Written Answers Nos. 202-221
202. Deputy Cormac Devlin asked the Minister for Finance if he will consider amending regulations with regard to local property tax to allow more flexibility for persons who have been in receipt of Covid-19 payments for more than six months; and if he will make a statement on the matter. [43013/20]
View answerRevenue has been very active in supporting taxpayers and businesses throughout the COVID-19 crisis, including administering the key Wage Subsidy Schemes and the Debt Warehousing Scheme. In addition, Revenue has also engaged extensively with individual taxpayers experiencing financial difficulties due to the pandemic to agree flexible arrangements that best suit their circumstances, including in respect of Local Property Tax (LPT) liabilities.
Regarding LPT specifically, Revenue has assured me that any property owners experiencing financial difficulties can avail of a wide range of flexible payment options both in respect of 2021 liabilities and for any previous years where liabilities remain outstanding. The full range of payment options, which includes phased arrangements, are available to property owners via the LPT portal on the Revenue website at https://lpt.revenue.ie/lpt-web/views/login.html?execution=e1s1.
Alternatively, property owners can make direct contact with Revenue at telephone number (01) 7383626 or by writing to LPT Branch, PO Box 1, Limerick, where every effort will be made to agree a suitable payment arrangement.
203. Deputy Louise O'Reilly asked the Minister for Finance the options available to a person (details supplied) who cannot receive a response from an insurance company regarding an outstanding claim; and if he will make a statement on the matter. [43037/20]
View answerSetanta Insurance was placed into liquidation by the Malta Financial Services Authority on 30 April 2014. As it was a Maltese incorporated company, the liquidation is being carried out under Maltese law.
Neither I nor the Department of Finance have any role in the process, including the making of applications to the High Court or payments. Regarding when the next payments will be made, the Deputy will note that in accordance with the relevant legislation, there are certain steps to be completed prior to any High Court application for payment from the Insurance Compensation Fund. These include the assessment and verification of each individual claim within the application by the State Claims Agency. I understand that over the past number of months due to the COVID-19 restrictions, there have been delays with these, including around Court access.
The State Claims Agency has confirmed to my Department that the next High Court application relating to Setanta Insurance claims will be made before the end of January 2021 and it is hoped that the payments can be made by early February.
Finally, queries in relation to an outstanding claim should be directed to the liquidator via phone at +353 (0)818 255 255 or via email at iesetanta@deloitte.ie.
204. Deputy Cathal Crowe asked the Minister for Finance if surfing will be considered for the reduced 9% VAT rate; and if he will make a statement on the matter. [43039/20]
View answerI am advised by Revenue that the VAT rating of goods and services is subject to EU VAT law, with which Irish VAT law must comply. In general, the VAT Directive provides that all goods and services are liable to VAT at the standard rate unless they fall within Annex III of the Directive, in respect of which Member States may apply either one or two reduced rates of VAT. Services such as hotel accommodation, restaurant and catering services and the use of sporting facilities are among the items listed in Annex III therefore, permitting Ireland to apply a reduced rate of VAT.
The provision of services by surfing schools are not included in Annex III and as such are subject to the standard rate of VAT, currently 21%. There is no discretion under the Directive for Ireland to apply a reduced rate of VAT to these supplies.
205. Deputy Cormac Devlin asked the Minister for Finance the efforts his officials have made in view of the revised ECB guidance on Covid-19 moratoria for loans to ensure this is being implemented for businesses and consumers in Ireland; and if he will make a statement on the matter. [43042/20]
View answerI assume the Deputy is referring to the European Banking Authority who published a statement on 2 December on the reactivation of guidelines on payment breaks. These guidelines relate to how banks treat loans that have availed of payment breaks for regulatory purposes. These guidelines were previously in force until 30 September 2020.
In September, the Tánaiste, Minister for Public Expenditure and Reform and I met with the retail banks and the Banking and Payments Federation of Ireland (BPFI) who agreed to provide suitable supports, both short term and longer term, to borrowers who are experiencing difficulties on a case-by-case basis.
