Revenue have suspended the charging of interest on late payments of February, March and April PAYE (Employers) liabilities. This automatic exemption applies to SMEs only – other taxpayers are dealt with on a case by case basis. See further detail in VAT section below.
Relaxation of Benefit in Kind rules / Employee deductions
EWorking from home
- No BIK will arise where employers provide equipment such as laptops, printers, scanners and office furniture in order for employees to set up a working space in their homes.
- Revenue allow an employer make a tax free payment of €3.20 per day to an employee to reimburse home office costs.
- Alternatively the employee can claim a deduction for expenses incurred based on the formula:
Allowable utility bills x number of days e-working/365 x 10%*
*as a rule of thumb Revenue will accept 10% of home as being attributable to home office
For the duration of the Covid-19 restrictions, where an employee is in receipt of a vehicle (car or van) provided by his or her employer, the following may apply:
(a) Employer Takes Back Possession of the Vehicle
Where an employer takes back possession of the vehicle and an employee has no access to the vehicle, no BIK applies.
(b) Employer Prohibits Use
Where an employee retains possession of a vehicle, but the employer prohibits the use of the vehicle, no BIK shall apply if the vehicle is not used for private use. Records should be maintained to prove same.
(c) Employer Allows Private Use
Where an employee has a car provided by his or her employer and
- limited or reduced business mileage (if any) is undertaken during the period of the COVID-19 crisis and
- personal use is limited
the amount of business mileage travelled in January 2020 may be used as a base month for the purposes of calculating the amount of BIK due.
Small Benefit Exemption
There has been a relaxation to the rules around vouchers, namely that Revenue in 2020 will allow more than one voucher to be awarded in the calendar year (normally this is limited to one voucher per tax year) to allow scope for employers to recognise exceptional efforts for staff working during the crisis. This concession can only apply to staff who work during the restricted period, which would be the case for a supermarket. The overall cumulative tax-free limit of €500 still remains, only now you can pay by way of multiple vouchers over the year if desired for these key staff.
No BIK will arise on reimbursements by an employer to an employee regarding holiday/flight cancellations or in relation to costs of assisting employees returning to the State provided:
- Provided the employee is integral to the business and was required by his employer to return to deal with COVID-19 related issues,
- the costs incurred are reasonable and o the employee is not otherwise compensated (i.e. via an insurance policy or direct claim to the service provider).
This may include costs related to family members who were on holiday or due to go on holidays with the employee.
Employer Provided Accommodation
No charge to BIK arises for the duration of the COVID-19 crisis on the provision of employer-provided temporary accommodation provided:
- the accommodation is temporary in nature and
- the reason is to mitigate against the risk of transmission.
How RBK can help?
If you need assistance to avail of any of the above measures or wish to discuss in confidence, please contact your usual RBK contact or:
Jackie Masterson, Tax Partner
Patrick Fannon, Senior Tax Manager