I propose to take Questions Nos. 58 and 88 together.
In March this year, Revenue announced that it was suspending debt collection and the charging of interest on late payment for the January/February and March/April 2020 VAT periods and the February, March and April 2020 PAYE (Employer) periods, which has been extended to include the May/June 2020 VAT period and May and June 2020 PAYE (Employer) liabilities. These arrangements are available to all businesses experiencing tax payment difficulties as a result of the Covid-19 pandemic, including professionals such as dentists who have been unable to trade due to Covid-19. However, the VAT measure would not be relevant to dentists, whose activity is exempt from VAT (under Schedule 1 Paragraph 2(5) of the Value-Added Tax Consolidation Act 2010).
These measures are currently being operated by Revenue on an administrative basis. Legislation will be introduced in due course to put the scheme on a statutory footing and to provide for a reduced statutory interest rate that will apply to payment of the warehoused debts:
- 0% for the “Covid-19 restricted trading phase”, the period when the business is unable to trade due to the Covid-19 related restrictions, and including the first two months after the business resumes trading;
- 0% for the “zero interest” phase, which lasts for 12 months after the end of the first phase;
- 3% per annum for the “reduced interest phase”, which begins after the end of the second phase
The warehousing measures currently operated by Revenue on an administrative basis, as well as the reduced statutory interest rate, are important support measures aimed at assisting all businesses, including dentists and other sole traders, who have been adversely affected by Covid-19.
Where a dentist or other professional is an employer, s/he may have availed of the Temporary Wage Subsidy Scheme (TWSS) to make payments to employees. This was provided for in section 28 of the Emergency Measures in the Public Interest (Covid-19) Act 2020. The TWSS builds on data returned to Revenue through its real-time PAYE system. The core principles of the scheme are that:
- the business is suffering significant negative economic impact due to the pandemic,
- the employees in respect of whom the wage subsidy is claimed were included on the employer’s payroll on 29 February 2020,
- the February 2020 payroll submissions were submitted to Revenue before 1 April 2020, and
- the payroll submissions for all previous months were submitted to Revenue before 15 March 2020.
The TWSS is predicated on the employer wanting to keep the employees on the payroll and to retain them until business picks up. The amount of the subsidy for each employee is calculated based on the average net weekly pay reported for January and February 2020. Regarding the subsidy amount, no distinction is made based on whether the business has closed due to Government restrictions or has continued to trade with employees continuing to work part-time or full-time with similar hours as before the Covid-19 pandemic.
As regards the personal tax liability of dentists or other self-employed individuals, a self-assessed income taxpayer is required to pay preliminary tax by 31 October in a year, or later if paying online via the Revenue Online Service (ROS). The amount of the payment is
- 90% of the current year’s liability;
- 100% of the prior year’s liability; or
- 105% of the tax due for the tax year preceding the immediately previous tax year (often called the ‘pre-preceding year’).
The “pre-preceding year” option only applies to taxpayers paying by direct debit. Taxpayers not paying by direct debit can choose the lower of the other two options; in most cases 90% of this year’s liability is likely to be considerably less than the previous year’s liability.
In addition, Revenue has confirmed that, to accelerate interim refunds of Professional Services Withholding Tax (PSWT) during the Covid-19 pandemic, they will accept refund claims via MyEnquiries where legible copies of the original F45 and F50 documents are attached.
Full details are available at https://www.revenue.ie/en/corporate/communications/covid19/revenue-services.aspx
Finally, sole traders may be eligible to apply to the Department of Employment Affairs and Social Protection for the COVID-19 Pandemic Unemployment Payment scheme.