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Debt Warehousing

Overview Revenue recently issued new guidance surrounding the debt warehousing of VAT, PAYE and Income Tax liabilities arising during a specified period of time and also the recovery of any overpayment of amounts received under the Temporary Wage Subsidy Scheme and Employee Wage Subsidy Scheme. We have set out a summary of the updated guidance below.  Details of the Scheme VAT and PAYE All VAT and PAYE liabilities arising during the pandemic can automatically be warehoused up until 31 December 2021 without the application of interest for businesses dealt with in the Personal and Business Division of Revenue. Businesses dealt with by the Large Corporates and Medium Enterprises Divisions of Revenue would need to apply to Revenue for inclusion in the scheme due to a reduction in trade.  There are 3 distinct periods outlined in the scheme;
  1. Period 1 - COVID-19 restricted trading phase
This period begins since the company first experienced cash flow trading difficulties due to the pandemic. For VAT this can apply as early as 1 January 2020 and for PAYE this can apply as early as 1 February 2020. This period ends on 31 December 2021.  Relevant tax debts incurred during this period can be warehoused. Relevant debts include the VAT and payroll liabilities arising when the business was restricted by the Covid pandemic (i.e. either stopped or significantly reduced).  During this period the interest rate being applied to unpaid liabilities is 0%. 
  • Period 2 – Zero interest period
This period runs from 1 January 2022 to 31 December 2022. During this period, the Interest rate being applied to unpaid liabilities is 0%.
  • Period 3 – Reduced interest period
This period begins in January 2023 and ends when the liabilities are paid. Interest at a rate of 3% is applied during this time.  Anyone availing of the debt warehousing scheme should contact Revenue with a repayment plan for warehoused debt before 31 December 2022. The repayment plan will be mutually agreed between Revenue and the taxpayer.  Returns should continue to be filed during this period. Income Tax Income Tax payments which fell due on 31 October 2020 and those falling due on 31 October 2021, subject to certain criteria, can avail of the debt warehousing scheme. The Income Tax liabilities affected are the 2019 Income Tax year balancing payment, Preliminary Tax and balancing payment for the 2020 Income Tax year and Preliminary Tax for 2021 Income Tax Year.  A declaration must be made to Revenue at the time of filing the return that total income for 2020 and 2021, as applicable, is expected to be at least 25% less than total income for 2019. The Income Tax Warehousing scheme contains 3 distinct periods, as follows;
  • Period 1 - COVID-19 restricted trading phase
This period runs from 31 October 2020 for paper returns or 10 December 2020 returns filed on ROS (in relation to their 2019 income tax returns) until 31 December 2021. This also applies for 2020 income tax returns that are due for filing on 31 October 2021 for paper returns and 17 November 2021 for returns filed on ROS.
  • Period 2 - Zero interest period
This period runs from 1 January 2022 to 31 December 2022. During this period, the Interest rate being applied to unpaid liabilities is 0%.
  • Period 3 - Reduced interest period
This period begins in January 2023 and ends when the liabilities are paid. Interest at a rate of 3% is applied during this time.  Anyone availing of the debt warehousing scheme should contact Revenue with a repayment plan for warehoused debt before 31 December 2022. The repayment plan will be mutually agreed between Revenue and the taxpayer. Income Tax Returns should still be filed before the filing deadlines of 31 October 2021 for paper returns or 17 November 2021 for returns filed on ROS. TWSS and EWSS The TWSS/EWSS warehouse scheme is available to employers who are obliged to refund amounts which are deemed to be overpayments of TWSS/EWSS following a reconciliation process undertaken by Revenue, and who are unable to refund these amounts because of the impact of COVID-19. The warehousing scheme for TWSS and EWSS is the same as the warehousing scheme put in place for PAYE & VAT. One of the most important aspects of the scheme for businesses is to ensure all tax returns are kept up to date while availing of the scheme. It is also important to monitor the interest free period as a payment arrangement would need to be put in place with Revenue in advance of the end of Period 2. Roberts Nathan tax team can help with all compliance requirements and liaising with Revenue while our corporate finance team can assist on cash flow management in order to assist on putting a payment schedule in place.
July 23, 2021

