The Deputy will be aware that, since the COVID-19 pandemic started, the Revenue Commissioners have regularly reviewed all COVID-19 related matters. They have also published guidance to assist taxpayers in meeting their tax obligations and to make them aware of the additional supports that the Government has introduced.
The Revenue Commissioners inform me that taxable trading and professional income is computed based on accounting profits as adjusted to conform with tax law. While tax law specifically disallows deductions for certain expenses, the central test of deductibility is whether the expense has been “wholly and exclusively laid out or expended for the purposes of the trade or profession”. Therefore, where businesses incur COVID-19 related costs of a revenue nature and where those costs were incurred to allow the business to carry on its trade or profession, they will be deductible in computing taxable profits. In addition, eBrief No. 004/21 confirmed that no benefit-in-kind charge will arise for employees in respect of COVID-19 testing where the conditions outlined in that eBrief are satisfied. This concessional benefit-in-kind treatment will remain in place until the Revenue Commissioners advise otherwise.
However, while tax law may permit a deduction for these costs, it is vital that all businesses fully comply with the Government’s Resilience and Recovery 2020 – 2021: Plan for living with COVID-19. As the Deputy is aware, this Plan sets out five levels that correspond to the severity of COVID-19. Under the current Level 5 public health restrictions, all employees should be facilitated to work from home, unless their work is an essential health, social care or other essential service that cannot be done from home. I would urge all employers to follow the latest public health advice and encourage them to make use of the relevant guidance such as that published by the Health and Safety Authority.