Budget Highlights 2021

INCOME TAX

• An increase in the Earned Income Credit from €1,500 to €1,650
• An increase in the Dependent Relative Credit from €70 to €245
• Extension of the Sea-going Naval Personnel Tax Credit to 31 December 2021 and to increase it to €1,500 for 2021 (from €1,270 in 2020). 
• €203 increase to the 2% USC rate band ceiling to €20,687
• The reduced rate of USC for medical card holders is being extended for a further year.

ADDITIONAL TAX MEASURES

• Temporary Reduction of VAT for Tourism and Hospitality items from 13.5% to 9% from 1 November 2020.
• Increase in the Farmers Flat Rate Addition from 5.4% to 5.6% 
• Revised balancing charge rules on capital allowances for intangibles with effect from 14 October
• From 1 January 2021 the weekly income threshold for the higher rate of employers PRSI will increase from €394 to €398.

MEASURES TO SUPPORT ENTERPRISE/ SMEs/ AGRI- SECTOR

• Expansion of Warehousing of tax liabilities to include repayments of Temporary Wage Subsidy Scheme funds owed by employers.
• Extension of Warehousing of tax liabilities for the adversely affected self-employed to include the 2019 balance and 2020 preliminary tax to allow such taxpayers to defer payment for a period of a year with no interest applying.  A 3 per cent interest rate will apply thereafter and will attract no surcharge.
• EWSS will continue in some form throughout 2021.
• The Film Tax Credit Regional Uplift scheme is being extended by one year by inserting an additional year of uplift at the rate of 5% in 2021. 
• Amendment of CGT Entrepreneurial Relief so that an individual who has owned at least 5 per cent of the shares for a continuous period of any three years qualifies for this relief. Previously, a person had to own at least 5 per cent for a continuous period of 3 years in the 5 years immediately prior to the disposal. 
• Farm Consolidation Stamp Duty Relief extended in its present format until 31 December 2022 
• Consanguinity (Stamp Duty) Relief extended in its present format until 31 December 2023 
• Housing Residential Development (Stamp Duty) Refund Scheme Extension from 31 December 2021 to 31 December 2022 with minor amendments.
• There is a two year extension of the Knowledge Development Box to 31/12/2022

COVID RESTRICTIONS SUPPORT SCHEME (CRSS)

• This scheme is designed to assist those businesses whose trade has been significantly impacted or temporarily closed as a result of the restrictions as set out in the Government’s ‘Living with Covid-19’ Plan. 
• The scheme will generally operate when Level 3 or higher is in place and will cease when restrictions are lifted. The sectors impacted by the current Level 3 nationwide restrictions are accommodation, food and the arts, recreation and entertainment.
• If the Government decides to move to a higher level of restriction then other sectors may qualify. 
• For these businesses, the Government will make a payment, based on their 2019 average weekly turnover, to provide support at a difficult time. 
• Qualifying businesses can apply to the Revenue Commissioners for a cash payment in respect of an advance credit for trading expenses for the period of the restrictions. The scheme will be effective from today, Budget Day, until 31st March 2021, and the first payments will be made to affected businesses by mid-November. 
• Payments will be calculated on the basis of 10 per cent of the first €1 million in turnover and 5 per cent thereafter, based on average VAT exclusive turnover for 2019. It will be subject to a maximum weekly payment of €5,000.
• The scheme will operate on a self-assessment basis and qualification will require a business to demonstrate that their turnover has been severely impacted; that is it may not exceed 20 per cent of the turnover for the corresponding period in 2019.

CLIMATE AND ENVIRONMENTAL MEASURES

• Carbon Tax €7.50 Increase in Carbon Tax Rate 
• Changes to Vehicle Registration Tax and to Motor Tax 
• The Accelerated Capital Allowance scheme for Energy Efficient Equipment is being extended for three years to 31/12/2023 

FURTHER UPDATE CONCERNING THE COVID-19 WAGE SUBSIDY SCHEME

This e-news provides a further update concerning the Covid-19 Wage Subsidy Scheme in light of the publication of Revenue guidelines regarding their approach to employer’s eligibility for the scheme and the examination of supporting proofs.

