COVID '19

[dalymount]

Has it been established if tax has to be paid on the 350 or not ?

[Bob Shillin]

Can't see that being in doubt if your income for the year exceeds your tax free allowance.

[john m]

A few years ago they introduced that social welfare payments are taxable but as payments are less than allowances no cash was  due BUT many years ago you could work say you were allowed 100 a week so at week 26 your tax free income was 2600 so  your tax free earnings if you only start working that year from july was 2600 + 100 per week or if you worked for the first 6 months then claimed for 6 months you could get a rebate on all your earnings this meant a lot of seasonal workers like fruit pickers or Butlins workers could get all their tax back but now if you get 203 a week welfare and your tax free allowance is 250 then you only get credited 42 euro as the monies you get on welfare is considered income for tax purposes so the answer to your question is YES the covid payment is considered as income for tax purposes .

Your accountant will let you know 3500 income can you claim any offset for car loans insurance maintenance as you were not engaged in your business .If you changed your insurance to private I wouldnt claim .As self employed I would count the payment as income and include it in my total earnings for the year .Im sure the Rodent will offer guidance .

[Shallowhal]

My accountant told me to continue recording my insurance as i normally would as an expense and also the 350 as earnings......but won't have any other expenses to write off against those earnings.

[john m]

insurance could be questionable if private only

[Shallowhal]

So would the portion of your mobile phone bill that you would normally write off....infact anything work related could and probably will be in doubt.

[Rat Catcher]

Your €350 is income not earnings, Hal. I haven't seen any precise clarification but I'd be 99.36% sure it will be taxable. Not all welfare is taxable, erm. Jobseekers Allowance isn't neither is Child benefit. Jobseekers Benefit is.

Obviously if you make private use of your taxi you will be allocating a greater proportion of motor expenses and wear and tear allowance to private use for 2020 or 2021 as the case may be than you would in normal circumstances.

[dalymount]

I wonder because these are exceptional circumstances, and this is an exceptional payment, will they still look upon it as taxable income, rather then a gesture to help people out in these  uncertain times there is something human about the government performance, but that might all change when normality is restored

[Rat Catcher]

Not impossible but it wouldn't make sense. People are spending less so why should they need more tax free income, bearing in mind we all have a tax free allowance... given as a credit these days. In fact there is no reasonable argument against taxing it... the fact that it's being given to loads of non PAYE earners who aren't accustomed to paying tax isn't a reasonable argument IMO.

[stonethecrows]

100% guarantee that they will come a knockn for tax on the covid payments, Gov aint SVDP you know

[Rat Catcher]

Hard to disagree with that or even construct a rational argument to the contrary. In fact, they have clarified that wages rebated under the wage subsidy scheme are taxable. However, do bear in mind that you may have trading losses to offset (as well as your normal tax credits) and remember you can change your accounting date to enhance taxation efficiency.

[Shallowhal]

100% guarantee that they will come a knockn for tax on the covid payments, Gov aint SVDP you know

John will want to know why the SDLP are involved!!

[Rat Catcher]

A few years ago they introduced that social welfare payments are taxable but as payments are less than allowances no cash was  due BUT many years ago you could work say you were allowed 100 a week so at week 26 your tax free income was 2600 so  your tax free earnings if you only start working that year from july was 2600 + 100 per week or if you worked for the first 6 months then claimed for 6 months you could get a rebate on all your earnings this meant a lot of seasonal workers like fruit pickers or Butlins workers could get all their tax back but now if you get 203 a week welfare and your tax free allowance is 250 then you only get credited 42 euro as the monies you get on welfare is considered income for tax purposes so the answer to your question is YES the covid payment is considered as income for tax purposes .

Interestingly (or not, as ermisms go) you chose an exempt "special case" to illustrate an otherwise partially sound argument. Jobseekers Benefit paid to systematic short-term workers is not taxed.

[Rat Catcher]

OK, now I'm 100% sure it's taxable. It has been clarified since I last looked.

https://www.citizensinformation.ie/en/social_welfare/social_welfare_payments/unemployed_people/covid19_pandemic_unemployment_payment.html

Taxation of COVID-19 Pandemic Unemployment Payment

Revenue has indicated that it will treat the COVID-19 Pandemic Unemployment Payment as taxable income. Depending on a person’s overall income during a year, the COVID-19 Pandemic Unemployment Payment may affect a person’s overall tax liability for the year.