COVID-19 REVENUE UPDATE

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. 

For tax purposes, Revenue have confirmed that an SME is “a business with turnover of less than €3 million who is not dealt with by either Revenue’s Large Cases Division or Medium Enterprises Division”.

Information for SMEs  

  • Tax Returns: businesses experiencing temporary cash flow difficulties should continue to send in tax returns on time.
  • Application of Interest: the application of interest on late payments is suspended for January/February VAT and both February and March PAYE (Employers) liabilities.
  • Debt Enforcement: All debt enforcement activity is suspended until further notice.
  • Tax Clearance: In recognition that late tax payments will be a distinct possibility, Revenue have also confirmed that the current tax clearance status will remain in place over the coming months.

The measures outlined above only apply to SMEs. For other businesses who are experiencing cash flow or trading difficulties, the advice from Revenue is to proactively engage with Revenue as early as possible with a view to putting in place new payment arrangements acceptable to both Revenue and the business. These businesses can contact the Collector General’s Office on (01) 7383663. 

Alternatively, these businesses can engage directly with their Revenue contact in Revenue’s Large Corporate Division or Medium Enterprises Division. Revenue have stated that “It is important that businesses know that Revenue has a long history of working very successfully with taxpayers to resolve their tax payments difficulties.”

RCT

The Revenue have also announced that the planned RCT (Relevant Contracts Tax) review scheduled to take place in March 2020 is suspended. The review assesses the current rate applicable to each subcontractor in the eRCT system and determine whether a different rate should apply.  As this process may result in a subcontractor’s RCT rate increasing due to changes in their compliance position, the review is suspended.

Subcontractors are reminded in the statement that “self-review” within the eRCT system is possible in order to check their current rate and apply for a reduced RCT rate.

Customs

Revenue has stated that critical pharmaceutical products and medicines will be given “green routing” status to facilitate uninterrupted importation and supply.

Conclusion

Revenue have confirmed that they will continue to closely monitor the situation as it evolves with regard to Covid-19 and will issue further updated guidance for businesses prior to the deadline for March/April VAT returns and other payments due. While the measures introduced so far are extremely welcome, in a time of uncertainty, further measures will be required to help SMEs and even larger businesses to remain solvent through these difficult times. 

If you have any questions or need further information on any of the above, please contact Lalor O’Shea McQuillan for assistance.