Import One Stop Shop – 1 July 2021

The new EU-wide Import One Stop Shop (IOSS) will go live from 1 July 2021.

From that date the current VAT exemption for goods in small consignments of a value of up to €22 is abolished and all goods imported into the EU will be subject to VAT.

The IOSS will allow suppliers making distance sale of goods imported from third countries to final consumers in the EU (e.g. online retailers) to declare and pay the VAT due on those goods by submission of a monthly return via the IOSS in the Member State where they have registered for the scheme.

Continue reading about the new EU VAT changes

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Crowleys DFK Recognised in Top 100 Companies Leading in Wellbeing Index 2021

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Top 100 Companies Leading in Wellbein

We are delighted to be recognised in the Top 100 Companies Leading in Wellbeing Index. This index, published by Business & Finance in partnership with Ibec, acknowledges companies across Ireland that are leading the way for employee wellbeing and who, through their commitment to instilling a best practice approach, have made a lasting impact on their employees and on the business community.  

Speaking about this achievement, Colette Nagle, COO and Head of Corporate Social Responsibility said: 

“We are very proud to have been included in the Top 100 in Wellbeing list.  Having received the Ibec KeepWell Mark Accreditation in August 2020, continuously improving our workplace wellbeing practices across all levels of the business has remained a key priority for us.  We will continue to strive towards achieving the ultimate goal of providing the highest standard of workplace health, wellbeing, and safety for our employees.” 

 Speaking about the launch of the Index, Ibec CEO, Danny McCoy commented:  

“It is encouraging to note the diversity of industries spanning the full breadth and scope of the Irish economy that are represented in this index. These 100 companies that we are celebrating today are leading the way in workplace wellbeing and their commitment to instilling a best practice approach to wellbeing has made a lasting impact on their employees and on the business community.” 

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Crowleys DFK Partner Appointed to the Council of Gaisce

We are delighted to announce that Vincent Teo, Partner and Head of Public Sector & Government Services, has been appointed by the Minister for Children, Equality, Disability, Integration and Youth, Roderic O’Gorman to the Council of Gaisce. The appointment is effective from 1 March 2021 and is for a period of three years.

Gaisce – The President’s Award is a self-development programme for young people aged 15-25 which enhances confidence and wellbeing through participation in personal, physical and community challenges.  Appointments to the Gaisce Council is a ministerial appointment and can only be awarded by the current presiding Minister for Children, Equality, Disability, Integration and Youth.  Uachtaráin na hEireann, Michael D. Higgins, is patron of the Award.

Commenting on his appointment, Vincent said:

I am delighted and honoured to have been given this wonderful opportunity to serve the Council.  I am looking forward to supporting the Council, and indeed Gaisce, in enabling young people to shape their own path to self-discovery.

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Postponed Accounting for VAT on Imports

Postponed Accounting for VAT on imports is available from 1st January 2021. It provides a major cash-flow benefit for traders who import goods from all non-EU countries into Ireland.

Postponed Accounting enables you to self-account for import VAT on your VAT returns rather than having to pay import VAT upfront. It also allows you to reclaim import VAT at the same time as it is declared on a VAT return, subject to normal rules on deductibility.

There are two steps to ensure you can apply postponed accounting to your imports:

Step One – Make sure your business is entitled to use Postponed Accounting

  • Traders who were registered for both VAT and Customs & Excise (C&E) with Irish Revenue at 11:00pm on 31 December 2020 have been given automatic entitlement to Postponed Accounting.
  • VAT registered traders who were not registered for C&E at 11:00pm on 31 December 2020 and who wish to import goods into Ireland must register for C&E (i.e. must obtain an Irish EORI number). Once registered for C&E, they will be given automatic entitlement to Postponed Accounting.
  • After 11:00 pm on 31 December 2020 all new intra-EU VAT applicants must get their Irish VAT number issued and then must register for C&E. When both the VAT and C&E registrations have been approved the applicant must request access to Postponed Accounting from Revenue.
  • After 11:00 pm on 31 December 2020 domestic-only VAT applicants who acquire goods from countries outside of the EU VAT area must apply to Revenue for Postponed Accounting and submit certain supporting documentation. Domestic-only VAT applicants will receive confirmation from Revenue when their Postponed Accounting application has been granted. Applicants will not have access to the Postponed Accounting facility prior to this confirmation.

