Temporary concessions made to reliefs and exemptions

Temporary Income Tax relief for self-employed individuals

Temporary Income Tax (IT) measures were introduced to assist self-employed individuals, carrying on a trade or profession, adversely impacted by the COVID-19 restrictions. These included:

  • relief for losses and certain capital allowances for individuals carrying on a trade or profession
  • temporarily step out of income averaging for farmers.

Relief for losses and certain capital allowances

This concession allows losses and certain unused capital allowances, which would normally have been carried forward, to be carried back.

You can carry back losses and certain allowances from 2020 to the year of assessment 2019. (To profits of the same trade or profession that the losses occurred.) This is to reduce the amount of IT payable on your 2019 profits.

The specified capital allowances are:

  • wear and tear allowances for plant and machinery
  • writing-down allowances for industrial buildings and structures
  • allowances for farm buildings and structures.

Limitation

There is a €25,000 limit on the total amount that may be carried back.

If you:

  • have more than one trade, the €25,000 limit must be applied your total trading or professional income. (It is not €25,000 per trade.)
  • are jointly assessed, you each have a €25,000 limit for your own trading or professional income.

Note

You may be subject to the High-Income Earner Restriction for 2019. If you are, this relief will be given after any other relief you are entitled to for 2019.

Acceleration of the relief

You can make interim claims based on the estimated amount of relief available to you.

Where the interim claim relates to losses incurred or specified allowances to be claimed in the:

  • year of assessment 2020, the claim may not be made after 31 May 2021.
  • year of assessment 2021, the claim may not be made:
    • until after the first four months of the basis period for 2021. For example, where the basis period is 1 August 2020 to 31 July 2021, the claim cannot be made until 1 December 2021.
    • after 31 May 2022.

You must keep records to show you estimated the relief amount to the best of your knowledge and belief.

How to claim

Complete the appropriate fields in 'Terminal loss relief / Covid-19 relief (under section 395A and/or 304(3A))' in your 2019 Income Tax Return (Form 11).

Temporarily step out of income averaging for farmers

Note

This is available to farmers who may also have stepped out of income averaging in one of the four preceding tax years.

Farmers have an option to step out of income averaging for the tax year 2020.

To avail of this additional step-out option, you must have:

  • used the option to temporarily step out of the averaging regime in one of the four preceding years of assessment
  • and
  • sustained a loss in the period 1 January 2020 to 31 December 2020.

Where such an election is made, you may not elect to step out of averaging for a further five years.

Next: Temporary acceleration of Corporation Tax loss relief