Covid19 Finance Bill

On 21st December 2021, the Government announced the expansion of supports for businesses impacted by public health restrictions that came into effect from 20th December 2021 to 31st January 2022 including changes to:

1. the Employment Wage Subsidy Scheme (EWSS)
2. the Covid Restrictions Support Scheme (CRSS) and
3. the Debt Warehousing Scheme

A summary of the developments to the schemes is outlined below.

1. The Employment Wage Subsidy Scheme (EWSS)

On 9th December 2021 it was announced that the enhanced subsidy rates under the EWSS will continue until 31st January 2022.  In other words these enhanced rates will be paid in respect of payroll submissions which have pay dates in December 2021 and January 2022.

Today, Minister Donohoe confirmed that the EWSS will also be reopened for certain businesses who would not otherwise be eligible for the scheme.

Employers can re-join the scheme from January 2022 if they meet the following conditions:

1. they previously claimed support under EWSS which they were correctly entitled to
2. they anticipate that their combined turnover for December 2021 and January 2022 will be down by at least 30% as compared with their combined turnover for December 2019 and January 2020.
3. for businesses established between 1st May 2019 and 31st December 2021 their average monthly turnover for December 2021 and January 2022 must be down by at least 30% when compared with the average monthly turnover across the period August 2021 to November 2021 or on a pro-rata basis in circumstances where the business was established during this period.
4. The business must have tax clearance.

Employers who qualify for re-entry to the EWSS will receive support from 1st January 2022 onwards. These businesses can remain in the scheme until its expiry date of 30th April 2022.

Please bear in mind that the business must experience a 30% reduction in (a) turnover or (b) customer orders during a particular reference period to qualify.

Businesses that commence trading operations from 1st January 2022 onwards will not be eligible for the scheme.

For further information, please click: https://www.revenue.ie/en/corporate/press-office/budget-information/2021/crss-guidelines.pdf

2. The Covid Restriction Support Scheme (CRSS)

From 20th December 2021, the CRSS opens to businesses within the hospitality and indoor entertainment sector such as bars, restaurants and hotels as well as theatres and cinemas that are now required to close by 8pm each night until 31st January 2022.

The eligibility criteria regarding the reduction in turnover has also increased to no more than 40% of 2019 turnover.  Previously it was no more than 25% of the 2019 turnover.

Companies, self-employed individuals and partnerships that carry out a taxable trade can apply for the CRSS.

A qualifying person who meets the revised eligibility criteria can make a claim to Revenue in respect of each week that the eligible business/trading activity is affected by the imposed Covid restrictions.

A qualifying person who carries on such a business is eligible to make a payment claim under the Covid Restrictions Support Scheme if:

• the weekly turnover from the relevant business activity in the claim period will be no more than an amount equal to 40% of the average weekly turnover in a reference period.
• For most businesses the reference period will be 2019.
• For businesses established between 26th December 2019 and 26th July 2021, the reference period will depend on the date on which the business was established.
• the eligible business must have tax clearance for the relevant claim period and must intend to resume trading after the Covid-19 restrictions have been lifted.

For businesses established in the period between 13th October 2020 and 26th July 2021, they are eligible to apply for support under the scheme, however, they are first required to register for CRSS via ROS.  It will only be possible to make a claim once the business has an active CRSS registration.

If the eligible business meets the revised criteria to qualify for the scheme and has previously received CRSS payments in relation to a business premises carrying out a trading activity which was affected by the current public health restrictions, this business can make a CRSS claim using the ROS e-Repayments facility from 22nd December 2022.

Claims can be made in blocks of up to three weeks at a time.  The respective amounts due will be paid by Revenue in one single payment. The normal repayment period is three days from the date the claim was submitted.

In circumstances where a qualifying person carries on more than one eligible business activity from separate/different business premises, then it is possible to make a separate claim in relation to each trading /business activity.

If it’s possible for the business to reopen without having to prevent or significantly restrict access to it’s premises, then this business will not qualify for CRSS.  A business will not be eligible for the CRSS for periods where it chooses or decides not to open.

In situations where it is not feasible for a qualifying person to continue carrying on a relevant business activity during the period of restrictions, a claim for support under the CRSS can still be made.  This is on condition that the eligibility criteria have been met. In order to qualify, the person must have actively carried on the relevant business activity up to the date the latest public health restrictions were imposed and must intend to continue carrying on that same activity once those restrictions have been eased.

