The Revenue Commissioners have increased the allowance for the cycle to work scheme. From the 1 August 2020 the allowance for a traditional bike is increased to €1,250. The allowance for an electric bike is now €1,500. The exemption does not apply to motorbikes, scooters or mopeds. Where the cost of the bike or electric bike exceeds the allowance tax must be applied to the balance exceeding the limit.
An employer can choose to give the bike to the employee. Alternatively, if an employee wants a bike but the employer doesn’t want to incur the cost, the employer can allow the employee to write the cost of the bike off against their gross salary. For example, the bike and safety equipment cost €750, the employees gross monthly salary is €3,000. The employer buys the bike and equipment and reduces the employee’s gross monthly salary to €2,250. The employer has incurred no extra cost while the employee gets the same salary when you take into account the bike but is only taxed on the €2,250.
Have a read through the guide the Revenue have produced which you can find here.
As part of the Government’s July Jobs Stimulus, the standard VAT rate of 23% will be temporarily reduced to 21%. This will come into effect from the 1st September 2020 and stay in place until the end of February 2021.
The Revenue have a guide on how businesses should deal with VAT rate changes, which you can find here. One thing to highlight from the guide is if you are sending an invoice to a VAT registered business the VAT rate that should be applied is the rate in force at the time of issue of the invoice. If you are sending an invoice to a non-VAT registered person the VAT rate applied on the invoice will be based on the date the goods or services were supplied, not the date of the invoice.
From an accounting point of view most systems should be able to deal with a new rate of VAT. I would suggest adding a new VAT rate as you will need to revert to the 23% from the 1st March 2021. For businesses who pay VAT on a receipts basis you will need to make sure your systems are tracing the VAT back to the invoice and not the date of the lodgement.
The Temporary Wage Subsidy Scheme (TWSS) is changing to the Employment Wage Subsidy Scheme (EWSS). Unfortunately, there is more involved than a name change. The new EWSS comes into effect from the 1 September 2020. In order to qualify for the EWSS your business must suffer a 30% reduction in Turnover/Orders for the period July to December 2020 compared to the Turnover/Orders for July to December 2019.
If you qualify for the EWSS you are required to undertake a review on the last day of every month to ensure you continue to meet the above eligibility criteria. If you no longer qualify, you should deregister for EWSS with effect from the following day i.e. the first day of the next month.