Step Two – Make sure the electronic customs import declaration is completed correctly

  • The appropriate fields must be completed on the customs import declaration or you may be required to pay import VAT upfront.
  • Revenue have issued guidance on exactly what needs to be inputted on the AIS and AEP systems.
  • If you do not complete the customs import declaration yourself, you should tell your supplier or customs agent that you wish to avail of postponed accounting for import VAT and ensure that the customs import declaration indicates this to Revenue.

For further assistance, please contact Siobhán O’Hea, Partner in our Tax Services Department.

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Employment Wage Subsidy Scheme (EWSS)

Update 22 December 2020

Businesses on the Employment Wage Subsidy Scheme (EWSS) will have to provide Revenue with a six-month sales projection within 10 days or will lose their eligibility for the scheme.

Employers claiming a subsidy under the scheme must now show a 30% reduction in turnover will occur for the period January 1 to June 30 2021. Companies must make the calculation by December 31 and compare it to the corresponding period in 2019, to ensure their business will still qualify for the scheme.

Furthermore, businesses will now have to review their eligibility monthly, based on their actual incremental revenue figures.

Employers who no longer qualify based on amended projections will have to deregister from the scheme. Incorrect submissions will be clawed back by Revenue or offset against future payments under the scheme.

On July 23, the Government announced the Employment Wage Subsidy Scheme (EWSS). This scheme provides a flat-rate subsidy to qualifying employers based on the numbers of paid and eligible employees on the employer’s payroll.

EWSS will replace the Temporary Wage Subsidy Scheme (TWSS) from 1 September 2020 and is expected to continue until 21 March 2021.

Qualifying Criteria for Employers

In order to be eligible for the EWSS, employers must demonstrate that:

  • their business will experience a 30% reduction in turnover or customer orders between 1 July and 31 December 2020;
  • the disruption is caused by COVID-19; and
  • must maintain tax clearance for the duration of the scheme.

The reduction in turnover or customer orders is relative to:

  • the same period in 2019 where the business was in existence prior to 1 July 2019;
  • the date of commencement of a business to 31 December 2019; or
  • where a business commenced after 1 November 2019, the projected turnover or customer orders had COVID-19 disruption not arisen.

Employers are required to conduct a monthly review to ensure they continue to meet the eligibility criteria under the EWSS. The EWSS will be administered by Revenue on a ‘self-assessment’ basis. The normal requirement to operate PAYE on all payments will be re-established under the EWSS however, a 0.5% rate of employers PRSI will continue to apply for employments that are eligible for the subsidy.

From 31 July:

  • TWSS employers can claim for non-TWSS employees (new hires) under the new EWSS.
  • Non-TWSS employers, who have not previously availed of TWSS, will only be eligible to apply for the EWSS.

Rates

As of 20 October 2020, the EWSS is being amended to align with the amendment to PUP, with the rate bands as follows:

Employee gross weekly wages Subsidy payable
Less than €151.50 Nil
From €151.50 to €202.99 €203
From €203 to €299.99 €250
From €300 to €399.99 €300
From €400 to €1,462 €350
Over €1,462 Nil

This revised scheme will run to end January 2021 when it will revert back to the below rates:

Employee gross weekly wages Subsidy payable
Less than €151.50 Nil
From €151.50 to €202.99 €151.50
More than €203 and less than €1,462 €203
More than €1,462 Nil

If you have any queries or need assistance registering for the scheme, please contact our COVID-19 Client Response Team at crteam@crowleysdfk.ie or on +353 1 679 0800/+353 21 427 2900.

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Revenue Publish Tax and Duty Manual “VAT – Postponed Accounting”

Revenue have published a new Tax and Duty Manual VAT – Postponed Accounting. It contains information on procedures, conditions and the operation of the new postponed accounting system for import VAT. The publication of this manual brings welcome clarification for traders importing goods to Ireland from all non-EU countries (including the UK post-Brexit) from 1st January 2021.

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ESB launches €75m carbon reduction fund for businesses

Carbon reduction fund

ESB has announced a €75m fund to help large businesses reduce their carbon footprint. Under this Smart Energy Services project, ESB estimates that businesses could save up to 60% in energy costs over the next five years. 

Up-front capital is proved by ESB to support energy-saving infrastructural projects and repayments can be financed by the resultant delivered savings.  Once the initial capital expenditure cost, borne by ESB, is repaid, the client receives 100% of the savings. 

The fund is open to large businesses with an overall energy bill of more than €200,000 per year. ESB’s Smart Energy Services team will produce an initial analysis of energy savings potential at no cost to clients. 

ESB has already delivered similar projects to more than 300 large businesses in Ireland and the UK, including Tesco, the Dublin Airport Authority and Ardagh Glass. 