Many borrowers can and are returning to a position where they can repay their loans; however, many borrowers will be unable to return to full repayments, and these borrowers will require further support. Payment breaks are available on a case-by-case basis as one of a suite of measures lenders offer to customers facing difficulties. The different lenders have options in place to support borrowers including for business borrowers and mortgage holders. These include interest only, partial payments or breaks to payments if appropriate.
Each lender will show flexibility and borrowers who need help with repayments or have concerns about their abilities to repay loans should contact their lender in the first instance. The Money Advice and Budgeting Service (MABS) is also available to help anyone who wishes to have an objective and non-judgmental discussion on their options.
I will continue to work with the Central Bank, as regulator, to ensure that the Central Bank consumer protection framework will be fully available to borrowers that will still need support due to the economic impact of Covid-19.
The Central Bank remains focused on ensuring that lenders are appropriately supporting borrowers whose incomes have been negatively affected by the pandemic. The Central Bank outlined its expectations to all lenders on how they should be supporting borrowers who are experiencing financial distress arising from the Covid-19 pandemic, and is supervising lenders to ensure that these expectations are met.
206. Deputy Marc MacSharry asked the Minister for Finance the position of eligibility to the new CRSS from sports clubs with a bar registered under the Clubs Act 1904 and so on as it seems the system of the Revenue Commissioners is refusing such applications; the reason this should be as the CRSS was projected as a replacement for the Department of Enterprise, Trade and Employment local authority reopening scheme which did apply to sports clubs; and if he will make a statement on the matter. [43055/20]
View answerThe CRSS is a targeted support for businesses significantly impacted by restrictions introduced by the Government under public health regulations to combat the effects of the Covid-19 pandemic. The support is available to companies, self-employed individuals and partnerships who carry on a trade or trading activities, the profits from which are chargeable to tax under Case I of Schedule D, from a business premises located in a region subject to restrictions introduced in line with the Living with Covid-19 Plan.
To qualify under the scheme a business must, under specific terms of the Covid restrictions, be required to either prohibit or significantly restrict, customers from accessing their business premises to purchase goods or services, with the result that the business either has to temporarily close or to operate at a significantly reduced level. Details of CRSS were published in the Finance Bill 2020 and detailed operational guidelines on the scheme have been published on the Revenue website at: https://www.revenue.ie/en/corporate/press-office/budget-information/2021/crss-guidelines.pdf.
Businesses whose trading profits are exempt from the charge to tax under Case I of Schedule D do not meet the eligibility criteria for CRSS.
A sports club that has been granted a sports body exemption (an approved sports body) is exempt from paying Corporation Tax or Income tax on any income received where the income is used for the purpose of promoting the game or sport. Such income would include income from a bar registered under the Clubs Act 1904 by a sports club. As an approved sports body is not chargeable to tax under Case I of Schedule D in respect of its trading profits, it will not qualify for CRSS. An approved sports bodies is not exempt from Value Added Tax (VAT) or payroll taxes and may be entitled to financial support under other measures put in place by the Government, including the Employment Wage Subsidy Scheme (EWSS). An approved sports body may also be eligible under the Debt Warehousing Scheme to ‘park’ certain VAT and PAYE (Employer) liabilities and any excess payments received under the Temporary Wage Subsidy Scheme (TWSS).
A sports club that does not have a sports body exemption and which has income, for example from a gym, bar or restaurant trade, subject to tax under Case I of Schedule D may be eligible for CRSS for periods of restrictions where that business meets the qualification criteria for the scheme. Under nationwide Level 5 restrictions which applied from 22 October 2020 to 1 December 2020, gyms, bars and restaurants were required to prohibit or significantly restrict customers from accessing their business premises, and therefore such businesses would have been eligible to register and claim for CRSS were the qualification criteria was met.
