COVID-19 information and advice for taxpayers and agents
Filing returns, paying taxes, loss relief, debt management and debt warehousing
Filing Tax Returns
Taxpayers (individuals and businesses) should continue to file their tax returns even if payment of the resulting liabilities, in whole or in part, is not possible. Where, due to the virus, key personnel that compute tax returns are unavailable, we strongly advise that the relevant return is submitted on a ‘best estimate’ basis.
The application of a surcharge for late CT1 Corporation Tax returns for accounting periods from June 2019 onwards (i.e. due by 23 March 2020 onwards) is suspended until 01 July 2021.
Similarly, the application of a surcharge for late iXBRL financial statements for accounting periods ending from March 2019 onwards (i.e. due 23 March 2020 onwards) is suspended until 1 July 2021.
Where a CT1 Corporation Tax return, in respect of an accounting period ending between June 2019 and September 2020, due by a date which is on or after 23 March 2020 but before 30 June 2021:
- is filed late, but no later than 30 June 2021
- is not a return that is deemed to be filed late under section 1084(1)(b) TCA 1997
- the late filing is the result of COVID-19 circumstances,
the late CT1 return may be completed without the restriction of reliefs, such as loss relief and group relief, required by section 1085(2) TCA 1997.
There are a number of online payment methods available to make a payment to Revenue see online payment facilities.
For specific queries on payments please continue to submit your query through My Enquiries selecting the following:
- For ‘Enquiry relates to': Select ’Other than the above’ from the drop down menu.
- For ‘More specifically': Select ‘Revenue On-Line Service (ROS) Payments’ from the drop down menu.
- Please enter details of your enquiry (maximum 2,000 characters).
For information on how to amend or cancel a monthly direct debit payment, see Monthly direct debit. Alternatively, you can submit your request to amend or cancel a monthly direct debit payment via myEnquiries by selecting the following:
- For ‘Enquiry relates to': Select ’Collector-General’s ‘ from the drop down menu.
- For ‘More specifically': Select ‘Direct Debit’ from the drop down menu.
- Please enter details of your enquiry (maximum 2,000 characters).
Preliminary Income Tax Direct Debit taxpayers
Preliminary Income Tax direct debit taxpayers can elect to calculate their liability to preliminary tax based on 105% of the pre-preceding year’s Income tax liability. The conditions to avail of this concession are outlined in the Preliminary Income Tax direct debit page.
Variable Direct Debit – Notice for Employers’ Income Tax/PRSI/USC/LPT payments
Routinely, payments for Employer Income Tax/PRSI/USC/LPT are debited on the third last working day of each month for both Fixed Direct Debit and Variable Direct Debit payments. However, where a variable direct debit fails due to insufficient funds, Revenue has suspended the process of issuing a further request for the payments until further notice. Should an employer wish to make a payment after the third last working day, they can avail of other online payment facilities. This temporary suspension came into effect from the March 2020 Variable Direct Debit payments onwards.
Employers should continue to report their payroll details each month to ensure that the filed/deemed return is accurate.
Temporary Income Tax relief for self-employed individuals carrying on a trade or profession
Section 10 of the Financial Provisions (Covid-19) (No. 2) Act 2020 provides for a number of temporary income tax measures to assist self-employed individuals who have been adversely impacted by the Covid-19 restrictions.
- Under the first measure, self-employed individuals can claim to have their 2020 losses and certain unused capital allowances carried back and deducted from their profits for the year of assessment 2019, thus reducing the amount of income tax payable on those profits. A €25,000 limit on the total amount that may be carried back will apply.
- The second measure allows for an acceleration of that relief by allowing self-employed individuals to make interim claims based on the estimated amount of relief available to them.
- The third measure gives an option to individual farmers to step out of income averaging for the tax year 2020, notwithstanding that the farmer may also have stepped out of income averaging in one of the four preceding tax years.
For an explanation on how the first two measures will operate in practice please refer to the manual:
While guidance on the income averaging measure for farmers is available in the manual:
Temporary acceleration of Corporation Tax loss relief
Section 11 of the Financial Provisions (Covid-19) (No. 2) Act 2020 introduced a new section 396D in the Taxes Consolidation Act 1997. Section 396D provides for a temporary acceleration of corporation tax loss relief for accounting periods affected by the Covid-19 pandemic and related restrictions.
It allows companies:
- to estimate their trading losses for certain accounting periods
- to carry back up to 50% of those losses against chargeable profits of the preceding accounting period on an accelerated basis.
The manual 'Corporation tax: Accelerated loss relief for companies adversely impacted by Covid-19 restrictions' (Part 12-03-05) provides:
- guidance on the operation of section 396D
- information to companies on how they may make a claim for the relief.