The new fund is estimated to reduce carbon emissions by up to two million tonnes. 

This comes after numerous climate change measures were announced in Budget 2021.  

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Crowleys DFK Awarded Ibec KeepWell Mark for Commitment to Employee Wellness

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Crowleys DFK has become the first indigenous accountancy firm to be awarded the prestigious Ibec KeepWell Mark; an evidence-based accreditation and award that recognises Irish employers for investing in workplace health and wellbeing.

KeepWell Mark

(L-R) Colette Nagle, COO and Head of Corporate Social Responsibility and James O’Connor, Managing Partner of Crowleys DFK

The aim of the KeepWell Mark is to help businesses benchmark workplace wellbeing activity focusing holistically on eight key areas: leadership, absence management, smoke free, physical activity, health and safety, mental health, healthy eating and intoxicants.

Speaking about this achievement, Colette Nagle, COO and Head of Corporate Social Responsibility said:

“I am delighted and very proud that Ibec has awarded us The KeepWell Mark accreditation. At Crowleys DFK, we have long recognised the importance of making the health, wellbeing and safety of our employees a top priority. We have made a strong commitment to improve our workplace wellbeing practices across all levels of the business which will positively impact our current team and new recruits including those who will join us through our Graduate Recruitment Programme.”

The robust accreditation process for the award culminated with a personalised report outlining strengths and areas for improvement which will assist Crowleys DFK to chart its way to further success when it comes to employee wellbeing.

The firm’s initiatives as part of their Employee Health and Wellbeing Programme include flexible working hours, safeguard policies and supports, professional development and training, birthday leave, early Friday finish during the summer, sports and social activities and employee wellness events.

In the current pandemic, the firm has responded to the Covid crisis by introducing virtual fitness classes and sports and social events, healthy recipe competitions, wellness and mental health webinars and an Employee Assistance Programme.

James O’Connor, Managing Partner said:

“This is a wonderful achievement. Not only has it reassured us that our health and wellbeing strategy is on the right path but it has also strengthened our commitment to strive for continuous improvement. We now have clear guidance on what we need to focus on to achieve the ultimate goal of providing the highest standard of workplace health, wellbeing, and safety.”

Commenting Sophie Moran, Programme Manager of The KeepWell Mark in Ibec said:

“We’re delighted to award Crowleys DFK with The KeepWell Mark™ accreditation. The commitment they have demonstrated to supporting the health and wellbeing of their employees is to be highly commended, and we hope their efforts will inspire many other organisations to approach wellbeing as a strategic priority both now and in the future.”

The closing date for applications to the firm’s Graduate Recruitment Programme is November 1st.

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Budget 2021 Analysis

Edward Murphy, Partner and Head of Tax Services, gives his analysis of Budget 2021.

When Minister Donohue delivered his Budget 12 months ago, he told us that we had to be safe and cautious due the possibility of a no-deal Brexit. One year on, Brexit uncertainty is ever more present, but we now also have the monumental pressure of a pandemic. Budget 2021 is a €17.75bn package, the largest in the history of the State. Minister Donohue has attempted to strike a balance between the country’s longer-term financial position and supporting those out of work and those businesses who are struggling to stay alive.

We will dip into our emergency rainy day fund this year for €1.5bn as the Government expects to have to borrow almost €20bn in 2021 to deal with the shortfall in tax receipts and the required significant spending on various Covid-19/Brexit supports and on our health system and infrastructure costs. EU financial supports expected in 2021 on both the Covid-19 and Brexit fronts will be welcomed.

The Minister took the opportunity to again re-affirm Ireland’s commitment to its 12.5% Corporate Tax rate and to acknowledge Corporate Ireland’s significant contribution to the Country’s national tax purse.

The large spending amounts announced on housing, infrastructure, defence, health and education would in any other Budget be seen as stand-out, but in Budget 2021 they are in the shadow of the even larger Covid-19 crisis supports that the government is committing to support businesses.  Targeted sector supports to tourism, hospitality, arts/entertainment and other businesses affected by Covid-19 are aimed at preserving existing jobs or keeping some of the businesses in these sectors on life-support. Employment is the key to survival and recovery. Indeed the ‘green’ initiatives of increasing Carbon Tax to help to fund making homes more energy efficient, appear incidental.

The sheer scale of the challenges facing Ireland may have in one sense helped the Government Partners to agree to Budget 2021’s size and approach.  However, this ‘’borrow now, pay later’’ Budget has moved the relatively recent promise of tax decreases to more now the question of who will pay for this in the longer term?

