The amount people will owe will vary greatly. Some will find themselves exempt from bills due to their lower income for 2020, while others even be owed a tax refund from Revenue.
Tax experts are urging those facing bills not to panic, and remember they are not expected to make a “lump sum” payment. For those who do owe tax, their bills will be spread over a number of years in the form of reduced tax credits.
PUP — lower rates
For those who received the PUP, tax liability will range from nothing owed to a bill upwards of €2,000.
The best way to approximate a person’s tax bill is to look at the total 2020 income by combining both their employment income and PUP payments, according to consumer tax manager at Taxback.com, Marian Ryan.
Those whose combined income amounts to less than €16,500 for 2020 are unlikely to face a tax bill, Ms Ryan said.
The standard weekly tax credits for a single person of €63.46 will fully cover any tax liability arising on the two reduced rates of the PUP.
PUP — higher rates
For those who received a higher rate of the PUP, their tax bill will be affected by factors such as their earnings before the pandemic, how long they were in receipt of the PUP, and if they have returned to work on a similar or reduced income.
“There are a never-ending number of variables involved, but it is fair to say that the higher your total 2020 income is, the higher the resulting underpayment is likely to be,” Ms Ryan said.
“If it is between €16,500 and €35,500, you will potentially have to pay 20 per cent of the PUP received as Pay As You Earn (PAYE) and an additional 4.5 per cent approximately of Universal Social Charge (USC).
“If your income is over €35,500 for 2020, the potential PAYE due could be upwards of 40 per cent of your PUP received along with an additional 4.5 per cent of USC to be paid.
“For example, if we look at the €35,000 and €67,500 earners and assume, they received the PUP for 23 weeks and returned to work on the same salary as pre-Covid.
“The €35,000 earner would have an approximate underpayment of €1,347.88 and the €67,500 earner would have an underpayment in the region of €2,492.00.”
Ms Ryan said that taxation will “disproportionately” affect middle-income earners.
Tax bills for those who received the TWSS will also “vary greatly” from person to person, depending on their circumstances, their earnings pre- and post-TWSS, and if their employer topped up their gross weekly wage.
“A typical worker on €35,000 who received the TWSS payment which wasn’t topped up by their employer can now expect to owe Revenue approximately €429,” Ms Ryan said.
“If the same employee received the TWSS and their employer topped-up their gross weekly wage, they can now expect to owe approximately €1,334.
“Similarly, a worker on €67,500 whose income was topped up by their employer to the maximum allowable amount would now expect an underpayment in the region of approximately €2,837.”
These tax bill estimates could potentially be lower, as they do not take into account additional tax credits and expenses that workers can claim in order to reduce their liability.
Wage subsidy tax refunds
Ms Ryan said some workers on higher salaries who received the TWSS could potentially be due a tax refund rather than face a bill.
“The same employee on €67,500 pre-Covid salary, who received the TWSS, but without a top up from their employer on their gross weekly wage, could potentially be due a tax refund (PAYE and USC) of approximately €1,307,” she said.
“The reason for this potential refund is that their 2020 income would have been significantly reduced when they were in receipt of the TWSS.
“They would have paid a substantially higher amount of PAYE and USC in January and February, 2020 on the assumption that their income would have been €67,500 for the entire year.”
Tax experts are reminding workers to “not be alarmed” by the amount owed when they receive their tax bill on Friday.
This bill will come in the form of a preliminary end-of-year statement, which will not include all the tax credits and expenses that a person may be entitled to that will lower or even eliminate their final bill.
Ms Ryan also reminded that no tax bill will have to be paid in the short-term.
Explainer: What to expect in your pandemic tax bil…
“The main thing to bear in mind at this point is that Revenue have already said that this tax liability will not fall due this year, or even next year,” she said.
“Although the option is available to taxpayers to clear the underpayment, people are not expected to make a lump sum payment.
“Instead, what will happen is that Revenue will reduce a person’s tax credits over a period of between two to four years, commencing in 2022.”
Those who received the PUP or TWSS can learn more about how pandemic payments will be taxed this year here: Explainer: What to expect in your pandemic tax bill for PUP and other subsidies.
Ireland’s billionaires’ fortunes increase by €3.28bn during pandemic
Mirroring this global inequality trend, Ireland’s own nine billionaires saw their fortunes increase by €3.28 billion since March — a tenth of which would pay for a Covid-19 vaccine for every person in the Republic of Ireland.
Meanwhile, essential workers – such as our carers and supermarket and factory workers — cared for our vulnerable and kept our food supplies running throughout the pandemic — quite often on minimum or low-paid wages.