There has been an easing of restrictions on businesses, with a phased move to Level 3 restrictions nationally from 1 December, with some restrictions easing from 4 December and 18 December respectively. Since 1 December, gyms have been allowed to reopen for individual use and from 4 December, cafes, restaurants and bars which serve substantial meals prepared onsite are allowed to open for indoor dining. In most cases therefore, a gym, restaurant or bar serving substantial meals prepared on site, operating from the sports club premises were no longer required to prohibit or significantly restrict, customers from accessing their business premises from 1st or 4th December as appropriate, and therefore do not qualify for CRSS from that date.
Where a business is reopening after a period of restrictions, they will be eligible to claim an additional week’s support under CRSS (referred to as a ‘restart week’) to assist the business in meeting the costs of reopening.
207. Deputy Violet-Anne Wynne asked the Minister for Finance if he has spoken formally with his Czech Republic counterpart recently. [43091/20]
View answerI have not had a formal bilateral meeting with my Czech Republic counterpart, Alena Schillerová, in recent months. Both Minister Schillerová and I participate in monthly ECOFIN meetings, with the Finance Ministers of all 27 EU Member States, where there are group discussions. In addition, in my capacity as President of the Eurogroup, I chair meetings of Eurogroup in inclusive format, which includes non-Euro Area Member States such as the Czech Republic. These fora provide a valuable opportunity to regularly discuss and share views on key policy issues and economic developments in the EU.
209. Deputy Robert Troy asked the Minister for Finance when the legislative effect to the existing medical card criteria will come into effect (details supplied). [43189/20]
View answerThe Disabled Drivers & Disabled Passengers Scheme provides relief from VRT and VAT on the purchase and use of an adapted car, as well as an exemption from motor tax and an annual fuel grant. The cost of the scheme in 2019, excluding motor tax, was €72m.
The Scheme is open to severely and permanently disabled persons as a driver or as a passenger and also to certain organisations. In order to qualify for relief an organisation must be entered in the register of charitable organisations under Part 3 of the Charities Act 2009, be engaged in the transport of disabled persons and whose purpose is to provide services to persons with disabilities.
In order to qualify for relief the applicant must hold a Primary Medical Certificate (PMC) issued by the relevant Senior Area Medical Officer (SAMO) or a Board Medical Certificate (BMC) issued by the Disabled Driver Medical Board of Appeal. Certain other criteria apply in relation to the vehicle and its use, including that the vehicle must be specially constructed or adapted for use by the applicant.
The terms of the Disabled Drivers and Disabled Passengers (Tax Concessions) Regulations 1994 set out the medical criteria, and that one or more of these criteria is required to be satisfied in order to obtain a PMC.
A Supreme Court decision of 18th June found in favour of two appellants against the Disabled Drivers Medical Board of Appeal's refusal to grant them a PMC. The judgement found that the medical criteria set out in the Regulations did not align with the regulation making mandate given in the primary legislation to further define criteria for ‘severely and permanently disabled’ persons.
On foot of the legal advice received, it became clear that it was appropriate to revisit the six medical criteria set out in Regulation 3 of Statutory Instrument 353 of 1994 for these assessments. In such circumstances, PMC assessments were discontinued until a revised basis for such assessments could be established. The medical officers who are responsible for conducting PMC assessments need to have assurance that the decisions they make are based on clear criteria set out in legislation. While Regulation 3 of Statutory Instrument No. 353 of 1994 was not deemed to be invalid, nevertheless it was found to be inconsistent with the mandate provided in Section 92 of the Finance Act 1989.
In order to allow for the PMC assessments and appeals to recommence I brought forward an amendment to the Finance Bill to provide for the existing medical criteria in primary legislation. When the Bill is enacted, this will allow for assessments to recommence from the 1st January 2021 in circumstances where the legal basis for such assessments is clarified.
I consider this to be an interim solution only. While I am very aware of the importance of this scheme to those who benefit from it, I am also aware of the disquiet expressed by members of this house and others in respect of the difficulties around access to the scheme. With this in mind I have asked my officials to undertake a comprehensive review of the scheme, to include a broader review of mobility supports for persons with disabilities, and on foot of that review to bring forward proposals for consideration.
