Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

I move amendment No. 21:

In page 19, between lines 21 and 22, to insert the following:“Amendment of Parts 9 and 36 of, and Schedule 25B to, Principal Act (capital allowances for equipment and buildings used for the purposes of providing childcare services or a fitness centre to employees)

12.(1) Chapter 2 of Part 9 of the Principal Act is amended by inserting the following after section 285A:

“Acceleration of wear and tear allowances for childcare and fitness centre equipment

285B.(1) In this section⁠—

‘qualifying expenditure’ means capital expenditure incurred on qualifying machinery or plant by a person carrying on a qualifying trade;

‘qualifying machinery or plant’ means machinery or plant in use in a qualifying premises;

‘qualifying premises’ has the same meaning as it has in section 843B;

‘qualifying trade’ has the same meaning as it has in section 843B.

(2) Where a person has incurred qualifying expenditure, and for any chargeable period a wear and tear allowance is to be made under section 284, subsection (2) of that section shall apply as if the reference in paragraph (ad) of that subsection to 12.5 per cent were a reference to 100 per cent.”.

(2) (a) Part 36 of the Principal Act is amended by inserting the following after section 843A:

“Capital allowances for buildings used for the purposes of providing childcare services or a fitness centre to employees

843B. (1)In this section⁠—

‘childcare services’ means any form of childminding services or supervised activities to care for children, whether or not provided on a regular basis, in respect of which it can be shown that the applicable requirements of the Child Care Act 1991 (Early Years Services) Regulations 2016 (S.I. No. 221 of 2016) have been complied with;

‘construction’ has the same meaning as it has in section 270;

‘fitness centre’ means a gymnasium used exclusively in providing a range of facilities designed to improve and maintain the physical fitness and health of participants;

‘qualifying expenditure’ means expenditure incurred by an employer, carrying on a qualifying trade or a profession, on the construction of a qualifying premises;

‘qualifying premises’ means a building or structure which is in use for the purposes of providing either childcare services or the facilities of a fitness centre to employees of the employer referred to in the immediately preceding definition, and where that employer is a company, whether the employees of that company or of a company connected with that company;

‘qualifying trade’ means a trade, other than a trade which consists of the provision of childcare services or a trade which consists wholly or partly of the provision of the facilities of a fitness centre.

(2) The provisions of the Tax Acts relating to the making of allowances or charges in respect of capital expenditure incurred on the construction of an industrial building or structure shall, notwithstanding anything to the contrary in those provisions, apply in relation to qualifying expenditure on a qualifying premises⁠—

(a) as if the qualifying premises were, at all times at which it is a qualifying premises, a building or structure in respect of which an allowance is to be made for the purposes of income tax or corporation tax, as the case may be, under Chapter 1 of Part 9 by reason of its use for the purpose specified in section 268(1)(a), and

(b) where any activity carried on in the qualifying premises is not a trade, as if (for the purposes only of the making of allowances and charges by virtue of paragraph (a)), it were a trade.

(3) In relation to qualifying expenditure incurred on a qualifying premises, section 272 shall apply as if⁠—

(a) in subsection (3)(a)(ii) of that section the reference to 4 per cent were a reference to 15 per cent, and

(b) in subsection (4)(a) of that section the following were substituted for subparagraph (ii):

‘(ii) where capital expenditure on the construction of the building or structure is incurred, 7 years beginning with the time when the building or structure was first used subsequent to the incurring of that expenditure.’.

(4) Notwithstanding section 274(1), no balancing allowance or balancing charge shall be made in relation to a qualifying premises by reason of any event, referred to in that section, which occurs more than 7 years after the qualifying premises was first used subsequent to the incurring of the qualifying expenditure on the construction of the qualifying premises.

(5) Where relief is given by virtue of this section in relation to qualifying expenditure incurred on the construction of a building or structure, relief shall not be given in respect of that expenditure under any other provision of the Tax Acts.

(6) A person shall not be entitled to allowances under this section while that person is regarded as an undertaking in difficulty for the purposes of the Commission Guidelines on State aid for rescuing and restructuring non-financial undertakings in difficulty.”.

(b) Schedule 25B to the Principal Act is amended by inserting the following after the matter set out opposite reference number 50:“

50A.

Section 843B (capital allowances for buildings used for the purposes of providing childcare services or a fitness centre to employees)

An amount equal to⁠— (a) the aggregate amount of allowances (including balancing allowances) made to the individual under Chapter 1 of Part 9 as that Chapter is applied by section 843B, including any such allowances or part of any allowances made to the individual for a previous tax year and carried forward from that previous tax year in accordance with Part 9, or (b) where full effect has not been given in respect of that aggregate for that tax year, the part of that aggregate to which full effect has been given for that tax year in accordance with section 278 and section 304 or 305, as the case may be, or any of those sections as applied or modified by any other provision of the Tax Acts.

(3) This section comes into operation on such day as the Minister for Finance may appoint by order.".

This section introduces a scheme of accelerated capital allowances for the construction of buildings and structures for use in the provision of child care services or fitness centre facilities by employers to employees. The scheme also provides relief for expenditure incurred on related equipment. The rationale for introducing this relief is to help tackle the cost and availability of child care facilities, both of which we know are barriers to work.

The measures will also support the Government's vision for Healthy Ireland by supporting the provision of fitness facilities by employers.

The tax relief will not commence immediately as approval of the European Commission from a state aid perspective is required, on foot of which the scheme will commence by ministerial order.

The relief will work in a similar fashion to other capital allowances. The accelerated allowances for buildings or structures will apply at the rate of 15% per annum for six years and then 10% in year seven in respect of qualifying expenditure. The wear-and-tear allowances for related equipment will operate at an accelerated rate of 100%. The relief is only available to employers that incur qualifying expenditure. Unlike in the past, passive investors cannot avail of relief under the scheme. Where the employer is a company, employees of other companies connected with that company may avail of the services or facilities. I commend the amendment to the House.

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