Covid-19 : Business Support 22.05.20 – Update 34
We have updated our ROI Business Support summary document (click here) for the recent developments on the Coronavirus business support initiatives available, some of which have been circulated in recent emails. This includes:
o Announcements from the Revenue in relation to:
- deferment of VAT and PAYE – the charging of interest on late payments is suspended (automatically for SMEs and on request for larger businesses) for May and June PAYE (Employers) liabilities normally due in June and July respectively and May/June VAT liabilities, normally due in July.
- introduction of a Debt Warehousing Scheme – on 2nd May 2020, the Government announced that it will legislate to provide that Revenue will warehouse deferred tax debts associated with the Covid-19 crisis. The proposed scheme will involve the effective parking of these unpaid VAT and PAYE (Employer) tax debts, that arose from the Covid 19 crisis, for a period of 12 months after a business resumes trading and the application of a lower interest rate of 3% per annum on the repayment of such ‘warehoused tax debts’ after that date.
- corporation tax returns – surcharge for late submission: the application of a surcharge for late CT1 Corporation Tax returns and iXBRL financial statement (where applicable) for accounting periods ending June 2019 onwards (ie. Due by 23 March 2020 onwards is suspended until further notice.
- temporary measures for close company surcharges – Section 440 of the Taxes Consolidation Act 1997 (TCA) provides for an additional charge to corporation tax on close companies. This surcharge is 20% of the excess of the sum of the distributable investment income and the distributable estate income of an accounting period over the distributions made for that period. In cases where a distribution is not made within that time in response to Covid-19 circumstances affecting the company, Revenue will, on application, extend the 18-month period for distributions by a further 9 months.
- R&D tax credits – Revenue will expedite the payment of any instalment of excess R&D tax credit that is due to be paid in 2020, bringing forward payment in advance of the date provided by Section 766 of the Taxes Consolidation Act 1997. This means that R&D tax credit instalments due for FY2017 and FY 2018, together with FY2019 first instalment, will be expedited by Revenue once the FY 2019 corporate tax return has been submitted.
- Zero rated vat – Revenue will allow the application of the zero rate of VAT to the supply to the HSE, hospitals and other health care settings of personal protection and specified medical equipment for use in the treatment of patients with Covid-19. This concessional treatment will apply from 9 April 2020 up to 31 July 2020;
- Benefits in kind – Revenue has released guidance in respect of the treatment of various benefits in kind during the period of the pandemic.
o New funding supports to assist businesses to move to the next phase of the pandemic in line with the recently announced 5 stage plan including:
- COVID-19 Credit Guarantee Scheme – a €2 billion extension to the existing Credit Guarantee Scheme to support lending to SMEs for terms ranging from 3 months to 6 years, which will be below market interest rates.
- Pandemic Stabilisation and Recovery Fund – a €2 billion fund within the Ireland Strategic Investment Fund (ISIF), which will make capital available to medium and large enterprises.
- Restart Fund – a €10,000 restart grant for micro and small businesses based on a rates/waiver rebate from 2019.
- Extension to the existing Enterprise Ireland Sustaining Enterprise Fund to include:
- Fund for Small Enterprise – this fund will provide a €25k to €50k short term working capital injection to eligible smaller companies to support business continuity and strengthen their ability to return to growth and be trading strongly in 3 years time;
- Fund for High Potential Start-Up (HPSU) companies – aimed at High Potential Start-Up (HPSU) companies who, due to the Covid-19 pandemic are facing delays to projected sales growth and whose fundraising plans are significantly impacted or stalled. Under this fund, HPSUs can apply for co-investment of €50,000 per undertaking in the form of equity or convertible debt instruments; and
- Fund for Innovative High Potential Start-Up (HPSU) companies – Equity investment of up to €800,000 on a co-funded basis, is available for innovation-led high potential start-ups (HPSUs), that are developing and commercialising new or substantially improved technologies, products, processes or service offerings.
o Updates to the Temporary Wage Subsidy Scheme – as detailed in our previous emails, the department announced updates to the scheme to partially address some imperfections and anomalies arising, including the fact that lower paid workers could potentially receive a higher amount if they were laid-off and received the COVID-19 pandemic unemployment payment and the fact that individuals earning over €76,000 have been excluded from the scheme.