Tax Code: 27 May 2021: Written answers (KildareStreet.com)

Joe O'Brien (Dublin Fingal, Green Party)
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127. To ask the Minister for Finance if consideration will be given to permitting self-employed persons who have been out of work during the pandemic to warehouse their tax liability for 2020 for a period of time until their finances have recovered; and if he will make a statement on the matter. [28815/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 127 and 133 together.

The Finance Act 2020 legislated for warehousing of certain income tax liabilities of self-assessed income taxpayers, including the self-employed, whose income has been affected by the restrictions introduced to combat Covid-19. I am advised by Revenue that the debt warehousing scheme already provides for the warehousing of income tax liabilities for 2020 and, where appropriate, 2021, for taxpayers who meet the eligibility criteria.

The liabilities that may be warehoused under this scheme are the balance of self-assessed income tax, PRSI and USC for 2019 and preliminary tax, PRSI and USC for 2020, which were due to be paid on or before 31 October 2020, or 10 December 2020 where the individual filed electronically through ROS; and, in certain circumstances, the balance of self-assessed income tax, PRSI and USC for 2020 and preliminary tax, PRSI and USC for 2021, which are due to be paid on or before 31 October 2021 or 17 November2021, if filed electronically.

To qualify for warehousing, an individual must declare that s/he estimates her/his total income for 2020 or 2021, as appropriate, will be at least 25% lower than her/his total income for 2019, due to the impact of Covid-19 restrictions. If the individual was not a self-assessed taxpayer in 2019, s/he will be eligible for warehousing if, as a result of the effect on her/his income of Covid-19 restrictions, s/he is unable to pay her/his income tax liabilities in 2020 or 2021. Where the relevant condition is satisfied, any self-assessed taxpayer is eligible for income tax warehousing, regardless of what sector s/he operates in.

The “Covid-19 income tax” will be subject to 0% interest for a period of twelve months and 3% interest per annum thereafter until the liability is paid in full. Where an individual is eligible for warehousing of the balance of 2020 income tax, PRSI and USC and preliminary income tax, PRSI and USC for 2021, s/he can avail of 0% interest on the warehoused amounts for an additional twelve months.

To avail of the 0% and reduced 3% interest rates, the individual must comply with her/his other tax obligations and, prior to the expiration of the zero-interest period, must enter into a payment plan with Revenue to pay the warehoused debt. The benefit of the warehouse scheme is conditional on the individual quantifying her/his tax debt through submission of all outstanding returns. If an individual fails to meet the conditions for debt warehousing – for example, if s/he fails to file a return or defaults on other taxes - the benefit of the 0% and 3 % interest rates will no longer apply and interest at a rate of 8% per annum will be re-imposed.

An information booklet giving full details of this scheme is available on the Revenue website.

Finally, Revenue adopts a pragmatic approach to businesses with genuine payment difficulties and has advised me that any business or tax agent who is struggling to meet their obligations should contact the relevant Revenue Branch Manager (via myEnquiries) to discuss the matter.

Paschal Donohoe (Dublin Central, Fine Gael)
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The Disabled Drivers & Disabled Passengers Scheme provides relief from VRT and VAT on the purchase and use of an adapted car, as well as an exemption from motor tax and an annual fuel grant.

The Scheme is open to severely and permanently disabled persons as a driver or as a passenger and also to certain organisations. In order to qualify for relief an organisation must be entered in the register of charitable organisations under Part 3 of the Charities Act 2009, be engaged in the transport of disabled persons and whose purpose is to provide services to persons with disabilities.

In order to qualify for relief the applicant must hold a Primary Medical Certificate (PMC) issued by the relevant Senior Area Medical Officer (SAMO) or a Board Medical Certificate (BMC) issued by the Disabled Driver Medical Board of Appeal. Certain other criteria apply in relation to the vehicle and its use, including that the vehicle must be specially constructed or adapted for use by the applicant.

The terms of the Scheme set out the following medical criteria, and that one or more of these criteria is required to be satisfied in order to obtain a PMC:

- be wholly or almost wholly without the use of both legs;

- be wholly without the use of one leg and almost wholly without the use of the other leg such that the applicant is severely restricted as to movement of the lower limbs;

- be without both hands or without both arms;

- be without one or both legs;

- be wholly or almost wholly without the use of both hands or arms and wholly or almost wholly without the use of one leg;

- have the medical condition of dwarfism and have serious difficulties of movement of the lower limbs.