REVENUE MEASURES INTRODUCED TO RELIEVE THE IMPACT OF COVID-19

The Irish Revenue have announced some measures which are designed to help support small and medium size businesses (SME’s) experiencing cash flow and trading difficulties as a result of the Covid-19 epidemic. 

Thank You So Much For Your Support and Generosity! We’ve made a short video for you!

On Friday 6th September, the Partners, Tax Team, Account Managers and Support Team from our Carlow and Dublin office walked and ran a combined 500km to raise funds for Carlow Relay for Life and the Irish Cancer Society.

Two months later, on Friday 15th November we presented a cheque for €15,100 to Gerard Holohan, Chairman for Relay for Life Carlow. Ger was delighted to receive the cheque on behalf of this very worthy cause. “The aim of Relay for Life is to bring the local community together so they can share experiences and support each other. Survivors, family and friends of people touched by cancer in our local community all find comfort and support at our annual Relay for Life event.”

Applications are needed now for the next Relay for Life event

Without teams being formed and applications submitted over the winter months, then the Relay for Life Summer event cannot go ahead.  To find out more about forming and registering a team please contact Gerard Holohan though the Carlow Relay for Life Facebook page. Applications need to be submitted in January 2020 if the event is to go ahead.

Click here to connect with Relay for Life Carlow on Facebook

We hope our event will encourage businesses like yours to put a team together for Relay for Life and support this great local charity.

Jersey Day at Lalor O’Shea McQuillan

Wednesday 17 July was Jersey Day. We kickstarted our fundraising campaign by giving staff the chance to wear their favourite jersey. As you can see the Laois supporters made a big impact!

As James in our Audit and Business Advisory team says ‘we need to fight back against cancer, as it affects so many people in so many different ways. The fight starts with each and every one of us.

Thanks again for all your generous donations and your support for our team.

From the Partners and Team at Lalor O’Shea McQuillan

Filing Deadline for RBO is Friday 22nd November 2019

The Register of Beneficial Owners (RBO) deadline is Friday 22nd November 2019. The RBO has confirmed that there will be no extension to the deadline. The RBO has the power to impose sanctions although they have not indicated when these sanctions may start.

Do you want help filing?

We are pleased to offer you our services to prepare the relevant documents and to file the beneficial ownership information on your behalf. You can call us on 059 913 7040 or 01 278 4455.

What is Beneficial Ownership

This new piece of legislation will affect every company in Ireland and involves changes that are onerous on shareholders as well as company management.

The E.U. (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) Regulation 2019 provides for the creation of a new central register of the beneficial owners of Irish corporate entities.

The term beneficial ownership of a relevant entity is a natural person(s) who ultimately owns or has control of 25% plus one share of the equity or voting/control rights, either directly or indirectly.

In cases where no individual meets the thresholds to be a beneficial owner, details of the senior managing officials (e.g. company directors) are entered in the register of beneficial owners.

What information is to be obtained by the relevant entities?

• Names, dates of birth, nationalities and residential addresses of each beneficial owner
• A statement of the nature and extent of the interest held by each beneficial owner
• The PPS number of each beneficial owner
• The date on which the natural person was entered into the register as a beneficial owner, and
• The date on which the beneficial owner of the entity ceased to be such an owner

Who is obliged to file in the Central Register?

The Regulations require all Irish incorporated companies and body corporates to obtain, hold and file information on their beneficial owners.

Companies listed on a regulated market or subject to disclosure requirements consistent with the law of the EU or subject to equivalent international standards which ensure transparency of ownership information are exempt.

Deadline for Filing

Companies have until 22 November 2019 to file the required information with the Central Register.

All newly incorporated companies will have five months from the date of incorporation to make its first filing of beneficial ownership information.

Who can access the Beneficial Ownership Register?

Unrestricted access to beneficial ownership information in the Central Register is permitted to a number of bodies, including An Garda Siochana, the Financial Intelligence Unit (FIU), Revenue Commissioners and the Criminal Assets Bureau.

Members of the public have the right to access the following information in the Central Register:

• The name, the month and year of birth, the country of residence and nationality of each beneficial owner (no access to PPS numbers or residential addresses)
• A statement of the nature and extent of the interest held or control exercised by each such beneficial owner.

Is there a requirement to keep the Register up-to-date?

