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Covid-19 Pandemic Supports

Dáil Éireann Debate, Wednesday - 31 March 2021

Wednesday, 31 March 2021

Questions (400)

Imelda Munster

Question:

400. Deputy Imelda Munster asked the Minister for Finance the estimated cost of extending the tax warehousing scheme by one year for the tourism and hospitality industry. [17620/21]

View answer

Written answers

I am advised by Revenue that the current tax warehousing schemes allow for the deferral of collection of certain tax liabilities relating to “Period 1”, the “Covid-19 restricted trading period”. The tax liabilities that may be deferred or “warehoused” are VAT, PAYE (Employer) liabilities, excess Temporary Wage Subsidy Scheme (TWSS) payments due to be refunded to Revenue by employers, and certain self-assessed income tax liabilities.

To be eligible for income tax warehousing, taxpayers have to declare that they estimated their total income for 2020 would be at least 25% less than their total income for 2019 and where applicable, that their total income for 2021 will be at least 25% less than their total income for 2019.

In the case of VAT, PAYE (Employer) and excess TWSS liabilities, Period 1 refers to the period when a business has been unable to trade due to the Covid-19 related restrictions and includes the first full two monthly VAT period after the business resumes trading.

Revenue has confirmed that where a business re-opened but has had to close again due to the re-imposition of restrictions, the trade is deemed to be still subject to the restrictions provided for in the regulations under sections 5 and 31A Health Act 1947 until it has re-opened again. This means that VAT, PAYE (Employer) and excess TWSS liabilities for such businesses can continue to be warehoused in respect of the extended restricted period.

The end date for Period 1, and consequently the period for which liabilities can be warehoused, will vary from business to business depending on the restrictions affecting that business. However, in all cases, Period 1 will include the duration for which a business is subject to trading restrictions plus the first full VAT period after the restrictions have been lifted and the business resumes trading.

It is not possible for Revenue to forecast the future cost of this scheme due to the uncertainty surrounding future restrictions.

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