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Finance (Covid-19 and Miscellaneous Provisions) Bill 2021

Finance (Covid-19 and Miscellaneous Provisions) Bill 2021

On Tuesday 22 June 2021, the Government published the Finance (Covid-19 and Miscellaneous Provisions) Bill 2021. The Bill includes amendments to existing supports which were announced in the Economic Recovery Plan 2021. We have summarised the provisions below and look at the BRSS (section 5) and Stamp Duty (section 13) measures based on our preliminary review of the Bill.

Summary of the Sections in the Bill

  • Section 2 of the Bill amends the Employment Wage Subsidy Scheme (EWSS) to provide for the extension of the scheme to 31 December 2021 and the retention of the current enhanced subsidy rates until 30 September 2021. It also retains the qualifying criteria of a 30% reduction in turnover or customer orders and increases the reference period to assess eligibility for the scheme, from 6 to 12 months, with effect from 1 July 2021.
  • Section 3 of the Bill amends the Covid Restrictions Support Scheme (CRSS) to provide for the extension of the specified period of the scheme to 30 September 2021. The Minister for Finance continues to have the power to extend the scheme further to 31 December 2021, by order.
  • Section 4 of the Bill provides for the extension of the CRSS to 30 September 2021 and the enhanced “restart week” payments under the scheme for businesses reopening after a period of restrictions. The level of the enhanced “restart week” payment a business may claim will depend on the date on which the business reopens:
    • where the “restart week” occurs between 29 April 2021 to 1 June 2021, the restart payment will be an amount equal to two weeks at double the normal rate of CRSS (subject to a maximum weekly amount of €5,000);
    • where the “restart week” occurs between 2 June 2021 to 31 December 2021, the restart payment will be an amount equal to three weeks at double the normal rate of CRSS (subject to a maximum weekly amount of €10,000); and
    • in all other cases, the standard restart week payment will apply, which is one week at the standard rates of CRSS (subject to a maximum weekly amount of €5,000).
    • Note: Section 7 of Revenue’s CRSS Guidelines provides more information and examples on claiming the “restart week” payments. An 8-week deadline applies to the submission of such claims.
  • Section 5 of the Bill provides for the new Business Resumption Support Scheme (BRSS). We have outlined the provisions relating to this new support for businesses in more detail below.
  • Section 6 of the Bill provides for the extension of the reduced 9% VAT rate for the tourism sector from 31 December 2021 to 31 August 2022. The 9% VAT rate applies to the supply of restaurant and catering services, guest and holiday accommodation and entertainment services, such as admissions to cinemas, theatres, museums, fairgrounds, amusement park and sporting facilities, and also to hairdressing and the sale of certain printed matter (e.g. brochures, maps and programmes).
  • Section 7 of the Bill inserts a new section 28D into the Emergency Measures in the Public Interest (Covid-19) Act 2020 to provide for warehousing of EWSS overpayments received by employers which must be refunded to Revenue.
  • Sections 8, 9 ,10, 11 and 12 give effect to the announcement by the Government of the extension of the Debt Warehousing Scheme as part of the Economic Recovery Plan for refunds of Temporary Wage Subsidy Scheme (TWSS) payments, PAYE, income tax, VAT and PRSI:
    • Period 1 (the “Covid-19 restricted trading phase”) will run from 1 July 2020 until 31 December 2021;
    • Period 2 (“the zero interest phase”) will run from 1 January 2022 until 31 December 2022 during which no interest will be charged on warehoused relevant tax from Period 1; and
    • Period 3 (the reduced interest phase) will run from 1 January 2023 until the relevant tax is repaid to Revenue. During Period 3, interest will be charged at 3% per annum on warehoused relevant tax from Period 1.
  • Section 13 of the Bill which gives statutory effect to the Financial Resolution passed on 19 May 2021 which imposes a new 10% rate of stamp duty on the bulk purchase of residential property. Further details on this section are outlined below.

You can read the Explanatory Memorandum here.

Business Resumption Support Scheme (BRSS)

Section 5 of the Bill includes legislation for this new scheme which is intended to support businesses that were significantly impacted throughout the COVID-19 pandemic as referenced above. The section inserts a new section 485A into Chapter 2 of Part 15 of the Taxes Consolidation Act (TCA) 1997.

BRSS is available to affected self-employed individuals and companies who carry on a trade, the profits of which are chargeable to tax under Case I of Schedule D. It is also available to persons who carry on a trade in partnership, and any trading activity carried on by charities and sporting bodies.

To qualify under the scheme, the turnover of the business during the period from 1 September 2020 to 31 August 2021 must be no more than 25% of its turnover when compared to the reference period. The reference period is dependent on the date that the business commenced its relevant business activity. For most businesses, the reference period will be 2019 but it will be a later period if the business was established on or after 26 December 2019.

Qualifying taxpayers can claim “an amount equal to three times the amount as derived by 10% of their average weekly turnover during the reference period” up to €20,000 and 5% thereafter, subject to a maximum payment of €15,000. Payments made under the scheme will be treated as an advance credit for trading expenses.

To make a claim under the scheme, a number of other conditions must be satisfied including that the person; has an up-to-date tax clearance certificate; has complied with their VAT obligations; is not entitled to make a claim for the CRSS scheme in respect of any week that includes 1 September 2021; and the business is actively carrying on its trade and has an intention to continue to do so. Claims for the BRSS must be made through ROS and claimants are required to complete a declaration that they satisfy the conditions of the BRSS. Provision is made for the publication of the names of claimants of BRSS on Revenue’s website.

The Institute will update members on Revenue guidance regarding this measure when it is published.

Stamp Duty measures for the cumulative purchase of 10 or more residential properties

As outlined above, Section 13 of the Finance (Covid-19 and Miscellaneous Provisions) Bill 2021 gives statutory effect to the Financial Resolution that was passed on 19 May 2021 inserting a new section 31E into the Stamp Duties Consolidation Act (SDCA) 1999. The measure is intended to disincentivise the purchase of multiple residential units by a single corporate entity or individual.

The measure imposes a 10% rate of stamp duty on the acquisition, on or after 20 May 2021, of residential units where an aggregate of 10 or more such units is acquired during a 12-month period. The stamp duty rate that normally applies to the acquisition of residential property is 1% of the value of property up to €1 million and 2% of the value that exceeds €1 million. The new 10% rate of stamp duty applies in respect of the acquisition of residential units, such as houses and duplexes but not apartments. There is a 3-month transition period provided for the execution of contracts that were entered into but not completed prior to 20 May 2021.

The stamp duty charging provision in section 13 (12) of the Bill (previously subsection 10 of the Financial Resolution of 19 May 2021) has been amended. The provision changes the usual Head of Charge (in Schedule 1 to the SDCA) that would apply to the transfer of shares to the extent that they derive value from ‘relevant residential units’. Where subsection 12 applies, the Head of Charge ‘CONVEYANCE or TRANSFER on sale of any property other than stocks or marketable securities or a policy of insurance or a policy of life insurance’ will apply as respects that part of the value of the shares that is derived from a ‘relevant residential unit’.

New measures included in the Bill, which were not included in the Financial Resolution of 19 May 2021, provide for an exemption from the new 10% rate of stamp duty where; residential units are leased to local authorities for certain social housing purposes; and also to situations where a residential unit is acquired and immediately leased to a housing authority for use in the provision of social housing support.