Finance Act 2020

PART 1 Universal Social Charge, Income Tax, Corporation Tax and Capital Gains Tax

Chapter 1 Interpretation

1. Interpretation (Part 1)

1. In this Part “Principal Act” means the Taxes Consolidation Act 1997.

Chapter 2 Universal Social Charge

2. Amendment of section 531AN of Principal Act (rate of charge)

2. (1) Section 531AN of the Principal Act is amended—

(a) by substituting the following for subsection (3):

“(3) Notwithstanding subsection (1) and the Table to this section, where an individual is in receipt of aggregate income which does not exceed €60,000, is aged under 70 years and has full eligibility for services under Part IV of the Health Act 1970, by virtue of sections 45 and 45A of that Act or Council Regulation (EC) No. 883/2004 of 29 April 2004[^1], the individual shall, instead of being charged to universal social charge on the part of aggregate income for the tax year concerned that exceeds €20,484 at the rate provided for in column (2) of Part 1 of that Table, be charged on the amount of the excess at the rate of 2 per cent.”,

(b) in subsection (4), by the substitution of “2022” for “2021”, and

(c) by substituting the following for Part 1 of the Table to that section:

“Part 1

”.

(2) Paragraphs (a) and (c) of subsection (1) apply for the year of assessment 2020.

(3) Section 531AN of the Principal Act is amended—

(a) by substituting the following for subsection (3):

“(3) Notwithstanding subsection (1) and the Table to this section, where an individual is in receipt of aggregate income which does not exceed €60,000, is aged under 70 years and has full eligibility for services under Part IV of the Health Act 1970, by virtue of sections 45 and 45A of that Act or Council Regulation (EC) No. 883/2004 of 29 April 2004[^2], the individual shall, instead of being charged to universal social charge on the part of aggregate income for the tax year concerned that exceeds €20,687 at the rate provided for in column (2) of Part 1 of that Table, be charged on the amount of the excess at the rate of 2 per cent.”,

and

(b) by substituting the following for Part 1 of the Table to that section:

“Part 1

”.

(4) Subsection (3) applies for the year of assessment 2021 and each subsequent year of assessment.

Chapter 3 Income Tax

3. Amendment of section 126 of Principal Act (tax treatment of certain benefits payable under Social Welfare Acts)

3. (1) Section 126 of the Principal Act is amended—

(a) in subsection (3)(a) —

(i) by inserting the following subparagraph after subparagraph (iia):

“(iib) the payments, commonly known as the pandemic unemployment payments, made under section 202 of the Act of 2005 on and after 13 March 2020 to the relevant date (within the meaning of section 7 of that Act),”,

and

(ii) by inserting the following subparagraph after subparagraph (iib) (inserted by subparagraph (i)):

“(iic) Covid-19 pandemic unemployment payment (within the meaning of the Act of 2005),”,

and

(b) in column (1) of the Table to that section, by inserting “(other than the payments referred to in subsection (3)(a)(iib))” after “Urgent needs payment”.

(2) Paragraphs (a)(i) and (b) of subsection (1) shall be deemed to have come into operation on and from 13 March 2020.

(3) Paragraph (a)(ii) of subsection (1) shall be deemed to have come into operation on and from 5 August 2020.

4. Amendment of section 192BA of Principal Act (exemption of certain payments made or authorised by Child and Family Agency)

4. (1) Section 192BA of the Principal Act is amended, in subsection (1) —

(a) in the definition of “carer” by inserting “or the Health Service Executive” after “the Child and Family Agency”, and

(b) in the definition of “qualifying payment” by substituting the following for all the words beginning with “means” down to and including “or” where it appears immediately after paragraph (a)(iii):

“means a payment—

(a) which either—

(i) is—

(I) described in column (1) of the Table to this section,

(II) paid on a basis specified in column (2) of that Table, and

(III) made or authorised by the Child and Family Agency on behalf of the Minister,

or

(ii) is made by or on behalf of the Health Service Executive to a carer in respect of what is generally referred to and commonly known as a Home Sharing Host Allowance,

or”.

