Covid-19 – Revenue Commissioners – Important tax changes

This note is part of a series that the lawyers of Reddy Charlton will issue on the major legal, personal and business issues that will confront us all during the Covid-19 crisis.

In light of the recent Covid-19 (Coronavirus) pandemic, Revenue have announced that they will be making various changes to their Tax deadlines and payments generally in order to try and help those affected.

Reddy Charlton have highlighted below some of the key changes being implemented at present. Revenue have confirmed that they will continue to monitor the development of Covid-19 and take appropriate measures in accordance with the public health and government guidelines.

Information for SMES

Interest on late payments VAT & PAYE

Revenue have suspended the application of interest on the late payment of VAT for businesses for the January-February return and the late payments of employers’ PAYE liabilities for February and March for SME businesses.

Revenue believe that these measures would support small and medium sized enterprises (SMEs) experiencing cash flow problems and general difficulties arising from the coronavirus crisis.

Debt enforcement

All debt enforcement activity is suspended until further notice.

Tax clearance status

Current tax clearance status will remain in place for all businesses over the coming months.

Tax refunds

Revenue have indicated that they are prioritising the processing of refunds and repayment claims to tax payers.

Submission of Tax Returns

Revenue have advised that where possible tax returns should be submitted as normal or at least on a ‘best estimate’ basis.

What is an SME?

For the purpose of these measures an SME is a business with a turnover of less than €3million which is managed by Revenue’s business division (and not the large case division or medium enterprises division).

What about non-SME’s?

Revenue are advising businesses other than SMEs who are experiencing difficulties at this time to contact the Collector-General’s office or engage directly with its branch contacts.

Local Property Tax

• It has been announced that Revenue will be pushing back the date that Local Property Tax is due across Ireland.
• The original date for the LPT payment was 21 March 2020 however this has now been changed to Thursday, 21 May 2020.
• Revenue have explained that those property owners who have opted to pay their LPT for 2020 by Annual Debit Instruction or Single Debit Authority payment do not need to advise Revenue or take any further action as the payment date will be changed automatically.

Credit Card Stamp Duty

• Revenue have confirmed that the stamp duty on credit cards will not be collected until 1 July 2020.
• Usually financial institutions will collect the stamp duty from credit card accounts on 1 April every year however this has been extended. The stamp duty due on credit cards is €30 per year per credit card account.
• Again, in this instance no further action is required to be taken by individual credit card holders as the collection date will be changed automatically by financial institutions.

Information for Sub-Contractors – Relevant Contracts Tax

• Revenue have also indicated that a scheduled rate review of the relevant contract tax (RCT) paid by sub-contractors has been deferred.
• This process assesses the current compliance position of each subcontractor in the Electronic RCT system and establishes their correct RCT deduction rate which could be 0%, 20% or 35%.
• Revenue have decided to place a pause on this process as it may result in a subcontractor’s RCT rate increasing due to changes in their respective compliance positions.
• Rate reviews can be self-managed by subcontractors in ROS and therefore a ‘self-review’ can be undertaken to see if their rate should be lower and if they can then avail of the lower deduction rate.

The situation is evolving rapidly as are the measures being introduced in response. Therefore, before taking any action to withhold or defer tax payments, it is worth checking the up to date position to ensure that your business qualifies for the relief measures introduced and/or to engage with your local Revenue branch.

How can Reddy Charlton help?

During this Covid-19 crisis, Reddy Charlton Solicitors are eager to support, encourage and guide your business. If you have any queries or seek further information on the tax changes and implications or any other area of commercial law, please contact Elaine McGrath at emcgrath@reddycharlton.ie