Another month and another government financial support scheme for businesses who need it becomes live. From 1 September businesses who qualify will be entitled to this one off payment, which is a maximum of €15k.

Who Qualifies?

Businesses who can demonstrate their turnover in the period 1 September 2020 to 31 August 2021 will be no more than 25% of a reference turnover amount. In other words the turnover must be down 75% compared to the calendar year 2019 (for businesses who commenced in 2019 or before). If your business commenced before 26 August 2020 then you may still qualify but any business who  commenced after 26 August 2020 will not qualify.

How do you calculate what you are entitled to?

The scheme works similar to the CRSS in terms of doing the calculation. The one off payment will be equal to the following:

• 10% of average weekly turnover for 2019 up to €20,000
• 5% of any excess average weekly turnover above €20,000
• Add the above together and multiply by 3
• Payment is maxed at €15,000

Example

A long established hotel had turnover of €3m in 2019. Its average weekly turnover was €57k. It has remained mostly closed during the period from 1 September 2020 to 31 August 2021. The business qualifies for the BRSS as its turnover is down 75% compared to 2019. It can get 10% of its first €20k (€2k) of weekly turnover and 5% of everything above that (€1,850) [€57k-€20k)*5%]. You add the €2k plus the €1.85k and multiply your answer by 3 giving a total payment of €11,550.

Any other conditions?

Nothing too onerous. As with all other supports tax clearance is necessary for a business to claim the BRSS. The business must be trading at 1 September in order to make the claim. The business must no longer be claiming the CRSS.  All claims to be made on ROS from 1 September.

Anything else to be made aware of?

• Charities and sporting bodies may make a claim even if their income is exempt from income or corporation tax.

• The claim relates to a relevant business activity. You can make a separate claim for each relevant business activity. For instance, if you have a coach business and a restaurant trading out of the one entity then you can make 2 separate claims as they are each a relevant business activity. However, if you have 2 separate hotels operated through a single entity then you can only make one claim as they would be considered the same business activity. Of course, if each hotel was traded through a separate entity, then each entity can make a claim.

• Seasonal businesses which have closed on 1 September will not qualify – the business must be trading on 1 September.

• The scheme may apply for businesses who have undergone a corporate restructure, but you will need to review how this restructure was completed before making the claim.

• The scheme may also apply if the business has been transferred to the next generation, but again caution needs to be advised here as in order to qualify the transferor must have been eligible to claim retirement relief on the transfer to the child.

• All businesses who avail of the scheme will be listed on the Revenue’s website.

As ever if you have any questions on this scheme please contact me or your usual contact within Quintas.

Kind Regards,

Dave O'Brien

Tax Partner

One of the reasons I became a PIP was to clearly understand all the options that are available to someone when they are in financial difficulty.

In a recent case that was referred to us it was clear from our initial review that the only way the couple could retain occupation of their family home was through the Mortgage to Rent scheme.

This was because they were in the mid 50’s, in poor health and their only source of income was from social welfare. Due to this they unfortunately built up significant arrears on their family home loan. They had been through the Mortgage Arrears Resolution Process (MARP) with their bank and following this review there was no solution available to restructure this loan.

They also had historical residual debts with other banks and revenue due to the failure of their business following the last recession. They also had residual debts owing to another bank following the sale of a number of Investment Properties.

Their only option to resolve their insolvent financial position and return them to solvency was through a Personal Insolvency Arrangement (PIA).

As their only source of income was from social welfare, they were unable to offer a dividend to their unsecured creditors over the standard 6-year PIA term or make a contribution towards the family home loan.

As part of their PIA and to avoid them having to leave their family home they were required to seek approval to enter the Mortgage to Rent Scheme. As part of their MTR arrangement their family home would be purchased by the Local Council. They would then enter a tenancy agreement with the Council in which they would pay a nominal rent to the Council based on their affordability. The certainty that they get from entering an approved MTR is that it allows them to occupy their family home for the rest of their lives.

The remainder of the residual debts due was resolved by offering a lump sum payment to their unsecured creditors. As part of their PIA Revenue agreed to ‘opt in’ to have their debt treated as unsecured. This lump sum payment was funded by family members.

This arrangement is known as an ‘Accelerated PIA’ and once the lump sum is paid within the 12-month term the remainder of the outstanding debts were written off.

The above is a summary of a recent case we have completed on behalf of our clients.

If you have any queries on the above please contact me.

Regards

Mark Ryan

Banking and Insolvency Partner

Mark Ryan is authorised by the Insolvency Service of Ireland to carry on practice as a personal insolvency practitioner.

What is LPT and What has Changed?

LPT is a self-assessed tax on residential property. The rate of tax due is based on the value of your home. Therefore, if the value of your home increases, the rate of tax increases. The LPT valuations to date have been based on the value of your home in 2013. Now, for LPT purposes, your home will be revaluated to reflect the price at 1 November 2021. This valuation will determine the amount of LPT payable for the years ranging from 2022 to 2025.

Who is Liable?

Anyone who is an owner of a residential property on 1 November 2021 is liable to pay LPT. This year will be the first year that a lot of taxpayers will pay LPT due to the expiration of previous exemptions given to houses that were built post 2013. 

How Much has it Increased By?

Given that house values have increased substantially since 2013, it is reasonable to expect that your LPT would increase also. However, the rates and bands have increased to offset some of this potential additional liability.

An example of this is seen in Band 3 per the below table. In 2013, a Band 3 property would be valued between €150,000 - €200,000 with an LPT rate of €315. In 2021, Band 3 is now valued between €262,501 - €350,000 with an LPT rate of €315. Therefore, it is hoped that most property owners will pay similar rates for LPT (table below shows 7 of 19 Bands)

What do you need to do?

