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 

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.

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.

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.

The Stay and Spend Scheme begins today, 1 October 2020 and runs until 30 April 2021. This new tax credit can be used against Income Tax or USC liabilities for the years 2020 and 2021.

To qualify for the Stay and Spend credit a minimum spend of €25 is required per transaction. Qualifying expenditure includes holiday accommodation and “eat in” food and non-alcoholic drink from a “registered service provider” only. A list of all registered service providers can be found on Stay and Spend Scheme.

The Stay and Spend Tax Credit is equal to up to 20% of qualifying expenditure incurred. A €625 expenditure limit has been introduced for individuals and €1,250 for jointly assessed spouses and civil partners. The maximum tax credit that can be claimed under this scheme in respect of the 2020 and 2021 year of assessment is either €125 per person or €250 per couple for jointly assessed spouses and civil partners.

To claim the Stay and Spend Tax Credit, you must submit an income tax return and submit a copy of your receipt to Revenue. Tax returns can be submitted via MyAccount for PAYE workers or via ROS for the self-employed. The easiest way to submit a copy of your receipt to Revenue is to use the new Revenue Receipts Tracker App, which is available to download for free from the Apple App Store and the Google Play Store.

The introduction of this scheme should provide a welcome boost to the tourism and hospitality sector.

Please contact us if you have any queries on how to avail of this tax credit.

5 Star FAE Results

At Crowleys DFK, we are celebrating the success of our five FAE Students, who all passed their final exams with Chartered Accountants Ireland (ICAI).

Managing Partner, James O’Connor, said:

“I am delighted for our FAE students and the 100% success rate again in this year’s exams. I congratulate each of them in reaching this milestone in their careers as Chartered Accountants. Everyone at Crowleys DFK is very proud of them and their achievements, particularly considering the extra challenges they had studying and sitting exams in these unprecedented times.”

James concluded:

“I believe our students’ record of consistently achieving first class results in professional exams is a testament to our Graduate Programme and our ability to provide a supportive and hands-on learning environment.”

As part of the July 2020 Jobs Stimulus Package, the Government announced a reduced interest rate of 3% per annum to apply to non Covid-19 related tax debts. This reduced rate is available to all taxpayers that have declared but unpaid tax liabilities for any period.  The reduced 3% rate is also available to any undeclared liabilities that predate Covid-19 provided the liabilities are declared and a Phased Payment Arrangement agreed with Revenue by 31 October 2020.

This scheme is available across all tax types including VAT, income tax, corporation tax, CGT, RCT and PAYE (Employer) taxes and was introduced to provide vital liquidity support to struggling businesses and sole traders that have historic unpaid tax debts. By applying the lower interest rate of 3% per annum, the cost of paying unpaid tax debts is significantly reduced.

In addition, any individual or business with non Covid-19 unpaid tax liabilities will not qualify for a tax clearance certificate unless there is a Phased Payment Arrangement in place. Businesses cannot avail of the Employment Wage Subsidy Scheme, the Stay and Spend Scheme, accelerated loss relief and other measures without a tax clearance certificate.

Any existing Phased Payment Arrangements with Revenue will be reviewed automatically, and the reduced rate will be available for any tax debts that remain outstanding from 1 August 2020.

To avail of this reduced rate of interest, taxpayers must agree a phased payment Arrangement with Revenue before 31 October 2020. The first step is to apply online via ROS for a Phased Payment Arrangement (PPA).

Please contact us if you have any queries on how to avail of this reduced rate of interest.

Revenue have announced an extension to the pay-and-file deadline for self-assessed taxpayers in their e-brief 174/20.

The new deadline for submission of 2019 income tax and CAT returns for taxpayers who pay and file through ROS is 10th December 2020.

We welcome this extension in these challenging times for businesses and tax practitioners.

One of the key measures from the Government’s July Stimulus Package is the temporary reduction in the standard rate of Irish VAT for a six-month period. Between 1 September 2020 and 28 February 2021, the standard rate of VAT will change from 23% to 21%.

The standard rate of VAT applies to a wide range of goods and services e.g. the sale of motor vehicles, adult clothing, alcohol, electrical goods, most household goods, non-basic foods stuffs, many e-services, professional services and telecommunications.

The VAT rate change will not impact the VAT treatment of supplies which qualify for the reduced rate of VAT which remains at 13.5%. This includes tourism-related activities including restaurants, hotels, cinemas, and hairdressing as well as cleaning and maintenance services.

Businesses will need to consider the impact on their business and updates to their systems to account for the new rate of VAT.

Systems: Systems will have to be updated and tested for the new VAT rate change. Depending on the particular systems, this may either be a simple task or may involve some work.

Many businesses may already have had a 21% VAT code on their systems from prior years – however, they will need to check whether this code continues to function correctly and can the changes be easily reversed when the rate reverts back again?

Pricing: Businesses need to consider whether they should amend the pricing of goods and services as a result of the temporary VAT rate change.

This is particularly relevant for businesses who set their prices on a VAT-inclusive basis such as retailers or suppliers to businesses with limited VAT recovery.

They should also consider how this will impact budgets heading into the last quarter of 2020.

Contracts: Businesses should review existing contracts and consider whether the price is VAT-exclusive or VAT-inclusive. Do you need to engage with any of your suppliers or customers in respect of the VAT rate change?
Invoices: On or after 1 September 2020, VAT invoices issued by a VAT registered person who is not on the cash receipts basis to a VAT registered person, a public body or, a business carrying on a VAT exempt activity should show VAT at the new 21% rate. This is so even if the goods or services were supplied before this date.

A VAT registered person on the cash receipts basis should who is required to issue a VAT invoice to another VAT registered person, should show the VAT rate which applies on the date of the supply, not on the date of receipt of payment.

If the date of supply is prior to 1 September 2020, then the VAT rate is 23%.

Reverse Charge VAT: For businesses with partial VAT recovery entitlement, VAT at 23% must be accounted for on the reverse charge basis on taxable foreign purchase invoices dated on or before 31 August, even if those invoices are not received until September 2020.
Credit or Debit Notes: Any credit notes or debit notes issued on or after 1 September 2020 in respect of supplies of goods or services made to a VAT-registered person, a public body or a business carrying on a VAT exempt activity prior to this date must show the VAT rate in force at the time the original invoice was issued, i.e., 23%.
Advance Payments: If the goods or services are supplied on or after 1 September 2020 businesses who account for VAT on an invoice basis: the appropriate VAT rate is the rate in force at the time the invoice relating to the advance payment is issued, or ought to have been issued, whichever is the earlier.

Businesses who account for VAT on a cash receipts basis: the appropriate VAT rate is the rate in force at the time of the advance payment.

An advance payment received from an unregistered person is subject to VAT by reference to the rate in force at the time of the advance payment.

Crowleys DFK are here to help you in these unprecedented times. We are at the other end of telephone (+353 1 679 0800/+353 21 427 2900) or on our dedicated COVID-19 Client Response Team email: crteam@crowleysdfk.ie when you need us.

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.