Hundreds of people running small businesses in Galway will soon find out if they might be exempt from paying tax on the Covid-19 support payments they received last year.
Currently, companies can opt to pay the tax and USC liabilities of their employees’ payments under the Temporary Wage Subsidy Scheme introduced in March 2020, without the workers being liable for benefit-in-kind tax.
However, the one-off waiver of benefit-in-kind tax does not apply to proprietary directors, the owners or co-owners of businesses, even though they may have no other income.
The issue arose in the Dáil this week following a question from Independent Galway West TD, Noel Grealish to the Finance Minister Paschal Donohoe. The Minister told the TD that the exemption applies to employees who are self-assessed taxpayers, as well as those who are taxed through the PAYE system.
.
Independent Galway West TD, Noel Grealish.
“The issue of extending the BIK concession to proprietary directors is under active consideration by Revenue and it expects to publish additional guidance on the matter shortly,” the Minister added.
Dep Grealish said he hoped the exemption from benefit-in-kind tax would be extended to proprietary directors
“There must be hundreds running small businesses in Galway city and county, like local shops or cafés, small leisure business operators, or a host of other small-time enterprises,” he said. “It’s only fair they should get the business to pay their tax liabilities on the payments they received, just like employees can, without being penalised.
“For so many, they would have no other source of income to fall back on and this subsidy was vital. I hope the Revenue guidance due out soon will rectify this anomaly.”