There are three things you must do to meet your obligations:

• Determine the market value of your property at 1^st November 2021
• Submit your LPT return, including your valuation, by 7 November 2021
• Pay or make arrangements to pay your LPT charge for 2022

1. Determining the Value of Your Property

The next valuation date for LPT is 1 November 2021. The valuation date is for all residential properties in Ireland (Revenue are yet to disclose any details of LPT exemptions).

How to Value your Property

1. Revenue’s Interactive Tool

You can enter your Eircode into the tool below which gives the value of houses in your area. See link here:

https://lpt.revenue.ie/lpt-web/valuation-guide/index.htm

2. The Residential Property Price Register

If you are not satisfied with Revenue’s valuation, you can view the value of properties sold in your area and use it as evidence as to why you believe your house should be valued either over or under Revenue’s guidelines. See link here:

https://propertypriceregister.ie

3. Professional Valuation

You may also obtain a professional valuation to submit to Revenue.

2. How to Submit your Return

• Revenue will issue you a letter through either your MyAccount or via Post.

• This will confirm your LPT obligation and further information such as significant dates

• This letter will have your Property ID and PIN, which alongside your PPS number is necessary to login to the LPT online service

• Simply logon and complete the return

In limited circumstances, you can submit your LPT return via post on Form LPT1.

Please note that Revenue has made an estimate for the LPT liability for all properties in Ireland. Should you not submit your return by the deadline of 7^th November 2021, this valuation will result in LPT becoming payable whether you file a return or not. However, this amount will remain an estimate and as such, you will have to submit an LPT return eventually.

Also please note, that even if you avail of any exemptions for 2022 (which are yet to be announced), you must file a return.

3. How to Pay your LPT liability

If filing your return online, you have the following payment options:

• Single Payment in Full – Annual Debit Instruction (paid on 21 March 2022), or a one-off cash/cheque payment (paid by 12 January 2022)
• Phased Payments – Monthly Direct Debit, Weekly/Monthly cash payments, deduction at source from your salary/wages/pension (payments commence monthly payments on 15 January 2022)

Please note that if you already pay LPT via a recurring payment other than a cash payment, Revenue will continue to use this method to collect the liability.

If you have any further queries regarding LPT, please do not hesitate to contact either myself or one of my colleagues.

Kind Regards,

ESG investing – why you should include it in your investment strategy …

The phrase ‘ESG ‘ you may recently find be popping up on your radar in different ways through social media and news reporting. Its becoming a hot topic for life companies and brokers alike, and one at Quintas Wealth Management which we welcome as a concept and as a practice in investment portfolios for our clients.

ESG stands for Environmental, Social and Governance investing. It is not a new idea, originating as part of a ‘selective investment ‘concept in the 1970s. Present day, it is a central component to a European Union Directive that seeks to position the EU as a 27 nation bloc at the forefront of global efforts to build a financial system that supports sustainable growth and a sustainable economy.

ESG investing promotes positive screening, owning shares in companies that have considered environmental, social and governance factors. These are:

Source: Aviva 2021

Fund managers will be incorporating this in their underlying asset selection. So, for you and me this means these types of funds will be available for investment personally, through your company or through your pension.

And why is this so great you ask? ESG investing incorporates environment, social and governance (ESG) elements into the investment process, in addition to financial considerations. As investors and shareholders we can all positively influence climate change by investing in companies that are committed to tackle global warming and reducing carbon emissions. We can choose to support companies who treat employees fairly and are growing their business sustainably.

And statistics are showing that’s what people are caring about…

Source: Aviva 2021

As an emerging concept there has been some critique, saying ESG investments are too passive and not delivering on returns. So far research has shown positive and consistent returns when ESG is part of a multi asset portfolio. As with all investing, a basic tip is never to put all your eggs in one basket.

At Quintas Wealth Management we believe taking a holistic approach to your portfolio will allow you to benefit from a range of returns, and ESG investing should be a part of it.

The factors driving demand among investors for sustainable business practices are here to stay. Organisations that adopt good ESG policies are also minimising future risks and will be well positioned to take advantage of future opportunities, as well as doing the right thing.

It means that on an individual basis we can do good through our investment choices. The goal of ESG investing is basically to have a positive impact on our society, our environment and ultimately our future.

To quote Captain Planet, the power is yours!

Kind Regards,

Lynda McAuliffe

Client Relationship Manager

The Government have decided that they will be no change to the EWSS rates from 1^st October but will announce any changes in the Budget on 12^th October 2021.

The only change is in relation to the system no longer annualising 2019 figures for businesses which commenced between 1^st January and 31^st October 2019.

Businesses who commenced to trade between 1 January and 31 October 2019 are required to complete all fields in the eligible review form on Revenue website and their eligibility review calculation will be adjusted systematically to account for the shorter review period i.e. date of commencement in 2019 to 31 December 2019 versus equivalent dates in 2021.

This is done by comparing 2019 actuals entered with the comparative period of trading in 2021. For example, if a business commenced to trade on 1 May 2019, the system will compare May to December 2019 with May to December 2021 when undertaking the eligibility review calculation.

Revenue have stated that “while every effort has been made for the system to accurately determine eligibility, EWSS should only be claimed if you are eligible, irrespective of the ERF message. If the ERF advises you are ineligible and you do not believe this is correct, please contact us through MyEnquiries (selecting “Employers’ PAYE” and then “Employer’s PAYE General Enquiry”) to ensure subsidies are not stopped in error”.  

Kind regards,

Sally Turner

Payroll Manager