(2) Subsection (1) applies for the year of assessment 2020 and each subsequent year of assessment.

5. Amendment of section 466 of Principal Act (dependent relative tax credit)

5. (1) Section 466 of the Principal Act is amended in subsection (2) by substituting “€245” for “€70”.

(2) Subsection (1) shall apply for the year of assessment 2021 and each subsequent year of assessment.

6. Exemption in respect of Mobility Allowance

6. Chapter 1 of Part 7 of the Principal Act is amended by inserting the following section after section 192G:

“192H. (1) This section applies to a payment made under section 61 of the Health Act 1970, generally referred to and commonly known as a Mobility Allowance, by or on behalf of the Health Service Executive to a person who satisfies the conditions of the Mobility Allowance scheme as administered by the Health Service Executive.

(2) A payment to which this section applies, which is made on or after 1 January 2021, shall be exempt from income tax and shall not be reckoned in computing total income for the purposes of the Income Tax Acts.

(3) A payment to which this section applies, which is made before 1 January 2021, shall be treated as if it was exempt from income tax in the year of assessment in which it was made and shall not be reckoned in computing total income for the purposes of the Income Tax Acts.”.

7. Amendment of section 477C of Principal Act (help to buy)

7. Section 477C of the Principal Act is amended, in subsection (5A), by substituting “December 2021” for “December 2020”.

8. Share scheme reporting

8. (1) Section 897B of the Principal Act is amended—

(a) in subsection (2), by substituting the following for paragraph (a):

“(a) Where in any year of assessment an employer or other person awards shares, or a cash equivalent of shares, to a director or employee, and income tax under Schedule D or Schedule E may be chargeable on the director or employee in respect of that award, the employer or other person, as the case may be, shall deliver particulars thereof to the Revenue Commissioners in an electronic format approved by them, on or before 31 March in the year of assessment following that year.”,

and

(b) by inserting the following paragraph after paragraph (a):

“(aa) The provisions of paragraph (a) shall also apply to the value of discounts on shares awarded to a director or employee by an employer or other person.”.

(2) The Principal Act is amended in Chapter 5 of Part 5—

(a) in section 128C(15), by inserting “in an electronic format approved by them” after “Revenue Commissioners”,

(b) in section 128D(8), by inserting “in an electronic format approved by them” after “Revenue Commissioners”, and

(c) in section 128E(9), by inserting “in an electronic format approved by them” after “Revenue Commissioners”.

9. Amendment of section 472AB of Principal Act (earned income tax credit)

9. (1) Section 472AB of the Principal Act is amended, in subsection (2), by substituting “€1,650” for “€1,500” in each place where it occurs.

(2) Subsection (1) shall apply for the year of assessment 2020 and each subsequent year of assessment.

10. Amendment of section 472BB of Principal Act (sea-going naval personnel credit)

10. Section 472BB of the Principal Act is amended by inserting the following subsection after subsection (2):

“(3) Where for the year of assessment 2021 an individual is a qualifying individual—

(a) he or she shall be entitled to a sea-going naval personnel credit of €1,500, and

(b) relief shall not be given under section 472B or 472BA in respect of that year.”.

Chapter 4 Income Tax, Corporation Tax and Capital Gains Tax

11. Covid Restrictions Support Scheme

11. (1) The Principal Act is amended—

(a) by inserting the following sections after section 483:

“Objectives of section 485, purposes for which its provisions are enacted and certain duty of Minister for Finance respecting those provisions’ operation

484. (1) (a) The objectives of section 485 are to—

(i) provide the necessary stimulus to the economy (in addition to that provided by Part 7 of the Emergency Measures in the Public Interest (Covid-19) Act 2020 and the Financial Provisions (Covid-19) (No. 2) Act 2020) so as to mitigate the effects, on the economy, of Covid-19, and

(ii) if, as of 1 January 2021, no agreement stands entered into between the European Union and the United Kingdom (with respect to the future relations between them on the relevant matters), mitigate the effects on the economy which are apprehended may arise therefrom.