The weekly payment is calculated as follows

• 10% of average weekly turnover up to €20,000 i.e. €2,000
• 5% of average weekly turnover in excess of €20,000 up to a maximum of €60,000 i.e. €3,000
• The maximum payment is €5,000 per week.

For the purposes of the CRSS, the “Average weekly turnover” is defined as:

• the average weekly turnover in 2019 in the case of a business established before 26th December 2019,
• the average weekly turnover between 26th December 2019 and 12th October 2020 in the case of a business established during that period, or
• the average weekly turnover in the period 13th October 2020 to 26th July 2021 in the case of a business established during that period.

For further information, please click the link: https://www.revenue.ie/en/corporate/press-office/budget-information/2021/crss-guidelines.pdf

3. Debt Warehousing Scheme

The Revenue Commissioners have confirmed that November/December 2021 VAT liabilities and December 2021 PAYE (Employer) liabilities will be automatically warehoused for businesses which are already availing of the scheme.

The Government confirmed that the Covid restricted trading phase of the Debt Warehousing Scheme (Period 1) will be extended by three months to 31st March 2022 for taxpayers who are eligible for the COVID-19 support schemes. This effectively means that tax debts arising for such affected businesses in the first three months of 2022 can be warehoused.

The zero interest phase of the Debt Warehousing Scheme or Period 2 will begin on 1st April 2022 for those businesses and will run until 31st March 2023.

For further information, please click the link: https://www.revenue.ie/en/corporate/communications/documents/debt-warehousing-reduced-interest-measures.pdf

The Finance (COVID-19 and Miscellaneous Provisions) Bill 2021 was published today.

The provisions contained in the Bill include amendments to existing supports which were announced in the Economic Recovery Plan in addition to the introduction of the Business Resumption Support Scheme.

Reduced rate of VAT (9%) for the hospitality sector

Section 6 of the Bill amends section 46 VATCA 2010 to provide for the extension of the reduced 9% VAT rate until 31st August 2022 in relation to the following services:

• Restaurant and catering services
• Guest and holiday accommodation
• Entertainment services to include admissions to cinemas, theatres, museums, fairgrounds, amusement park and sporting facilities
• Hairdressing
• The sale of certain printed matter including brochures, maps and programmes.

Employment Wage Subsidy Scheme (EWSS)

The Employment Wage Subsidy Scheme (EWSS) is a scheme that subsidises the cost of getting employees back to work.

The extension of the scheme should provide reassurance to businesses affected by the pandemic and enable them to plan for the months ahead.

Section 2 of the Bill amends the Employment Wage Subsidy Scheme (Section 28B of the Emergency Measures in the Public Interest (Covid-19) (No.2) Act 2020) to provide for the following changes:

1. the extension of the Employment Wage Subsidy Scheme (EWSS) until 31st December 2021.
2. the retention of the enhanced subsidy rates up to 30th September 2021.
3. the retention of the qualifying criteria of a 30% reduction in turnover or customer orders threshold.
4. An increase in the reference period to assess eligibility for the scheme from six to twelve months with effect from 1st July 2021.

Covid Restrictions Support Scheme (CRSS) 

The COVID-19 Restrictions Support Scheme (CRSS) was introduced by the Finance Act 2020.

It provided support for businesses which had to temporarily cease as a result of public health guidelines.

At such time as the affected businesses are allowed to re-open, those claimants will have to exit this scheme.

As some of those businesses will remain financially affected, the new measures introduced in the Finance (COVID-19 and Miscellaneous Provisions) Bill 2021 published today will extend the scheme. In addition, there will be an enhanced re-start payment for businesses exiting the scheme equal to up to three weeks at double rate of payment, subject to a €10,000 cap.

Sections 3 and 4 of the Bill amend the Covid Restrictions Support Scheme (CRSS) and provide for the extension of the specified period until 30th September 2021.

Section 4 of the Bill provides for the enhanced restart week payment scheme.  The level of payment a business may claim on reopening, following the restrictions, will depend on the actual date that business reopens.

• For restart weeks between 29^th April to 1^st June 2021, the restart payment will equate to two weeks at double the normal CRSS rate subject to a cap of €5,000, being the maximum weekly amount.
• For restart weeks between 2^nd June to 31^st December 2021, the restart payment will equate to three weeks at double the normal CRSS rate subject to a cap of €10,000, being the maximum weekly amount.
• In all other cases, the standard rate of one week at the normal CRSS rate will apply, subject to a cap of €5,000, being the maximum weekly amount.

