1 January 2020.Revenue e-Brief No.192/ 20 confirmed that the Guidance Manual on Comprehensive Guarantee has been updated at section 5 with additional information on release of the guarantee.  Appendix 3 - Deposit Note - has been removed also, as it is no longer required.

The VRT Manual Section 1 has been re-structured into four manuals, to improve ease of access for customers and Revenue staff. Revenue e-brief No.191/20 confirmed the re-structuring of the VRT Manual Section 1 into the four manuals below:VRT Manual 1 – Procedures and ProcessesVRT Manual 1A – Classification and Tax CategoriesVRT Manual 1B – Administration and Payments by Authorised TradersVRT Manual 1C – ConversionsOther updates to the manuals include:Information on the new NOx charge as introduced on 1 January 2020 (Manual 1 – para. 3.4.3 and Manual 1A – para. 4.2)Amendments to the definition of Suitably Qualified Individuals (Manual 1C – para. 6.2).

Revenue confirmed that the pay and file dates for the Form 1, which relates to an income tax charge on certain funds, are as per the Revenue website (being the 10 December 2020). Form 1 is part of the suite of returns covered by the Pay and File deadline, which has been extended to 10 December 2020. Accordingly, the return filing date for both the Form 1 and Form 1 IREF has been extended to the 10 December 2020.

Revenue withdrew the ‘Online Banking’ payment option on the Form 11 ROS payment screen on 12 October 2020. Taxpayers who used this option in the last 12 months should have received a notification of the change through their ROS inbox. A phone campaign was also conducted to advised frequent payers using this option of alternative online methods. Payments received via this payment option are effectively Electronic Funds Transfers (EFT) payments. Revenue confirmed the rational for this change, as follows: The payments are not straight through payments for Revenue in the same way as Direct Debit or ROS Debit instructions.  All EFT payments require manual intervention on receipt to identify the relevant customer and payment details.  In peak times, and particularly for Pay and File, there can be delays in allocating the payment to the customer record on a timely basis.   To allocate the payment correctly, there is a dependency on the payment narrative provided by the taxpayer when making the payment.  The narrative must include the reg number, tax and tax period to ensure accurate allocation of the payment. Where insufficient details are provided, payments remain unallocated indefinitely with no update to the customer record. This issue does not arise with Revenue’s online payment methods where the payment is automatically updated to the customer record once processed through the payment systems.  The payment method can often cause confusion for some taxpayers due to the misunderstanding that by selecting the ‘online banking’ option, Revenue will automatically deduct the payment from their account. Customer contact can then follow querying why the payment hasn’t been deducted from their account. Revenue provided a note which details the changes and screenshots of old and new ROS screens. 

Taxpayers who filed their 2019 Form 11 early can amend their future payment date from the original extension date (12 November) to the current extension date of 10 December. Taxpayers can amend their future payment date by sending a request via MyEnquiries (selecting ‘Other than the above’ and from the ‘more specifically’ menu, select ‘Revenue On-line Service (ROS) Payments’).   Revenue are urging taxpayers and their agents to make contact now but no later than 9 November, to allow sufficient time for Revenue systems to update. 

Following queries raised at a recent TALC meeting, Revenue confirmed that for the 2020 year of assessment, no BIK will arise where an employer facilitates an employee in obtaining a flu vaccination. Revenue outlined that an employer will be deemed to facilitate an employee in obtaining a flu vaccination if they arrange for a vaccination to be provided to an employee, make a direct payment to a registered practitioner to provide a vaccination to an employee or reimburse an employee for all or part of the vouched cost the employee has incurred in obtaining a vaccination. Any such arrangement put in place by an employer must be offered and made generally available to all employees. Guidance on this matter is expected to be published in the next few days.

