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Financial Provisions (Covid-19) (No. 2) Act 2020

5. Covid-19: special warehousing and interest provisions (contributions)

The Social Welfare Consolidation Act 2005 is amended by inserting the following section after section 17B:

17C. “Covid-19: special warehousing and interest provisions for contributions

(1) In this section—

Covid-19” has the same meaning as it has in the Emergency Measures in the Public Interest (Covid-19) Act 2020;

Covid-19 liabilities” means, subject to subsections (13) and (14), the contributions that an employer is liable to pay under section 13 in respect of income tax months in Period 1, to the Collector-General;

inspector of taxes” means an inspector of taxes appointed under section 852 of the Act of 1997;

‘Period 1”, in relation to an employer, means the period—

(a) beginning on the later of—

(i) the first day of the income tax month immediately preceding the income tax month in which the employer’s business was first adversely affected by Covid-19, and

(ii) 1 February 2020,

and

(b) ending on the last day of the taxable period next following the taxable period in which the recommencement date falls;

Period 2”, in relation to an employer, means the period—

(a) beginning on the day next following the last day of Period 1, and

(b) ending on—

(i) the day that is the earlier of—

(I) the day that is 12 months from the day first-mentioned in paragraph (a), and

(II) 31 December 2022,

or

(ii) where the Minister for Finance makes an order for the purposes of this subparagraph, the day that is the earlier of—

(I) the day specified in the order, and

(II) 31 December 2022;

Period 3”, in relation to an employer, means the period—

(a) beginning on the day next following the last day of Period 2, and

(b) ending on the day on which the employer has discharged the Covid-19 liabilities in full;

recommencement date”, in relation to an employer, means the later of—

(a) the day on which the employer’s business ceased to be subject to restrictions provided for in regulations made under sections 5 and 31A of the Health Act 1947, and

(b) where it is demonstrated to the satisfaction of the Revenue Commissioners that the business did not recommence on the day referred to in paragraph (a), the day on which the business recommenced after it ceased to be subject to the restrictions referred to in that paragraph;

taxable period” means a period of 2 months beginning on 1 January, 1 March, 1 May, 1 July, 1 September or 1 November.

(2) For the purposes of this section, the business of an employer shall be treated as being adversely affected by Covid-19 on the date on which the Revenue Commissioners agreed to temporarily suspend the collection of the liabilities of the employer in respect of contributions as a consequence of the effect on the employer’s business of Covid-19.

(3) This section shall apply to an employer—

(a) who, as a consequence of the effect on the employer’s business of Covid-19 is unable to pay all or part of the employer’s Covid-19 liabilities,

(b) who complies with the requirement to file returns under section 17A, and

(c) either—

(i) the employer’s tax affairs are administered by the Personal Division or Business Division of the Office of the Revenue Commissioners, or

(ii) the employer has formed the view that the employer is unable to pay all or part of the employer’s Covid-19 liabilities and has notified the Revenue Commissioners that the employer has formed such a view.

(4) For the purposes of subsection (3)(c)(i), an employer’s tax affairs shall be treated as being administered by the Personal Division or Business Division of the Office of the Revenue Commissioners where the most recent correspondence received by the employer from that Office indicates that to be the case.

(5) An inspector of taxes, or such other officer as the Revenue Commissioners have nominated for the purposes of section 990 of the Act of 1997, may make such enquiries as he or she considers necessary to satisfy himself or herself as to whether an employer is unable to pay all or part of the employer’s Covid-19 liabilities.

(6) Where this section applies to an employer—

(a) subsections (1) and (2) of section 17B,

(b) section 991 of the Act of 1997, and

(c) Article 10 of the Social Welfare (Consolidated Contributions and Insurability) Regulations, 1996 (S.I. No. 312 of 1996),

shall not apply to the employer’s Covid-19 liabilities.

(7) Where—

(a) this section applies to an employer, and

(b) the employer complies with the employer’s obligations under section 17A,

no interest shall be due and payable by the employer in respect of the employer’s Covid-19 liabilities during Period 1 and Period 2.

(8) Where—

(a) this section applies to an employer,

(b) the employer complies with the employer’s obligations under section 17A,

(c) the employer has, prior to Period 3, entered into an agreement with the Collector-General to pay the employer’s Covid-19 liabilities, together with interest under this subsection, and

(d) the employer complies with the obligations of the employer under the agreement referred to in paragraph (c),

interest shall be paid by the employer in respect of the Covid-19 liabilities from the first day of Period 3 and the amount of that interest shall be determined in accordance with subsection (9).

(9) The interest referred to in subsection (8) shall be the amount determined by the formula—

DL x D x P

where—

DL is the amount of the Covid-19 liabilities which remains unpaid on the first day of Period 3,

D is the number of days (including part of a day) forming Period 3, and

P is 0.0082 per cent.

(10) Where an employer—

(a) during Period 1 or Period 2, fails to comply with an obligation referred to in subsection (7)(b),

(b) on the first day of Period 3, has not entered into an agreement referred to in subsection (8)(c), or

(c) during Period 3, fails to comply with an obligation referred to in subsection (8)(b) or (d),

interest shall be paid by the employer in respect of the employer’s Covid-19 liabilities from—

(i) in a case in which paragraph (a) or (c) applies, the date on which the event resulting in failure to comply with the obligation concerned occurred, and

(ii) in a case in which paragraph (b) applies, the first day of Period 3,

and the amount of that interest shall be determined in accordance with subsection (11).

(11) The interest referred to in subsection (10) shall be the amount determined by the formula—

DL x D x P

where—

DL is the amount of the Covid-19 liabilities which remains unpaid on the date referred to in subsection (10),

D is the number of days (including part of a day) during which the Covid-19 liabilities remain unpaid, and

P is 0.0274 per cent.

(12) Section 960E(2) of the Act of 1997 shall not apply in respect of Covid-19 liabilities where the employer concerned complies with the employer’s requirement to file returns under section 17A.

(13) Where the Collector-General has, under section 985G(7) of the Act of 1997, varied the due date for payment of any income tax due in respect of an income tax month such that an employer may pay such tax liabilities quarterly, liabilities in respect of contributions for any income tax months which are due from the employer at the same time as liabilities for income tax months within Period 1 shall be treated as Covid-19 liabilities.

(14) Where—

(a) the Collector-General has, under section 985G(7) of the Act of 1997, varied the due date for payment of any income tax due in respect of an income tax month such that an employer may pay such tax liabilities annually, and

(b) Period 1 for the employer ends in December 2020 or February 2021,

liabilities of the employer in respect of contributions for all income tax months in 2020 shall be treated as Covid-19 liabilities.

(15)(a) The Minister for Finance may, in order to mitigate the adverse economic consequences resulting, or likely to result, from the spread of Covid-19, by order specify a day for the purpose of subparagraph (ii) of paragraph (b) of the definition of ‘Period 2’ in subsection (1).

(b) The Minister for Finance shall not specify in an order under paragraph (a) a day that falls after 31 December 2022.

(c) An order under this subsection shall be laid before Dáil Éireann as soon as may be after it has been made and, if a resolution annulling the order is passed by Dáil Éireann within the next 21 days on which Dáil Éireann has sat after the order is laid before it, the order shall be annulled accordingly, but without prejudice to the validity of anything previously done thereunder.”.