Please be aware:

• According to Revenue’s guidelines, an eight week deadline applies to the submission of enhanced restart week payment claims.
• A business can qualify for (a) the double restart week payment or (b) the triple restart week payment once.
• The Minister for Finance has the power to extend this scheme to 31st December 2021 by order.

Business Resumption Support Scheme (BRSS)

Section 5 of the Bill includes a new section, section 485A TCA 1997, which makes provision for a new Business Resumption Support Scheme (BRSS)

The main features of the scheme are as follows:

• BRSS is available for affected self-employed individuals and companies who carry on a trade, the profits from which are chargeable to Income Tax or Corporation 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, businesses must be able to prove that their turnover is reduced by 75% in the reference period (i.e. 1st September 2020 to 31st August 2021) as compared with 2019 but it will be a later period if the business commenced trading on or after 26th December 2019.
• Qualifying taxpayers will be able to claim an amount equal to three times the amount as derived by 10% of their average weekly turnover during the reference period (i.e. 1st September 2020 to 31st August 2021) up to a maximum of €20,000 and 5% thereafter subject to a cap of €15,000.
• Please be aware that these payments will be treated as an advance credit for trading expenses.
• If the business was set up before 26^th December 2019 the claim will be calculated based on its actual average weekly turnover in the period starting on 1^st January 2019. For example, if the business was established after 1^st January 2019, then the claim will be based on the period from the actual commencement date up to 31^st December 2019.
• If the business was established between 26^th December 2019 and 10^th March 2020 the claim will be based on the actual average weekly turnover arising between the date of commencement and 15^th March 2020.
• If, however, the business activity commenced between 10^th March 2020 and 26^th August 2020 then the claim will be based on the actual average turnover generated between the date of commencement and 31^st August 2020.
• The individual, company or persons carrying on a partnership must have an up to date Tax Clearance Certificate in order to make a valid claim under this scheme.
• They must also be VAT compliant.
• They must not be entitled to make a claim under the CRSS Scheme in relation to any week that includes 1st September 2021 and the business must be actively trading, with the intention of continuing to do so.
• Those making a claim must register on ROS and file a declaration that they satisfy the necessary conditions to avail of BRSS.
• Please be aware that the names of BRSS claimants can be published on the Revenue’s website.

Stamp Duty measures for the cumulative purchase of ten or more residential properties

Section 13 of the Bill gives statutory effect to the Financial Resolution that was passed on 19th May 2021 and inserts section 31E in the SDCA 1999, thereby imposing a 10% stamp duty rate on the acquisition of certain residential properties (houses and duplexes but excluding  apartments) where an aggregate of ten or more units is acquired during a twelve month period by a single corporate entity or individual.

Section 14 of the Bill introduces a provision which provides for an exemption from the new 10% rate of stamp duty in situations where the residential units are leased to local authorities for certain social housing purposes.

Tax Debt Warehousing

Section 7 of the the Finance (COVID-19 and Miscellaneous Provisions) Bill 2021 inserts a new section 28D into the Emergency Measures in the Public Interest (Covid-19) Act 2020 which provides for the warehousing of EWSS overpayments received by employers.

Sections 8, 9 ,10, 11 and 12 of the Bill give effect to the extension of the Debt Warehousing Scheme for refunds of Temporary Wage Subsidy Scheme (TWSS) payments, Employer PAYE liabilities, Income Tax, VAT and PRSI:

This scheme will have three periods:

• Period 1 (the “Covid-19 restricted trading phase”) will run from 1st July 2020 to 31st December 2021.
• Period 2 (the “zero interest phase”) – will run from 1st January 2022 until 31st December 2022.  No interest will be levied on warehoused EWSS tax from Period 1.
• Period 3 (the “reduced interest phase) –will run from 1st January 2023 until the relevant tax is repaid to Revenue. interest will be levied at a rate of 3% per annum on the Period 1 warehoused relevant tax, from 1st January 2023.

In circumstances where an employer does not meet the conditions for debt warehousing then (i) the zero interest and (ii) reduced interest rates will no longer apply.  Instead the 8% rate will be imposed.

For full and complete information, please follow the link: https://data.oireachtas.ie/ie/oireachtas/bill/2021/89/eng/initiated/b8921d.pdf