210. Deputy Seán Haughey asked the Minister for Finance his plans for reform for the motor insurance industry; if his attention has been drawn to the fact that some motor insurance companies are loading premiums in cases in which motorists move to an area of disadvantage and high density population; if actuarial data is made available to his Department which could be used to validate such loading; and if he will make a statement on the matter. [43223/20]
View answerAt the outset, it is important to note that neither I, nor the Central Bank of Ireland, can intervene in the provision or pricing of insurance products or have the power to direct insurance companies to provide cover to specific individuals or businesses. This position is reinforced by the EU framework for insurance (the Solvency II Directive) which expressly prohibits Member States from doing so. Consequently, I am not in a position to direct companies as to how they price their policies or what terms and conditions apply.
On a general level, my understanding is that insurers will use a combination of rating factors in making their individual decisions on whether to offer motor insurance cover and what terms to apply. For example, factors may include the driver’s age; relevant driving experience; the age and type of vehicle; how and where the vehicle is used; the claims record; the number of drivers; and the storage location. Insurers also price in accordance with their specific claims experience and do not use the same combination of rating factors. Accordingly, premium prices vary across the market, demonstrating why it is important for consumers to shop around on their insurance policies. The Deputy should also note that such actuarial data is confidential to each insurer and is not made available to my Department.
Notwithstanding this, I can assure the Deputy that insurance reform is a key policy priority as reflected in the Programme for Government. A Sub-Group of the Cabinet Committee on Economic Recovery and Investment was established by Government to oversee insurance reform implementation. This is chaired by the Tánaiste, and also includes as standing members, Ministers McGrath, McEntee, O’Gorman and myself, together with Ministers of State Troy and Fleming.
The Sub-Group has prepared an Action Plan for Insurance Reform, which was published by the Government last week. This Action Plan contains 66 actions across a number of Government Departments which aim to bring down costs for consumers and business; introduce more competition into the market; prevent fraud and reduce the burden on business, community and voluntary organisations. Actions will be undertaken and delivered by Ministers in the Departments of Enterprise, Trade and Employment, Finance and Justice over the next 18 months. The Sub-Group on Insurance Reform within the Cabinet Committee on Economic Recovery will meet regularly, engage with stakeholders and publish progress of the actions every six months.
With regard to the cost of motor insurance more specifically, I would draw his attention to data from the recent second National Claims Information Database Private Motor Insurance Report from the Central Bank. This shows that, after peaking in Q2 2018, the average earned premium for private motor insurance decreased by 9 per cent up to the end of 2019. I would reasonably expect that the next year’s report will show further reductions in the average earned premiums for private motor insurance into 2020. Separately, the Central Statistics Office in its recent November Consumer Price Index private motor insurance component shows that private motor insurance premiums have reduced by almost a third from their July 2016 peak. While for methodological reasons, these datasets are not directly comparable, both have indicated the same downward trend for some time.
211. Deputy Catherine Murphy asked the Minister for Finance the costs incurred by the State Claims Agency in respect of non-medical negligence claims over the time period 2018, 2019 and to date in 2020. [43226/20]
View answerThe State Claims Agency has prepared the below table in response to the information requested by the Deputy. The information in the table details the total amount paid from 01/01/2018 to 30/11/2020 across Damages, Legal and Expert costs in respect of non-medical negligence claims.