While taxpayers are advised to pay tax liabilities if at all possible, we recognise that tax payment difficulties are an inevitable impact of the COVID-19 pandemic.
To assist businesses who are experiencing tax payment difficulties:
- Warehousing of certain tax debts for SMEs* was introduced.
- Businesses, other than SMEs, who are experiencing difficulties in paying their tax liabilities can contact the Collector-General’s office through MyEnquiries. Alternatively, these businesses can engage directly with their branch contacts in Revenue’s Large Corporates Division or Medium Enterprises Division.
* For tax purposes, an SME is a business with turnover of less than €3 million which is not dealt with by either Revenue’s Large Corporates Division or Medium Enterprises Division. SMEs are managed from both a service and compliance standpoint by Revenue’s Business Division.
While debt enforcement activity is largely suspended, there are businesses that have continued to operate at normal or enhanced levels during the pandemic and some of these are failing to meet their normal timely filing and payment obligations.
These businesses will be subjected to debt collection and enforcement action, including interest charges at the standard rates of 8% and 10%, as appropriate, if filing and payment issues are not quickly rectified. It is important that businesses, which may be facing difficulty in paying their taxes for the first time, know that we will work with them to resolve their tax payment difficulties.
With early and meaningful engagement, we can generally agree payment arrangements that are acceptable to both the business and Revenue.
Businesses can apply for a Phased Payment Arrangement online by using Revenue’s Online Phased Payment Facility which is accessible through ROS. The duration of the phased payment required will vary dependant on individual taxpayer circumstances. This can be set out by the applicant when the phased payment application is being made. The duration required will be reviewed by Revenue on a case by case basis and the taxpayer will be advised accordingly. This online facility is available 24/7 and affords businesses considerable flexibility to self-manage their tax payment schedule in line with business needs or temporary cash flow challenges.
For those businesses that have no capacity at present to pay their current taxes or meet the PPA obligations, the taxpayer may defer the PPA payment by one month via the online facility. Alternatively, a taxpayer may seek a deferral in excess of one month and such requests will be considered on a case by case basis.
Tax debt - warehousing
Revenue recognises that, due to the COVID-19 pandemic, businesses that have had to close or have been significantly negatively impacted by public health restrictions may not be able to enter into arrangements in the short term to clear any COVID-19 related tax debt. In addition to this tax debt, businesses face the challenge of paying their ongoing tax liabilities as they arise after they reopen; pay their trade and other non-Revenue creditors; complete any necessary restructuring to deal with new trading arrangements in the context of social distancing; build up stock, etc.
In response to these business challenges, the Government has legislated to allow for debt associated with the COVID-19 crisis to be ‘warehoused’. Under this scheme, unpaid VAT and PAYE (Employers) and IT debts arising during the COVID-19 crisis in 2020 and 2021 can be ‘parked’ for a period of 12 months commencing 1 January 2022 to end December 2022. After the 12-month interest free period, the warehoused debts can be repaid at a low interest rate of 3% per annum.
The commencement date for warehousing is February 2020.
ABC Hotel resumes trading after Covid restrictions in June 2021. The Hotel can warehouse the following liabilities:
All VAT returns from January 2020 to December 2021 Inclusive
All PAYE (Employer) returns February 2020 to December 2021 Inclusive
Income Tax returns and Preliminary IT tax for 2020 and 2021 can also be warehoused on the same basis as the VAT/Employer PAYE, provided the customer has experienced a reduction in income of 25% on 2019 income.
Overpayments of the Temporary Wage Subsidy and Employer Wage Subsidy which employers may be unable to repay at this time may also be warehoused. These overpayments can be deferred for a 12-month period and then repaid at the reduced interest charge of 3% on the same basis as the VAT/PAYE debts outlined above.
To avail of Debt Warehousing, all tax returns must be filed, even if the liability cannot be paid or there is no liability. Relevant taxes for periods commencing January 2022 onwards must be paid as they fall due.
Failure to file returns may result in the entitlement to avail of the Debt Warehousing Scheme being withdrawn. Where warehousing is withdrawn, periods which had been warehoused;
- will become payable immediately
- may be subjected to debt collection enforcement action
- will be subject to interest charges of 8% or 10% per annum.
In addition, Tax clearance certification will be automatically rescinded and, consequently, any payments due under the Employment Wage Subsidy Scheme (EWSS), Covid Restrictions Support Scheme (CRSS) or other similar Government supports will cease until the compliance issues are rectified.
Full details of the Debt Warehouse Scheme are in the Information booklet on debt warehousing.
Next: Compliance with certain reporting and filing obligations and the satisfaction of certain other tax-related conditions