BRSS Scheme

Revenue have recently published guidance on the new Business Resumption Support Scheme. Applications for this scheme can be made between 1 September and 30 November 2021. The scheme provides a once off payment to cover trading expenses of businesses which have reopened for business but have still seen turnover facing a significant decrease from pre-Covid times. The scheme will be available for corporates, individuals or partnerships that are actively trading.  Any business claiming the relief must not be entitled to claim the CRSS from 1 September 2021. Therefore, this scheme should be available for many non-essential retail providers that were forced to remain closed until 17 May 2021 but have now reopened for business.  The scheme will provide a once off payment up to a maximum of €15,000. To qualify under the scheme, a business must be able to demonstrate that the turnover from its trade, in the period from 1 September 2020 to 31 August 2021, will be no more than 25% of a reference turnover amount. This reference amount will be the turnover for the calendar year 2019 for any longstanding business.  The payment will be calculated as three times the sum of 10% of their average weekly turnover from 2019 up to €20,000, and 5% of any excess of average weekly turnover above €20,000. Subject to a maximum payment amount under the scheme of €15,000. Therefore a company with an average weekly turnover in 2019 of at least €80,000 should be in a position to claim the full €15,000.  As with other Covid supports the business must have a good tax compliance record and have an active tax clearance certificate. The application for the BRSS will be made via ROS and we would be happy to provide businesses with any advice and assistance needed in relation to the application using our details in the link provided.  https://www.robertsnathan.com/member/brendan-murphy/
July 19, 2021
  Business Advice

Covid Restriction Support Scheme

As many businesses begin reopening their doors this week, the Revenue have confirmed those eligible for the Covid Restriction Support Scheme should be able to avail of two weeks double payment of the scheme in order to assist with restarting their businesses. See details of the Revenue press release here. As Revenue have reiterated in recent times, all reliefs such as the CRSS require up to date tax clearance certificates which mean the taxpayer must have all tax returns filed and payments made or debt arrangements agreed. At Roberts Nathan we continue to assist our clients both applying for and maintaining Covid reliefs. Feel free to contact us if you wish to discuss any Covid supports or any issues arising for your business as the economy reopens over the coming weeks.
May 12, 2021
  Business Advice

RN Podcast: 2021 – What is in store for the Irish tax landscape in the year ahead

Vivian Nathan, Managing Partner, welcomes Brendan Murphy, Tax Partner, to Roberts Nathan. Brendan joined the firm at the beginning of 2021 to continue the firms expansion and our commitment to providing our clients with dedicated specialist within specific sectors. On this podcast, Viv and Brendan discuss the opportunities Brendan sees for businesses from a tax perspective in the year ahead and what will be the key areas of focus for tax advisors. They also look at the impact to date of Brexit and how this will continue to effect trading between Ireland and the UK. Finally they will look at the cost Covid-19 is having on the Irish economy and what the future Irish tax landscape may look like.
We hope you enjoy listening to our podcast and if you have any questions regarding any of the points raised please let us know.
April 19, 2021

Aidan Scollard appointed as Chair of BITA

Congratulations to Aidan Scollard, Partner with Roberts Nathan on his appointment as Chair of the Dublin Chapter of the British and Irish Trading Alliance (BITA). The British and Irish Trading Alliance is an exciting non-profit networking organisation with a vibrant community of businesses that are invested in each other's success. BITA host networking, educational and social events online and in venues across all chapters in the UK and Ireland, and have a Global Forum which includes the USA and Australia. Their mission is to help more people and influence further; as a collective. Commenting on his appointment, Aidan Scollard said: “I am delighted to be involved in BITA at an especially important point in time in the UK / Ireland business relationship. As I have actively been involved in assisting Irish and UK companies expand in each other’s jurisdiction for a number of years I am pleased to be appointed and help to drive this continued interaction of business owners and to grow the alliance.
April 12, 2021
  Business Advice

UK Businesses – Do you have the correct Irish VAT number?

