Income Tax Debt Warehousing – Can you avail of it?

The online income tax filing deadline for the year ended 31 December 2019 was recently extended to the 10th of December.  Payments to cover the balance of income tax due for 2019 and preliminary tax for 2020 are also due to be lodged with Revenue by the 10th of December. 

Unfortunately, the most self-assessed tax payer will have seen their incomes eroded in 2020 and cashflow is of critical importance in keeping a business open.  With this in mind taxpayers should consider whether they can avail of the income tax debt warehousing scheme introduced by Revenue.   

In order to qualify for the scheme, the taxpayer must make a declaration to Revenue stating that their total income for 2020 is expected to be at least 25% less than the total income for 2019. 

Once the taxpayer qualifies for debt warehousing the following applies: 

  • For customers filing on Ros an interest charge will not be levied on any outstanding taxes from the 10th of December 2020 to the 9th of December 2021. 
  • Any taxes outstanding at the 10th of December 2021 will be subject to a reduced interest rate of 3% until the tax is paid.   

If a taxpayer has outstanding debts at the 10th of December 2021 it is important that they contact Revenue before this date to agree a repayment plan in respect of the debt. 

To qualify for the scheme, it is important that the taxpayer continues to file all their tax returns in a timely fashion.  Tax clearance will not be affected if the warehouse scheme is availed of. 

If you have any queries regarding the scheme or wish to avail of the scheme please contact either Gordon, Gerry, Eamonn or Gillian in the tax team. 

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    Posted on November 23, 2020 by Eamonn Madden

    VAT & Customs – BREXIT IMPLICATIONS

    While the trade deal between the EU and UK is still far from clear as of November 2020, there is certainty around tax changes that are happening on 1 January 2021. 

    On 31 January 2020 the UK left the EU and entered into an 11-month transition period. 

    From 1 January 2021 the UK will no longer be in the EU customs union and single market. 

    VAT – Republic of Ireland and Northern Ireland 

    Northern Ireland (NI) will remain part of the UK VAT regime but EU VAT rules for goods will continue to apply. Therefore, from 1 January 2021 the current VAT treatment should continue to apply to trade in goods between Republic of Ireland (ROI) and NI. 

    However, the position regarding services is different. UK VAT rules apply to NI services provided to EU customers.

    VAT – Republic of Ireland and Great Britain 

    Sales of goods from ROI to GB will be treated as exports from Ireland and will fall to be Zero rated for VAT. The responsibility for UK VAT will fall on the UK importer. 

    UK imports of goods will be subject Irish VAT at point of import. This VAT will be the liability of the importer. The Irish Government has stated that it will introduce postponed accounting for VAT on imports carried by Irish VAT registered businesses in the event of a no-deal Brexit. 

    Customs – Republic of Ireland and Northern Ireland 

    EU customs rules will continue to apply to NI, so no customs controls, declarations or tariffs will be required for the movement of goods between NI and ROI. 

     

    Customs – Republic of Ireland and Great Britain 

    From 1 January 2021 customs duties will apply on goods traded between GB and ROI (and the EU) Unless a Free Trade Agreement (FTA) is reached between the UK and the EU.  

    If an FTA is reached between the UK and the EU, reduced or zero tariffs will apply to goods that are of UK or Irish/EU origin. 

    Where an FTA is not reached between the UK and the EU: 

    • Any goods imported into GB from ROI will be subject to the UK’s new Global Tariff schedule 
    • Any goods imported into ROI from GB will be subject to the EU’S Common External Tariff 

    The UK Government plan to introduce customs controls on goods arriving from Ireland/EU on a phased basis up to 30 June 2021. 

    The EU have declared that normal customs procedures will apply from 1 January 2021, to goods being imported into the EU. 

    Brexit Actions which businesses need to urgently consider 

    1. Review your supply chain and understand the potential impact 

    2. Review contracts to see if change is required 

    3. Apply to Revenue and HMRC for an EORI number, this is required to operate within the customs    regime 

    4. Clarify rates of Customs Duty applicable to your goods (CN Code) 

    5. Who will file customs declarations (inhouse or customs agent) 

    6. Identify any customs authorisations or simplifications that apply 

    7. Understand your obligations under HMRC rules (UK) 

    8. Understand your obligations under the Irish (EU) rules 

    Overview 

    Without doubt, the Brexit changes coming on 1 January 2021 will impose extra administration and cost on businesses. This is a fact, regardless of what agreement, if any, is concluded between the EU and the UK. However, by acting now administrative time and costs can be greatly reduced. 

    Key Contacts 

    Gordon Hayden      ghayden@cooneycarey.ie 

    Gerry Higgins          ghiggins@cooneycarey.ie 

    Eamonn Madden   emadden@cooneycarey.ie 

    Gillian Conway       gconway@cooneycarey.ie 

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      Posted on November 19, 2020 by Gerry Higgins

      MOVING THROUGH UNCERTAINTY

      At Cooney Carey we have always known the value of our people and the importance of looking after each other. This has never been truer than during the current Covid-19 pandemic. To support our team during this time we are hosting an online event called “Moving Through Uncertainty”. 

      Neil Kelders, an international mental health speaker will talk to us on a range of topics that have arisen during this pandemic:

      • Stability in the current environment
      • Kindness
      • Mindset 
      • Grounding yourself
      • Hope and Willpower
      • Life work balance

      Neil will be working with us to see how we can best get through the current environment and notes that “If you change nothing, nothing changes”. 

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        Posted on November 12, 2020 by Will Townsend

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