|
Transaction Bucket |
2018 |
2019 |
2020 (to End Nov) |
Grand Total |
|
Damages |
€ 43,871,551 |
€ 55,668,452 |
€ 37,575,352 |
€ 137,115,355 |
|
Legal Cost |
€ 26,783,094 |
€ 31,488,902 |
€ 31,014,182 |
€ 89,286,178 |
|
Expert Costs |
€ 7,986,757 |
€ 4,645,859 |
€ 4,075,858 |
€ 16,708,474 |
|
Grand Total |
€ 78,641,402 |
€ 91,803,213 |
€ 72,665,393 |
€ 243,110,008 |
212. Deputy Denis Naughten asked the Minister for Finance the way in which VRT for used imports pre-September 2018 will be calculated; if a circular will be published by the Revenue Commissioners; and if he will make a statement on the matter. [43263/20]
View answerI am advised by Revenue that used vehicles brought into the State and previously registered using the CO2 format known as NEDC will, from 01 January 2021, be registered based on the NEDC CO2 figure declared on the vehicle registration document issued in the previous jurisdiction with an added calculation to bring that CO2 figure in line with emissions under the WLTP, which was introduced for new vehicles in September 2018. Details relating to the formulae can be found on the Revenue Website at https://www.revenue.ie/en/importing-vehicles-duty-free-allowances/guide-to-vrt/calculating-vrt/calculating-the-nox-charge.aspx
213. Deputy James Browne asked the Minister for Finance the position regarding the review of an application by a company (details supplied); and if he will make a statement on the matter. [43291/20]
View answerThe Financial Provisions (Covid-19) (2) Act 2020 (Act No. 8 of 2020) inserted section 28B into the Emergency Measures in the Public Interest (Covid-19) Act 2020. This provides for the introduction of the Employment Wage Subsidy scheme (EWSS). The Deputy will be aware that EWSS is an economy-wide enterprise support that focuses primarily on business eligibility. The scheme provides a flat-rate subsidy to qualifying employers based on the numbers of eligible employees on the employer’s payroll and gross pay to employees.
- To qualify for the EWSS, as well as having tax clearance, an employer must be able to show that:
- the business will experience a 30% reduction in turnover or customer orders between 1 July and 31 December 2020, and
- Covid-19 is the cause of this disruption.
I am advised by Revenue that the turnover test is capable of being applied in the case of the business concerned. It appears from submissions made to Revenue by the business concerned that a reduction of 30% in ‘turnover’ or ‘customer orders’ between 01 July and 31 December 2020 (compared to the same period in 2019) is not expected and the eligibility criteria for the scheme will not be met and the company is, therefore, not eligible for the scheme.
For those who may not be eligible for the EWSS, I would draw attention to the comprehensive package of other business and employer supports that have been made available since the July Stimulus Plan and Budget 2021 - including the Covid Restriction Support Scheme (CRSS), the Credit Guarantee Scheme, the SBCI Working Capital Scheme, Sustaining Enterprise Fund, and the Covid-19 Business Loans Scheme.
214. Deputy Paul Murphy asked the Minister for Finance the taxes that will apply to used cars imported from the UK after 1 January 2021. [43373/20]
View answerI am advised by Revenue that used cars imported from the UK (not including Northern Ireland) post 1 January 2021 will be liable to Customs Duty and VAT on importation and Vehicle Registration Tax at the point of registration of the car.
215. Deputy Sean Sherlock asked the Minister for Finance the status of legislation to protect consumers on PCP. [43410/20]
View answerAs part of the review of the regulation of Personal Contracts Plans (PCPs), which I commissioned in 2018, Mr Michael Tutty produced a report entitled 'Review of the Regulation of PCPs' (available at: https://www.gov.ie/en/publication/5391e5-review-of-regulation-of-personal-contract-plans/).
The Tutty Report set out a number of conclusions and recommendations in relation to PCP agreements and, in particular, it recommended that the provisions of the Central Bank Consumer Protection Code which requires lenders to assess the suitability of the product for the consumer and also the ability of the borrower to repay the debt over the duration of the credit agreement should be extended to hire-purchase/PCP agreements.
The implementation of this particular recommendation to all the providers of hire purchase and PCP agreements will necessitate new legislation and I have obtained Government approval to draft a Bill to achieve this (see relevant press release attached: https://www.gov.ie/en/press-release/ab741f-minister-donohoe-announces-government-approval-to-draft-legislation-/). Officials in my Department are currently working with the Office of the Parliamentary Counsel and the Central Bank of Ireland to prepare the legislation and it is the intention of Government to publish this Bill as soon as possible.