Following the initial filings made to the Central Register, any changes to the beneficial ownership information must be updated within 14 days of such changes taking place on the internal beneficial ownership register.

Penalties for failure to compy

An entity that fails to comply commits an offence and the liability can range from on summary conviction €5,000 or on conviction on indictment to a fine not exceeding €500,000.

Tax Relief on Nursing Home Expenses

You may claim income tax relief on nursing home expenses paid by you. You can claim this relief at your highest rate of tax if the nursing home provides 24-hour on-site nursing care.

Nursing Homes Support (Fair Deal) Scheme

The Health Service Executive (HSE) can provide you with assistance for the cost of your nursing home care. The HSE will review your income and assets to calculate the amount you should pay towards the cost of your care. You can claim health expenses relief on the amount you pay yourself.

The HSE pay the balance of the costs of the nursing home. You cannot claim health expenses relief on this amount.

Ancillary State Support Scheme (Fair Deal Loan Scheme)

You may wish to defer your healthcare costs. You can do this if you have Irish land or property assets. The HSE provide you with a loan, using your assets as security. The loan is paid directly by the HSE to the nursing home. You cannot claim health expenses on the amount paid by the HSE to the nursing home.

The loan is due to be repaid:

When you sell the asset used as security or upon your death.

When the loan is repaid, you or your estate can claim health expenses on the amount repaid.

Additional nursing care expenses

You can claim relief for the cost of expenses of additional nursing care.

If you or your relative suffer from a serious illness and require home nursing. This is where you employ a qualified nurse, on the advice of a medical practitioner, to provide nursing care at home.

Or if you are in a nursing home and require more nursing care than is normally required.

To claim this relief, you must provide a medical certificate that states:

• That constant nursing care by a qualified nurse in the patient’s home is necessary or that additional nursing care in the nursing home is necessary
• The name and address of the patient
• The nature of the patient’s illness
• The full period for which home nursing is being claimed.

You must also provide the nurse’s full name and address, as well as proof of their nursing qualification.

You must keep a breakdown of all payments to the nurse and all payment receipts.

How to claim

To claim tax relief on nursing home or additional nursing care expenses, you must include the amount in your health expenses and enter on your tax return.

For more information contact our Dublin Tax Team on 01 278 4455 or our Carlow Tax Team on 059 913 7040.

Close Company Surcharge On Certain Undistributed Income

Section 440 of the Taxes Consolidation Act 1997 provides for an additional charge of corporation tax on close companies at the rate of 20 per cent of the excess of the aggregate of the distributable investment income and the distributable estate income over the distributions made for an accounting period.

A close company is defined as a company under the control of 5 or fewer participators or under the control of participators who are directors.

Exemptions to the surcharge

There is no surcharge where the excess is €2,000 or less and marginal relief is provided where the excess is slightly more. Where a company has associated companies, the €2,000 limit is divided by the number of associated companies, including the company itself. An associated company must be included for the purposes of the surcharge even if it was an associated company for part only of the accounting period concerned.

The amount on which the surcharge is made cannot exceed the accumulated undistributed income at the end of the accounting period. Where a company is subject to any restriction imposed by law as regards the making of distributions, regard shall be had to this restriction in determining the amount of income on which a surcharge shall be imposed under section 440.

For more information contact our Dublin Tax Team on 01 278 4455 or our Carlow Tax Team on 059 913 7040.

Employment Investment Incentive (EII) and Start-up Relief for Entrepreneurs

Finance Act 2018 – Business Tax

The Act aims to simplify the legislation provisions of the income tax reliefs for investment in corporate trades.

The most significant change being the move away from the current application process to a system whereby companies will now self-certify that they have met the conditions. It amends the trigger points in relation to when claims can be made, tying all claims to a requirement to have spent 30% of the money on a qualifying purpose rather than the various trigger points which currently apply under existing provisions. EII and SURE reliefs will be able to run until the end of 2021.

Intellectual Property

The Act has updated the rules for capital allowances on Intellectual Property. The update provides additional clarity on income arising when IP is acquired prior to 11 October 2017 and when IP is acquired from 11 October 2017 onwards.

The updates now require that the income received from the two different periods be treated as two separate income streams when calculating capital allowances.

For more information contact our Tax Team in Dublin on 01 278 4455.