A Supreme Court decision of 18^thJune found in favour of two appellants against the Disabled Drivers Medical Board of Appeal's refusal to grant them a PMC. The judgement found that the medical criteria set out in the Regulations did not align with the regulation making mandate given in the primary legislation to further define criteria for ‘severely and permanently disabled’ persons.

On foot of the legal advice received, it became clear that it was appropriate to revisit the six medical criteria set out in Regulation 3 of Statutory Instrument 353 of 1994 for these assessments. In such circumstances, PMC assessments were discontinued until a revised basis for such assessments could be established. The medical officers who are responsible for conducting PMC assessments need to have assurance that the decisions they make are based on clear criteria set out in legislation. While Regulation 3 of Statutory Instrument No. 353 of 1994 was not deemed to be invalid, nevertheless it was found to be inconsistent with the mandate provided in Section 92 of the Finance Act 1989.

In order to allow for the PMC assessments and appeals to recommence I brought forward an amendment to the Finance Bill to provide for the existing medical criteria in primary legislation which, following the approval of the Finance Act 2020, allowed assessments to recommence.

Following approval of the Finance Act 2020, a comprehensive review of the scheme, to include a broader review of mobility supports for persons with disabilities and the criteria for qualification for the Scheme, will be conducted this year. On foot of that review new proposals will be brought forward for consideration.

Paschal Donohoe (Dublin Central, Fine Gael)
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The Disabled Drivers & Disabled Passengers Scheme provides relief from VRT and VAT on the purchase and use of an adapted car, as well as an exemption from motor tax and an annual fuel grant.

The Scheme is open to severely and permanently disabled persons as a driver or as a passenger and also to certain organisations. In order to qualify for relief an organisation must be entered in the register of charitable organisations under Part 3 of the Charities Act 2009, be engaged in the transport of disabled persons and whose purpose is to provide services to persons with disabilities.

In order to qualify for relief the applicant must hold a Primary Medical Certificate (PMC) issued by the relevant Senior Area Medical Officer (SAMO) or a Board Medical Certificate (BMC) issued by the Disabled Driver Medical Board of Appeal. Certain other criteria apply in relation to the vehicle and its use, including that the vehicle must be specially constructed or adapted for use by the applicant.

The terms of the Scheme set out the following medical criteria, and that one or more of these criteria is required to be satisfied in order to obtain a PMC:

- be wholly or almost wholly without the use of both legs;

- be wholly without the use of one leg and almost wholly without the use of the other leg such that the applicant is severely restricted as to movement of the lower limbs;

- be without both hands or without both arms;

- be without one or both legs;

- be wholly or almost wholly without the use of both hands or arms and wholly or almost wholly without the use of one leg;

- have the medical condition of dwarfism and have serious difficulties of movement of the lower limbs.

A Supreme Court decision of 18^thJune found in favour of two appellants against the Disabled Drivers Medical Board of Appeal's refusal to grant them a PMC. The judgement found that the medical criteria set out in the Regulations did not align with the regulation making mandate given in the primary legislation to further define criteria for ‘severely and permanently disabled’ persons.

On foot of the legal advice received, it became clear that it was appropriate to revisit the six medical criteria set out in Regulation 3 of Statutory Instrument 353 of 1994 for these assessments. In such circumstances, PMC assessments were discontinued until a revised basis for such assessments could be established. The medical officers who are responsible for conducting PMC assessments need to have assurance that the decisions they make are based on clear criteria set out in legislation. While Regulation 3 of Statutory Instrument No. 353 of 1994 was not deemed to be invalid, nevertheless it was found to be inconsistent with the mandate provided in Section 92 of the Finance Act 1989.

In order to allow for the PMC assessments and appeals to recommence I brought forward an amendment to the Finance Bill to provide for the existing medical criteria in primary legislation which, following the approval of the Finance Act 2020, allowed assessments to recommence.

Following approval of the Finance Act 2020, a comprehensive review of the scheme, to include a broader review of mobility supports for persons with disabilities and the criteria for qualification for the Scheme, will be conducted this year. On foot of that review new proposals will be brought forward for consideration.

Written answers

Thursday, 27 May 2021

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Department of Finance

Tax Code

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