216. Deputy Ged Nash asked the Minister for Finance the progress the Central Bank has been making in ensuring that all retail banks and payment services providers will be ready in time to implement the strong customer authentication requirements of the payment services directive 2 in time for 1 January 2021; if all retail banks will be ready in time; and if he will make a statement on the matter. [43426/20]
View answerThe revised Payment Services Directive (PSD2) of 2015 introduced strong security requirements for the initiation and processing of electronic payments, which apply to all payment service providers (PSPs). This approach is intended to reduce the risk of fraud for all types of electronic payments (especially online payments) and to protect the confidentiality of the user’s financial data.
Payment Service Providers are obliged to apply strong customer authentication (SCA) when a payer initiates an electronic payment transaction. Strong Customer Authentication under PSD2 requires the customer to go through two-factor authentication made up of elements from two of three separate categories: knowledge, possession, and inherence. SCA is a combination of something you know (a password or PIN), something you have (a card reader or token generator) and something you are (a fingerprint).
In an Opinion published on 16 October 2019 the European Banking Authority (EBA) set the final deadline for full compliance with SCA requirements at 31 December 2020. The EBA felt that this time should be sufficient for issuing and acquiring payment service providers and their merchants to migrate to SCA-compliant approaches and solutions.
Following the outbreak of Covid-19 earlier this year industry bodies from across the EU, including the Banking and Payments Federation of Ireland (BPFI), wrote to the EU Commission and the EBA seeking a further extension to the deadline for compliance with the SCA requirements. They outlined that Covid-19 was clearly having an impact on all sectors of the EU economy and that industry was unlikely to be able to meet the current deadline of 31 December 2020 for SCA migration.
On 8 December, in an effort to avoid significant disruption to payments, the BPFI announced plans for an industry ramp-up approach for the implementation of SCA. This approach means that payment card issuers will gradually ramp-up to full adoption of SCA, this ramp-up will incorporate value thresholds and the implementation of soft declines when processing card payments. This does not mean that payments for values below the ramp-up thresholds will all be approved and transactions will continue to be closely monitored for possible fraud.
Where a regulated payment service provider (PSP) is in a position to implement the requirements with effect from 1 January 2021, the Central Bank of Ireland expects them to do so, in a manner that does not cause customer detriment.
Through engagements with regulated PSPs on the progress of their SCA migration plans, the Central Bank is aware of some issues around the full implementation of SCA by 31 December 2020. The Central Bank has communicated to these PSPs that they are required to implement the Requirements as soon as possible in a manner that does not cause customer detriment.
As the deadline for SCA implementation approaches, Department officials will continue to work with the Central Bank and BPFI to minimise possible payment disruption experienced by consumers and merchants.
217. Deputy John Lahart asked the Minister for Finance if his attention has been drawn to an anomaly (details supplied) that may exist in the Finance Bill 2020; and if he will make a statement on the matter. [43531/20]
View answerPayments made under the Pandemic Unemployment Payment (PUP) are income supports and share the characteristics of income. The PUP follows the general taxation rule for social welfare type payments and, thus, is chargeable to income tax, but exempt from the USC and PRSI charges. This will be the case whether, prior to receipt of the PUP, the recipient was a PAYE worker or a self-employed individual.
The formal taxation arrangements for the PUP are being legislated for in Finance Bill 2020 and the legislation reflects the standard approach to taxation of social welfare benefits, including jobseekers benefit for the self-employed, which is to tax the benefits on an actual basis under Schedule E. In the absence of these changes, the payments would be taxable under Case IV of Schedule D, which would also be on an actual basis.
Being taxed on an actual basis means that for each tax year, recipients of the PUP are taxed on the payments that are actually received in the corresponding calendar year. This is the case regardless of the period for which a self-employed individual carrying on a trade or profession prepares his or her accounts for that trade or profession.
Revenue advise that self-employed individuals would be covered under the debt warehousing facility.
