Faced with a suddenly challenging economic climate, Law Society President Michele O’Boyle has made representations to Government departments and other State agencies in a plea for urgent steps concerning tax measures, rates, and wills and estates.
A letter to Revenue and the Department of Finance has asked that the Government suspend tax payments – income tax, corporation tax, VAT, PAYE, RCT – for adversely-affected businesses for an initial period of three months, while the crisis is ongoing.
The submission further requests that:
1. The measures announced by Revenue on 13 March to assist small and medium enterprises (SMEs) should be extended to all businesses and not just those entities with an annual turnover of less than €3 million and not dealt with in the Large Cases or Medium Enterprises Divisions.
2. Tax Refunds:
- Expedition of the processing of outstanding tax refunds owed to businesses together with release of all Professional Services Withholding Tax,
- All legitimate tax refunds in the system held up on account of late filing of non-essential returns should be released,
- VAT aspect queries should only be raised in exceptional circumstances in VAT refund situations.
3. Extension of the COVID-19 refund scheme for the duration of the crisis to all employers in affected businesses who retain staff on salaries of not less than 75% of pre-existing salary.
4. Provision of a double deduction for employers in affected businesses for the cost of remuneration of staff (net of COVID-19 payments) for the duration of the crisis where such staff are retained in the business and where salaries are held at not less than 75% of pre-existing levels. This will incentivise business to retain staff.
5. Provision of a 50% rebate on statutory redundancy to employers in affected businesses if the redundancy amount is paid in full within one month of the redundancy date.
This measure will protect otherwise viable businesses in redundancy situations which may arise if short-time/lay-off situations extend beyond a 4-week period.
6. Provide a deduction equal to the rent abatement for residential landlords who give rent holidays to workers adversely affected for the period of the crisis.
7. Adjustments of VAT deductible where consideration is unpaid after 6 months (section 62A) should be deferred.
8. DAC 6, which comes into operation on 1 July 2020, should be deferred.
9. A flexible approach will be needed from Revenue in order to address the individual and company residency test difficulties arising on foot of the travel restrictions and changes in work locations during the crisis and in relation to relevant qualifying conditions for certain tax reliefs and exemptions such as SARP.
11. Waiving of commercial rates for all ratepayers forced to close until normal trading can resume.
Wills and estates
12. Practitioners are concerned that vulnerable persons may make a homemade/DIY will during the crisis without the benefit of legal or tax advice.
In such cases where an emergency will has been put in place, ensure that the tax consequences should be no worse than if the person died intestate.
13. Flexibility may be required around payment dates for Capital Acquisitions Tax and Discretionary Trust Tax if a taxpayer is restricted from obtaining advice during the period of the crisis.