The COVID-19 global pandemic is disrupting businesses all over the world. As we all navigate this challenging time, businesses need to be proactive in managing the tax effects of this unforeseen interruption on their business.
At the same time as managing the critical public health aspects, the government and Irish Tax Authorities are moving quickly to deal with the economic consequences of what will be a significant downturn in business activity. Tax policy will have a leading role to play in supporting, and then boosting economic activity.
In most cases the impact for business falls into two categories, firstly what needs to be done immediately and then secondly what are the medium-term changes that will be required. In some sectors (such as hospitality, travel and tourism) where there has been an immediate drop in revenue, both categories come together and need to be considered immediately.
As part of our business continuity services, our team can offer corporate tax advice on the areas that require consideration at this time, from cash flow issues to problems with tax payments. We are supporting businesses to act now to mitigate the worst of the impact.
What businesses can do now
The Irish Tax authorities have introduced specific measures to support businesses at this time. These include a suspension on the application of interest on late payments, a suspension of debt enforcement activity, current tax clearance status and tax return instructions for businesses with cash flow difficulties. We have a full breakdown of the updates here. Our team can work with your business to ensure you are doing everything required to utilise the best available concessions.
Employment costs are an immediate concern for businesses. Where workers are being temporarily laid off as a result of the Covid-19 pandemic, Revenue have launched a new Covid Employer Refund Scheme on behalf of the Department of Employment Affairs and Social Protection. This allows employers to make a weekly support payment to their employees through their normal payroll process. Employers will be reimbursed for amounts paid to employees. It is hoped that this scheme will keep as many people as possible on the payroll.
The Government’s package to ease the fallout from the Covid-19 pandemic is likely to play a vital role in helping the economy to bounce back at the end of the crisis. As the situation evolves, there may be further measures introduced to boost economic activity, including specific tax changes.
Businesses will need to quickly adapt to changes in supply chains as a result of shortages of key goods and services or changes in customer demand. For internationally active companies, aspects of doing business globally such as global mobility, transfer pricing and VAT issues will need to be considered.
How RSM can help
Planning, prioritisation and then effective implementation are all key, along with the flexibility to revisit plans as global and local factors impact your business over the coming months. Our dedicated Business Continuity team can support your business in these challenging and uncertain times by offering practical advice and innovative solutions to continuity issues and contingency plans.
Please do not hesitate to contact us for a discussion as to how our advice and support can benefit your organisation. Our multi-disciplinary Business Continuity team can harness our expertise across audit and advisory, tax, transaction and management consulting to advise on a full range of continuity planning and resource services.
If you have any questions or require further information or assistance with the potential impacts of the coronavirus, please contact our Business Continuity team today.