Self-assessed individuals, i.e. chargeable persons, who have income from non-PAYE sources are obliged to file a tax return and account for all their income including the PUP in their tax return. This is the case whether or not such individuals were in receipt of the PUP.
The 2020 tax return would be due to be filed by 31st October 2021, and any balance of tax owing would normally be due to be paid at the same time.
However, there is also a provision in the Finance Bill which expands the debt warehousing scheme to include taxpayers who self-assess for income tax. The scheme is available to any self-assessed taxpayer who expects that her/his income for 2020 will be more than 25% lower than her/his income for 2019 and as a result s/he is unable to pay the balance of income tax for 2019 and Preliminary Tax 2020.
Where a taxpayer is eligible for warehousing, collection of these liabilities may be suspended for a period of 12 months from 31 October / 10 December, as appropriate. Warehoused liabilities will be subject to no interest for this 12 month period and a reduced interest rate of c. 3% per annum thereafter until paid in full.
If income for 2021 is also more than 25% lower than income for 2019, the balance of 2020 Income Tax and Preliminary Tax for 2021 may be warehoused.
218. Deputy John Lahart asked the Minister for Finance if his attention has been drawn to an anomaly (details supplied) that may exist in relation to the July Stimulus package and a 2020 tax return; and if he will make a statement on the matter. [43533/20]
View answerI understand that the Deputy is referring to the accelerated loss relief provisions that I introduced earlier this year to assist companies and self-employed individuals that have been adversely impacted by the COVID-19 pandemic and related restrictions. I understand that the anomaly suggested by the Deputy does not arise and that Revenue has confirmed the position in its published guidance.
The loss relief can be of relevance to both businesses liable to income tax (such as sole traders) and those liable to corporation tax.
Dealing with income tax first, section 10 of the Financial Provisions (Covid-19) (No. 2) Act 2020 introduced a new Chapter 2A ‘Income tax: Covid-19 loss relief’ in the Taxes Consolidation Act 1997 (‘TCA 1997’). This provides for a number of temporary income tax measures to assist self-employed individuals. Section 395A TCA 1997 provides for income tax relief for losses incurred in the period 1 January 2020 to 31 December 2020 by individuals carrying on a trade or profession, either as sole traders or in partnerships. Where a self-employed individual incurs losses in a basis period ending in 2021, relief will be available where part of those losses were incurred in the period 1 January 2020 to 31 December 2020.
Specifically, the section provides that where, in a tax year, an individual carrying on a trade or profession:
- incurs a loss which would be available to carry forward to the following tax year, and
- all or part of the loss is incurred in the period 1 January 2020 to 31 December 2020,
then the individual may claim to have any part of the loss that is incurred in the period 1 January 2020 to 31 December 2020 carried back and set off against the profits of the same trade or profession for the tax year 2019.
This is a once-off measure targeted at otherwise viable businesses that were profitable in 2019 but who have incurred losses in 2020 as a result of the initial response to Covid-19 pandemic. It is not an on-going loss relief measure, so the look back period solely relating to 2019 as the pre-pandemic period is appropriate in this context. Further, the provision made in the July Stimulus Package of €150m relating to the estimated 280,000 potential beneficiaries was based on this approach.
Subject to meeting certain conditions, self-employed individuals may make an interim claim for relief in respect of an estimated amount of the relief that will be due to them under section 395A. Similar provisions apply in respect of unused capital allowances relating to the period 1 January 2020 to 31 December 2020. The maximum amount of relief that an individual may claim in respect of losses and capital allowances is capped at €25,000. Revenue have published examples of the operation of the relief in the Tax and Duty Manual Part 12-01-03, which is available on Revenue’s website.
Turning now to corporation tax, section 11 of the Financial Provisions (Covid-19) (No. 2) Act 2020 introduced a new section 396D in the TCA 1997. The provision allows companies, subject to certain conditions, to make a claim to carry back up to 50% of their estimated trading losses incurred in an accounting period, which contains some or all of the period 1 March to 31 December 2020, against their profits of the preceding accounting period.