(b) In paragraph (a) ‘relevant matters’ means the matters described in Part II of the Political declaration setting out the framework for the future relationship between the European Union and the United Kingdom[^3].

(c) The purposes for which the several provisions of section 485 (in this section referred to as the ‘Covid Restrictions Support Scheme’) are, in furtherance of the foregoing objectives, enacted are:

(i) in addition to the provision of basic mechanisms to fulfil those objectives, to ensure the efficient use of the Covid Restrictions Support Scheme so as to minimise the cost to the Exchequer of the scheme (so far as consistent with fulfilment of those objectives);

(ii) to avoid, where possible, allocation of resources to sectors of the economy that are not in need of direct stimulus by means of the Covid Restrictions Support Scheme (and which sectors may reasonably be expected to be restored to financial viability and an eventual growth path by the indirect effects of the scheme);

(iii) to protect the public finances through mechanisms for the discontinuance or amendment of one or more of the payments under the Covid Restrictions Support Scheme (or for their variation) in defined circumstances;

(iv) to take account of the need to reflect changes in circumstances of persons who, as businesses, are persons in respect of whom payments under the Covid Restrictions Support Scheme are being made, in cases where such persons avail themselves of other financial supports provided by the State;

(v) to take account of changes in the State’s economic circumstances and the demands on its financial resources which may occur in the remainder of the current financial year and thereafter.

(d) It shall be the duty of the Minister for Finance to monitor and superintend the administration of the Covid Restrictions Support Scheme (but this paragraph does not derogate from the function of the care and management conferred on the Revenue Commissioners by section 485(21)).

(e) Without prejudice to the generality of paragraph (d), the Minister for Finance shall cause an assessment, at such intervals as he or she considers appropriate but no less frequently than every 3 months beginning on 13 October 2020, of the following, and any other relevant matters, to be made—

(i) up-to-date data compiled by the Department of Finance relating to the State’s receipts and expenditure,

(ii) up-to-date data from the register commonly referred to as the ‘Live Register’ and data related to that register supplied to the Department of Finance by the Department of Business, Enterprise and Innovation (whether data compiled by that last-mentioned Department of State from its own sources or those available to it from sources maintained elsewhere in the Public Service),

(iii) such other data as the Minister for Finance may consider relevant in relation to the impact from, and effects of, Covid-19 or the fact (should that be so) of there not being an agreement of the kind referred to in paragraph (a)(ii),

and, if the following is commissioned, by reference to an assessment, on economic grounds, of the Covid Restrictions Support Scheme that may be commissioned by the Minister for Finance and any opinion as to the sustainability of the scheme expressed therein.

(f) Following an assessment under paragraph (e), it shall be the duty of the Minister for Finance, after consultation with the Minister for Public Expenditure and Reform, to determine whether it is necessary to exercise any or all of the powers under subparagraphs (i) to (vi) of subsection (2)(a) so, as appropriate, to—

(i) fulfil, better, the objectives specified in paragraph (a), or

(ii) facilitate the furtherance of any of the purposes specified in paragraph (c),

and, if the Minister for Finance determines that such is necessary, the powers under one, or more than one, as provided in that subsection (2)(a), of those subparagraphs (i) to (vi) shall become and be exercisable by the Minister for Finance.

(2) (a) Where the Minister for Finance makes a determination of the kind lastly referred to in subsection (1)(f), the Minister for Finance shall, as he or she deems fit and necessary—

(i) make an order that the reference in the definition of ‘Covid restrictions’ in section 485(1) to restrictions provided for in regulations made under sections 5 and 31A of the Health Act 1947 that are for the purpose of preventing, or reducing the risk of, the transmission of Covid-19 and which have the effect of restricting the conduct of certain business activity during the specified period shall be limited in such respects as are specified in the order (including, if the Minister for Finance considers appropriate, by the specification of a requirement, with respect to the restriction of certain business activity, that particular business activity must be affected by the restriction to a specified extent) and an order under this subparagraph shall make such additional modifications to the provisions of section 485 as the Minister for Finance may consider necessary and appropriate in consequence of the foregoing limitation,