An Taoiseach, Micheál Martin, confirmed that improvements to the Pandemic Unemployment Payment (PUP) and the Employment Wage Subsidy Scheme (EWSS) would be made to take account of the new Level 5 restrictions, in his speech on Monday night last week. These improvements take the form of a new payment structure for the PUP and a change to payment rates under the EWSS. The frequency of EWSS payments is also accelerated, to align subsidy payments with the employer’s payroll frequency. Chartered Accountants Ireland lobbied for this improvement since the commencement of the EWSS.The new payment structure for the PUP is as follows:Prior weekly earnings (gross)PUP PaymentLess than €200€203€200 - €299.99€250€300 - €399.99€300Greater than €400€350The Department of Employment Affairs and Social Protection confirmed that payments made on Tuesday 27 October will include the new rate.In efforts to align the PUP amendments with the EWSS, the revised payment rates/bands for the EWSS, are as follows:Employee gross weekly paySubsidy payableLess than €151Nil€151 - €202.99€203€203 - €299.99€250€300 - €399.99€300€400 - €1,462€350Greater than €1,462NilThe revised rates under the EWSS are effective from the next payroll date after 19 October and will run to the end of January 2021. Minister for Finance, Paschal Donohoe, TD commented:“It is estimated that increased spending on the enhanced Pandemic Unemployment Payment (PUP), Employment Wage Subsidy Scheme (EWSS) and the new Covid Restrictions Support Scheme (CRSS) combined with falls in tax revenue over the next 6 weeks could amount to a further €1¼billion, on top of what had already been provided for. This will bring our deficit from -6.2% of GDP to -6.5% for 2020.”In a recent press release, Revenue confirmed that the frequency of EWSS payments is to be changed so that they are made on a similar basis to the Temporary Wage Subsidy Scheme (TWSS). Chartered Accountants Ireland lobbied for the frequency of EWSS payments to be aligned with the employer’s payroll frequency since the EWSS came into effect on 1 September. This is an essential cashflow support for many employers at this time. Revenue detailed that the first EWSS payments in respect of November payrolls will be made in early November, rather than by 5 December. Thereafter, subsequent payments for November will be paid following the receipt of a payroll submission containing an EWSS claim. Revenue are reminding employers who may have not previously qualified for the EWSS, that the scheme continues to be available to them as they face into Level 5 restrictions. Once an employer meets the qualifying criteria, they can register for the EWSS and receive subsidy payments for payroll submissions with a pay date on or after the date of registration. Revenue’s EWSS Guidelines were recently updated to include examples for businesses closed due to Level 5 restrictions.The Department of Finance confirmed that it is intended that a legislative amendment to give effect to the enhancements to the rates of subsidy available under the EWSS, announced earlier last week, will be introduced during the passage of the Finance Bill 2020 through the Oireachtas.

Revenue updated the Tax and Duty Manual (TDM) e-Working and Tax to provide clarity on capital expenditure incurred by an employee while working from home and allow for concessional treatment of broadband expenses relating to COVID-19. The manual also provides confirmation that the normal place of work, even in the current circumstances, is the office. Chartered Accountants Ireland, under the auspicious of the CCAB-I, submitted feedback for consideration to the Government’s consultation on remote working earlier in the year, which highlighted the need for reform of the taxation treatment of matters relating to remote working. Revenue e-Brief No. 193/20 confirmed the updates to the TDM Part 05-02-13 – e-Working and Tax as set out below: Paragraph 4 now clarifies that capital items such as laptops, computers, office equipment and office furniture purchased by an employee are not allowable deductions under section 114 TCA 1997; Paragraph 5 includes concessionary treatment for broadband expenses incurred while working from home throughout the duration of the pandemic. Revenue is willing to accept that 30% of the cost of broadband, apportioned on the basis of the number of days worked from home over the year, may also be claimed as a deduction; Paragraph 6 includes an example of the calculation of the allowable expenses; Paragraph 7 provides for the new category of ‘Remote Working (e-Working) Expenses’ to be used by employees when making a claim on myAccount; and Paragraph 9 clarifies that “in the current situation of Covid-19 where an employee is required to work at home full time for the duration of the pandemic, the normal place of work is the office.” The Minister for Finance detailed in his Budget Day speech that an Inter-Departmental Group is working on a strategy for remote working and remote service delivery, as committed to in the Programme for Government. It is hoped that additional supports for remote workers, particularly in the current environment, will come from this. 

Chartered Accountants Ireland under the auspices of the CCAB-I has written to the Chairman of the Revenue Board, Niall Cody calling for Revenue to suspend the late filing surcharge for 2019 income tax returns. We also restate the difficult task facing employers and their accountants in meeting the TWSS reconciliation deadline of 31 October and dealing with TWSS compliance check letters. The deadlines associated with these obligations should be suspended. We will keep you updated on the progress of our lobbying efforts.  

Finance Bill 2020 Dáil Second Stage is scheduled for Wednesday 4 and Thursday 5 November. Committee Stage is scheduled for 17, 18 and 19 November. The Report Stage is scheduled for 2 and 3 December and the Seanad Report Stage is scheduled for 16 December. The requirements of the European Union’s Two-Pack budgetary schedule a common budgetary timeline applies to all EU Member States. As a result, there is a considerably short timeline of 65 to 70 days in the finance act process.  Finance bills complete passage through the Oireachtas by 31 December each year. This truncated process can give rise to instances of poor-quality tax laws which generate difficulties for Irish taxpayers. We have made representations to Government on these problems in past bills and will do so again considering Finance Bill 2020. 

The European Commission is seeking feedback on a new initiative to review the VAT rules for financial and insurance services. The Commission outlines that the current VAT rules are criticised for being complex, difficult to apply and for not having kept pace with the developments of new services in the sector. This seems to have led to a lack of VAT neutrality, legal uncertainty and high administrative and regulatory costs. The initiative focuses on addressing these issues through modernisation of the VAT treatment of financial and insurance services. The feedback is due by 19 November 2020. For more information read the roadmap.