To see how the budget affects you, you can read our Budget 2021 Highlights.

For more information, please contact Eddie Murphy, Partner and Head of Tax Services.

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Budget 2021 Highlights

Budget 2021 was delivered by Finance Minister Paschal Donohoe today. Below we highlight the main changes that could affect you.

Personal Tax

  • Small change to the second rate-band of Universal Social Charge which will increase from €20,484 to €20,687.
  • Income tax bands and rates remain unchanged.
  • The Dependent Relative Credit will increase from €70 to €245.
  • The Earned Income Credit will increase from €1,500 to €1,650.
  • Help to Buy Scheme July Stimulus measures to be extended to the end of 2021.

VAT

  • Re-introduction of the 9% VAT rate for the hospitality and tourism sector from 1st November 2020 and will remain in place for all of 2021.

Corporation Tax

  • Confirmation of the 12.5% rate of tax, but challenges lie ahead in the area of tax digitalisation.
  • All Intangible assets acquired from 14th October 2020 will be within the scope of balancing charge rules.
  • As part of the EU ATAD, 2021 will see the introduction of interest limitation and anti-reverse-hybrid rules.
  • Technical adjustment to Exit Tax rules in respect of the operation of interest on instalment payments.
  • Knowledge Development Box relief extended until end of 2022.
  • Digital Gaming Tax Credit to encourage growth in this sector is likely to be introduced in 2022.
  • Section 481 Film relief amended to provide for an additional year at its peak rate of 5% until 31 December 2023.

Climate Change Measures

  • A Carbon tax increase of €7.50 per tonne will be applied to auto fuels from midnight tonight and all other fuels from 1st May 2021. This will bring Carbon tax to €33.50 per tonne/CO2 with the goal to achieve €100 per tonne by 2030.
  • VRT – transition from CO2 based system to new Worldwide Harmonised Light Vehicle Test Procedure (WLTP) emissions test system from 1st January 2021. Used imports will have CO2 values adjusted to WLTP equivalent.
  • Motor Tax – rates will remain unchanged for all cars in the engine size regime and all but the most pollutant cars in the post 2008 regime. Third table based on WLTP system from 1st January 2021.
  • VRT Relief for Plug-in Hybrid Electric Vehicles and hybrids will expire.
  • NOx surcharge bands to be adjusted so higher NOx emitting vehicles pay more.
  • Accelerated Capital Allowances scheme for Energy Efficient Equipment extended for further 3 years. Categories of equipment to be updated.

Agri Measures

  • Consanguinity relief of 1% Stamp Duty rate on the transfer of Agricultural Land between family members is extended until 31 December 2023.
  • The 1% Stamp Duty rate on farm consolidations is extended until end of 2022.
  • Farmers’ flat VAT rate increase from 5.4% to 5.6% from 1 January 2021.

Capital Gains Tax and Capital Acquisitions Tax

  • Capital Acquisitions Tax and Capital Gains Tax remain at 33%.
  • No change in Capital Acquisitions Tax thresholds.
  • CGT – Entrepreneur Relief ownership test slightly changed so that the shares must be held for a continuous period of any three years prior to disposal. Previously it was 3-year continuous period in the 5 years immediately prior to disposal.

COVID-19 Support Measures

  • Covid Restrictions Support Scheme (CWSS)  for businesses significantly impacted (at least 20% reduction on corresponding period in 2019) or temporarily closed and where Level 3 or above restrictions prohibit or restrict access by customers. Cash payment from Revenue Commissioners as an advance credit for trading expenses for the period of restrictions. Payments will be calculated based on 10% of the first €1m of turnover and 5% thereafter, based on the average ex VAT Turnover for 2019. The maximum weekly payment will be €5,000. Scheme will run until 31 March 2021.
  • Self Employed may avail of the Debt Warehousing provisions to defer payment of their 2019 Income Tax balance and preliminary tax for 2020. Payments are deferred for a year without interest applying and at a rate of 3% interest thereafter and will attract no surcharge.
  • EWSS, or similar type scheme, likely to continue beyond March 2021.
  • Commercial rates waived.
  • New European investment fund to be established to invest in domestic, high innovation enterprises.

Other Measures

  • In addition to the change in USC rate band, the weekly threshold for the higher rate of employers’ PRSI is to increase from €394 to €398.
  • Excise duty on Tobacco products to increase by 50 cents.

For more information, please contact Eddie Murphy, Partner and Head of Tax Services. You can view Eddie’s Analysis of Budget 2021 here.

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