(ii) make an order that the day referred to in the definition of ‘specified period’ in section 485(1) as the day on which the period there referred to shall expire shall be such day as is later than 31 March 2021 (but not later than 31 December 2021) as the Minister for Finance considers appropriate and specifies in the order,

(iii) make an order that the percentage specified in section 485(4)(b)(i) shall be such a percentage, that is greater or lower than the percentage specified in that provision, as the Minister for Finance—

(I) considers necessary to—

(A) fulfil, better, the objectives specified in subsection (1)(a), or

(B) facilitate the furtherance of any of the purposes specified in subsection (1)(c),

and

(II) specifies in the order,

(iv) make an order that the percentage specified in subparagraph (i)(I) or subparagraph (ii)(I) of section 485(7)(a) shall be such a percentage, that is greater or lower than the percentage specified in that subparagraph (i)(I) or subparagraph (ii)(I), as the Minister for Finance—

(I) considers necessary to—

(A) fulfil, better, the objectives specified in subsection (1)(a), or

(B) facilitate the furtherance of any of the purposes specified in subsection (1)(c),

and

(II) specifies in the order,

(v) make an order that the percentage referred to in subparagraph (i)(II) or subparagraph (ii)(II) of section 485(7)(a) shall be such a percentage, that is greater or lower than that percentage specified in that subparagraph (i)(II) or subparagraph (ii)(II), as the Minister for Finance—

(I) considers necessary to—

(A) fulfil, better, the objectives specified in subsection (1)(a), or

(B) facilitate the furtherance of any of the purposes specified in subsection (1)(c),

and

(II) specifies in the order,

(vi) make an order either that subsection (8) of section 485 shall cease to be in operation on and from such day, or that the election referred to in paragraph (b) of that subsection, which that subsection enables a qualifying person to make, shall not be exercisable save in such circumstances, as the Minister for Finance—

(I) considers necessary to—

(A) fulfil, better, the objectives specified in subsection (1)(a), or

(B) facilitate the furtherance of any of the purposes specified in subsection (1)(c),

and

(II) specifies in the order,

and any matter that is provided for in the preceding subparagraphs is referred to in section 485(3) as a ‘modification’.

(b) Where an order under subparagraph (i), (ii), (iii), (iv), (v) or (vi) of paragraph (a) is proposed to be made, a draft of the order shall be laid before Dáil Éireann and the order shall not be made unless a resolution approving of the draft has been passed by that House.

Covid Restrictions Support Scheme

485. (1) In this section—

‘applicable business restrictions provisions’ shall be construed in the manner provided for in the definition of ‘Covid restrictions period’ in this subsection;

‘business activity’, in relation to a person carrying on a trade either solely or in partnership, means—

(a) where customers of the trade acquire goods or services from that person from one business premises, the activities of the trade, or

(b) where customers of the trade acquire goods or services from that person from more than one business premises, the activities of the trade relevant to each business premises,

and where customers of the trade acquire goods or services from that person other than through attending at a business premises, that portion of the trade which relates to transactions effected in that manner shall be deemed to relate to the business premises or, where there is more than one business premises, shall be apportioned between such business premises on a just and reasonable basis;

‘business premises’, in relation to a business activity, means a building or other similar fixed physical structure from which a business activity is ordinarily carried on;

‘chargeable period’ has the same meaning as in section 321(2);

‘claim period’ means a Covid restrictions period, or a Covid restrictions extension period, as the context requires;

‘Covid-19’ has the same meaning as it has in the Emergency Measures in the Public Interest (Covid-19) Act 2020;

‘Covid restrictions’ means restrictions provided for in regulations made under sections 5 and 31A of the Health Act 1947, being restrictions for the purpose of preventing, or reducing the risk of, the transmission of Covid-19 and which have the effect of restricting the conduct of certain business activity during the specified period;