Revenue E-Brief Updates - Income Tax 2021

Revenue e-Brief 006/22

It is worth noting, that the below information should not raise any concern for any Umbrella clientele, or to Personal Limited Companies managed by Icon Accounting, however, it may be deemed useful for Independent Professionals who opt to manage their compliance in-house.

In March 2020, the Covid-19 Pandemic brought about the introduction of the Temporary Wage Subsidy Scheme (TWSS). This was introduced to provide financial support to workers affected by the pandemic.

The TWSS did not take the taxes at source which we would all be familiar with when we receive our net-pay from our employers into account, and in many circumstances, this gave rise to an unexpected tax liability at the beginning of 2021.

Class A PRSI employees were given the option to defer the liability to January 2022 and the option to repay the liability through a reduction in their annual tax credits for the four years from 2022 to 2025 inclusive, which therefore reduced the impact initially felt on their pocket. 
Unfortunately, Class S PRSI Directors did not get the same option.

This follows on from existing legislation, Section 997A TCA 1997, whereby proprietary directors cannot claim a credit for PAYE or USC deducted from their remuneration until the tax has been paid in full to Revenue.
This section has now been updated to reflect the debt warehousing scheme which was also introduced by Revenue because of the Covid-19 Pandemic.

Now, where an Employer is availing of Debt Warehousing for PAYE as an Employer, the director of the company can avail of Income Tax Warehousing on their Schedule E liabilities. This allows directors to defer paying some of this tax liability until they are in a position financially to repay the outstanding taxes owed to Revenue.

If you would like to find out more information on the Debt Warehousing Scheme, or on the Credit in respect of tax deducted from emoluments of certain directors, you can do so here.

Rest assured, that if you are in contact with your account manager at Icon Accounting, you have nothing to worry about.

If you are currently with another provider or managing your own tax compliance and would like to reach out for more information, please get in touch with our team of advisors on 01-807 7106 or by emailing info@iconaccounting.ie