The new electronic Professional Services Withholding Tax (“ePSWT”) system came into operation on 1 July 2021. On Wednesday 9 July, the Institute held a joint webinar with Revenue for members on the new ePSWT system. During the webinar, Revenue outlined the key features of the new electronic system, together with practical tips and advice for accountable and specified persons and their tax agents.
View the webinar recording.
View the slide presentation.
We outline below four practical issues which Revenue addressed during the webinar:
Income Tax, Corporation Tax or VAT registration
A resident specified person must have an active or ceased Tax Reference Number for income tax, corporation tax or VAT and supply this to the accountable person. Any new business or start-up that will be providing professional services within the scope of the PSWT regime should ensure that they obtain the appropriate registration as soon as possible, to minimise issues and payment delays when invoicing an accountable person.
Jointly assessed spouses where both spouses are specified persons
Revenue noted instances where both spouses in a jointly self-assessed couple are specified persons for PSWT purposes, but only one spouse is registered for income tax (i.e. the assessable spouse). In these circumstances, both spouses must be registered for income tax – a PAYE registration for the non-assessable spouse is not sufficient. The non-assessable spouse can be registered and immediately ceased for income tax purposes on Revenue’s system. This will ensure that the spouse has a valid registration for PSWT purposes.
By 9 July 2021, Revenue had already bulk registered and ceased approximately 1,400 income tax registrations for non-assessable spouses who are specified persons. Accountable persons have been advised they can notify Revenue of such instances and Revenue has resolved cases that have been notified to them to date. After the webinar, we sought further clarification from Revenue on the process for tax agents to resolve this registration issue, if such cases are brought to their attention by clients. Revenue has advised the best approach would be for the tax agents to refer these cases to Revenue to fix the registration (rather than the agent trying to correct the matter through the eRegistration service).
In response to queries on the matter, Revenue noted it has identified circumstances where the specified person for PSWT purposes (and named on the F45) differs, for example, from the entity or GP practice to which the payments are made under the GMS contract. Revenue will be exploring these matters further with the HSE when there is an opportunity to do so and will revert to the Institute and through TALC, once the issues have been considered. In the meantime, there are no changes to the interim refund process.
Pre-population of Form 11 tax returns with PSWT
PSWT information for specified persons will not be pre-populated on the 2021 Form 11 tax return, given the introduction of the electronic regime mid-year. However, Revenue intends to pre-populate the 2022 Form 11, in due course, when information for a full tax year will be available and any issues identified with the PSWT data have been worked through.