Under normal rules, this carry back would not take place until up to nine months after the end of the loss-making accounting period, when the corporation tax return is filed. The accelerated corporation tax loss relief allows claims to be made (and revised if necessary) at any time from four months into the loss-making accounting period and up to five months after the end of that accounting period. This significantly accelerates the tax repayments to companies that can be generated from the offset of these losses against previously taxed profits. The balance of the loss will be available for carry back in due course under normal rules, when accounts have been prepared after the end of the company’s accounting period and a corporation tax return has been filed.
Therefore, provided it satisfies the relevant conditions, a company with a 12-month accounting period ending in 2021 will be allowed to project the trading loss that it expects to suffer in its 2021 tax year and to lodge an early claim for carry-back of half of that expected loss against taxable profits of its 2020 tax year. Revenue’s Tax and Duty Manual Part 12-03-05, which is published on Revenue’s website, contains examples in this regard.
219. Deputy Gary Gannon asked the Minister for Public Expenditure and Reform the status of the reopening of the Fitzgibbon Street Garda station that was due in 2020; and if he will make a statement on the matter. [43524/20]
View answerThe works to Fitzgibbon St Garda Station are being carried out in two phases. The first phase, which involved mainly external works, was completed in 2019. The second phase works commenced on site in January 2020 and are currently scheduled to be completed in March 2021.
220. Deputy Michael Healy-Rae asked the Minister for Public Expenditure and Reform the status of a closed Garda station (details supplied) in County Kerry if it is still in the possession of the State; and if he will make a statement on the matter. [42875/20]
View answerThe former Garda station at Kilgarvan, Co. Kerry closed in 2013 as part of An Garda Síochána’s 2013 Policing Plan.
I am advised by the Commissioners of Public Works that all surplus State owned properties, including the former Garda station at Kilgarvan, are treated in line with the disposals policy of the Office of Public Works (OPW).
The OPW's disposals policy with regard to non-operational (vacant) State property is to:
1. Identify if the property is required/suitable for alternative State use by either Government Departments or the wider public sector.
2. If there is no other State use identified for a property, the OPW will then consider disposing of the property on the open market if and when conditions prevail, in order to generate revenue for the Exchequer.
3. If no State requirement is identified, or if a decision is taken not to dispose of a particular property, the OPW may consider community involvement (subject to a detailed written submission, which would indicate that the community/voluntary group has the means to insure, maintain and manage the property and that there are no ongoing costs for the Exchequer).
The OPW received a submission from Kilgarvan Community Development in July this year requesting use of the former Garda Station for community purposes. Having considered the above alternative State use and disposal options, I understand that my officials have agreed to licence the property to Kilgarvan Community Development. The matter is currently with the Chief State Solicitors Office who will shortly issue the licence for signing by the relevant parties.
221. Deputy Denis Naughten asked the Minister for Public Expenditure and Reform if retired public servants will receive an increase under the national wage agreement; and if he will make a statement on the matter. [42992/20]
View answerIn 2017 the Government agreed the policy on public service pensions in payment for the period to end 2020 as follows:
- An equitable approach must be adopted for the various public service pensioner cohorts who are not only differentiated by amount of pension in payment (determined by grade and service) as heretofore but also by date of retirement (in particular pre and post end February 2012).
- Accordingly for those who retired or will retire post end-February 2012, to the extent that they retired on reduced salaries, they will receive pension increases in line with the pay increases due to their peers in employment.
- When alignment is achieved between pre and post end-February 2012 pensioners, pay increases will continue to benefit pensions in payment.
The above approach was intended to deal with the ongoing complexities which arise as FEMPI pay related provisions are unwound. Given that this process of unwinding of FEMPI pay reductions will be ongoing over 2021 to 2022 as per sections 19 and 20 of the Public Service Pay and Pensions Act 2017, the requirement for equitable treatment, as outlined above, will continue to arise over this period. Accordingly, the above arrangements will remain in place to end 2022 in advance of which I will consider the future policy approach on this issue.
