Finance Bill 2020

Earlier today, the Department of Finance released the first draft of Finance Bill 2020. This Bill sets out the proposed legislative changes required in order to implement the Budget Day announcements of 13 October. In addition to what was announced in the Budget, this Bill also proposes to introduce a number of new measures.

Key measures contained in the Finance Bill:

• Increases in the USC 2% threshold, dependent relative tax credit, and the earned income tax credit.
• Extension of the Help-to-Buy scheme to the end of 2021.
• Introduction of new employer reporting requirements for share schemes.
• Introduction of the new Covid Restrictions Support Scheme (“CRSS”), as announced on Budget Day.
• Modernisation of the Professional Services Withholding Tax regime, through the use of electronic means of transfer of information, data and returns.
• Increase in the rate of Encashment Tax from 20% to 25%.
• Provision for balancing charges on the disposal of Intangible Assets acquired on or after 14 October 2020, regardless of the period of ownership (previously a balancing charge did not arise where the disposal occurred more than 5 years since acquisition).
• Extension of film relief by a year, as announced in the Budget.
• Amendments to the Controlled Foreign Company regime to provide that certain exemptions will not apply where the subsidiary is resident in a country on the EU blacklist.
• Extension of the Knowledge Development Box relief for a further two years until 1 January 2023.
• Amendment to the Revised Entrepreneur’s Relief to allow for relief to apply where shares were held for a continuous period of 3 years at any time prior to the disposal, as announced on Budget Day. Previously the 3 year period must have fallen within the 5 year period immediately prior to disposal in order to qualify for relief.
• Increases in excise on tobacco products, and carbon taxes, as announced in the Budget.
• Waiver of duty on renewals of liquor licences, and public dancing licences as part of the Covid support package for pubs, bars and nightclubs.
• Changes to VRT and motor tax, as announced in the Budget.
• Re-introduction of 9% rate of VAT from 1 November 2020 to 31 December 2021 for restaurant and catering, hotel accommodation, entertainment services, hairdressing, and sale of certain printed matter.
• Increase in the flat rate addition for farmers to 5.6%.
• Provision of temporary zero rating of PPE and certain other related items.
• Extension of relief for farm consolidations for two years.
• Amendments to the relief scheme for land used for residential development, as announced in the Budget.
• Increase in the Bank Levy to maintain the €150m yield for 2021.
• Extension of Consanguinity Relief until the end of 2023.
• Amendments throughout tax law to allow for the tax neutral migration of shares from a UK central securities depository to one in Belgium.

If you have any questions on what the Finance Bill means for you or your business, please contact a member of the BDO Tax Team.

Finance Bill Stages

The Department of Finance have also released the expected timetable for the various stages of the Finance Bill. Key dates are as follows:

It is expected that Finance Act 2020 will be signed into law before the end of 2020.

Department of Finance Documents

• Finance Bill 2020
• Finance Bill 2020 – Explanatory memo