Check your VAT number VIES VAT number validation
No, invalid VAT number for cross border transactions within the EU
Since June 2019, companies registering for VAT have had to specify whether they wish for a “domestic only” or “intra-EU” VAT registration. The domestic only registration has helped speed up registration process for business seeking to register for VAT however, we have seen a number of instances where businesses are unaware of the need to include an intra-EU registration within their application. In particular we have noted many UK businesses applying for Irish VAT numbers on the basis of being a non-resident company with operations in Ireland and obtaining an IE VAT reg.  If the company is importing goods into Ireland for domestic only supply, then the domestic VAT registration is sufficient and they are charged Irish VAT at the point of importation of the goods into the EU.  Thus the domestic VAT registration applies only if the company is importing goods into Ireland, storing and distributing them here and not further distributing outside of Ireland. However if your company is looking to use Ireland as a new trading base in dealing with EU customers this will not be an effective VAT number for EU wide trading. So check your VAT number.  If you get the above message on the VIES system then it is only a domestic VAT registration. This will cause issues if you are bringing goods into Ireland and then intending to export them to another EU country as you will need to apply for an intra-EU VAT number.  It will be the exact same number but will need to be validated as otherwise your customers will get the above notice when the VAT number is checked for EU trading.  This causes an issue for your EU customers as you will not have issued a valid VAT invoice. We have helped a number of clients with this by amending their VAT registration and getting the option for intra-EU VAT registration. This requires additional information for Revenue which we can assist with. If you would like to explore further options around your business, please contact Brendan Murphy who would be very pleased to assist you. Brendan Murphy:
March 31, 2021

Overcoming Brexit; Case Studies on Overcoming Difficulties

In recent months we have been delighted to continue to help a number of UK businesses across various industries who approached us to assist them in dealing with the harsh realities Brexit has brought them. Below are three separate case studies of how we have helped.   Brexit Case Study 1: UK Based Food Processing Business Supplying High-Quality Goods to High Street Retailers. We provided assistance, including commercial and tax planning advice to a UK food manufacturer, who recently established a subsidiary company in Ireland. This enabled that company to continue trading with its EU customers in a straight forward and frictionless way. The Irish subsidiary company now handles all of the EU export business which had previously been operated by the UK parent company prior to Brexit on the 31st December 2020. As of January 2021, the manufacturer of goods for export to the EU was transferred to an outsourced food production facility in Ireland. A significant increase in jobs is now anticipated at that food processing facility because of this. This restructuring of the trading activities of the British company has helped to ensure that their existing EU market was held intact. The company believes that the Irish-based subsidiary, as an EU business entity in its own right, will enable the continued growth of the group's EU market. They strongly contend that future sales growth in Europe will be easier to achieve in this way, rather than through its UK-based marketing activities alone. The advice and guidance we were able to provide our new client, played a significant role in helping this UK company to evolve in a manner that enabled it to avoid the difficulties presented by Brexit.   Brexit Case Study 2: UK Based Fashion Exporter Supplying High Street Fashion Retails In Ireland and in Europe Up to recently, a UK wholesaler of high-end fashion clothing sourced all of their clothing products from outside the EU. Following Brexit, a difficulty arose regarding import duties because the country of origin of the goods is China. On this basis, import duty is applied on the export of such fashion goods from the UK company to its existing EU customers. The company found itself in a very difficult situation as it would have been forced to absorb the additional duty as part of its costs, giving rise to a significant reduction in the profit margin of the EU sales. In order to overcome this issue, the UK company established a subsidiary company in Ireland which instead, from February 2021, imports the goods from China into Ireland and in turn exports them to the existing EU customer base. We were very pleased to provide assistance to this client in terms of the commercial and taxation issues relating to the restructuring of the UK company's activities following the negative impact of Brexit.   Brexit Case Study 3: UK-based Supplier of Machinery Parts and Equipment to Municipal Entities in Europe. A UK-based equipment and parts supply company derived a high proportion of its revenues from its European customer base.  The goods it supplied were all sourced from within the EU as well. Prior to Brexit, the company was in a position to avail of Triangulation for VAT purposes, this is a simplified VAT mechanism available to EU member states where all three EU businesses involved in a transaction are VAT registered. Following Brexit, the UK company failed to qualify for the benefits of triangulation, giving rise to significant VAT difficulties. We were very pleased to of been of assistance to the company by providing them advice that allowed them to circumvent the problems they were faced with.   If you would like to explore further options around your business, please contact Peter Roberts or Tomas O’Leary who would be very pleased to assist you. Peter Roberts: peter.roberts@robertsnathan.com or Tomas O’Leary: tomas.oleary@robertsnathan.com Tel: +353214217940
February 19, 2021