Inequality Virus report
Oxfam’s The Inequality Virus report, published to coincide with the opening day of the World Economic Forum’s ‘Davos Agenda’, highlights how Covid-19 has the potential to increase economic inequality in almost every country at once, the first time this has happened since records began over a century ago.
A new global survey commissioned by Oxfam of 295 economists from 79 countries, including Ireland, reveals that 87 percent of respondents, including Jeffrey Sachs, Jayati Ghosh and Gabriel Zucman, expect an ‘increase’ or a ‘major increase’ in income inequality in their country as a result of the pandemic.
This thinking was shared by 85 percent of Irish economists who participated, with most estimating it would be the worst increase in inequality in Ireland since the financial crash of 2008.
Rising inequality means it could take at least 14 times longer for the number of people living in poverty to return to pre-pandemic levels than it took for the fortunes of the top 1,000, mostly white male billionaires, to bounce back.
Jim Clarken, chief executive of Oxfam Ireland, said: “We stand to witness the greatest rise in inequality since records began, with the deep divide between the rich and poor proving as deadly as the virus itself. Around the world the impact of Covid-19 is magnifying and exacerbating existing inequalities – as well as racial and gender divides. One of the most extreme and unjust indicators of inequality we are seeing around the world right now is between those who have access to life saving vaccine and those who don’t’.
“Rigged economies are funnelling wealth to a rich elite who are riding out the pandemic in safety, while those on the frontline— our shop assistants, healthcare workers, and factory workers — are struggling to pay the bills and put food on the table, and often do not have benefits such as paid sick leave.
“The world’s ten richest men have seen their combined wealth increase by half a trillion dollars since the pandemic began —more than enough to pay for a Covid-19 vaccine for everyone and to ensure no one is pushed into poverty by the pandemic. At the same time, the pandemic has ushered in the worst job crisis in over 90 years with hundreds of millions of people now underemployed or out of work.
“In Ireland, the fallout of the pandemic on employment has disproportionately hit young adults as well as people in low-paid occupations, all of whom are more likely to be paying rent. Without significant government intervention, we are looking at a return to long-term unemployment, increasing risks of homelessness and economic insecurity for younger generations in Ireland.
“In addition, women and marginalised racial and ethnic groups are yet again bearing the brunt. They are more likely to be pushed into poverty, more likely to go hungry, and more likely to be excluded from healthcare.
“Long before Covid-19 disrupted our lives, in Ireland and across the world, women sustained our societies through their paid and unpaid care work. They continue to do so as we manage this public health crisis and as the social and economic consequences unfold. However, there is a lack of attention to gender equality in much of the economic decision making that has taken place since the onset of the pandemic.”
Road to recovery
Oxfam said the road to recovery will be much longer for people who were already struggling pre-Covid. When the virus took hold, over half of workers in poor countries were living in poverty, and three-quarters of workers globally had no access to social protections like sick pay or unemployment benefits.
Clarken concluded: “Extreme inequality is not inevitable, but a policy choice. Governments around the world must seize this opportunity to build more equal, more inclusive economies that end poverty and protect the planet.
“The fight against inequality must be at the heart of economic rescue and recovery efforts. Governments must ensure everyone has access to a Covid-19 vaccine and financial support if they lose their job. They must invest in public services and low carbon sectors to create millions of new jobs and ensure everyone has access to a decent education, health, and social care, and they must ensure the richest individuals and corporations contribute their fair share of tax to pay for it.
“These measures must not be band-aid solutions for desperate times but a ‘new normal’ in economies that work for the benefit of all people, not just the privileged few.”
Taoiseach says ‘Ireland is committed to fighting antisemitism, racism’ at Holocaust memorial
Tomi Reichental and Suzi Diamond, the two remaining Holocaust survivors in Ireland, also addressed the event which was organised by Holocaust Education Trust Ireland.
Holocaust Education Trust Ireland works with teachers, students and the wider community to educate about the Holocaust and its place in today’s society.
Mr Martin said: “Education is an important tool in deepening our understanding of the Holocaust…Ireland is committed to fighting antisemitism and racism.
“Today’s ceremony will be addressed by two Holocaust survivors, Tomi Reichental and Susie Diamond, last year’s ceremony marked the 75th anniversary of the liberation of Auschwitz and as we move further away from the horrors of the Holocaust, the value of being able to share the personal experience of Tomi and Susie is incalcuable.”
Education is an important tool in deepening our understanding of the Holocaust…Ireland is committed to fighting antisemitism and racism
— MerrionStreet.ie #StaySafe #HoldFirm (@merrionstreet) January 24, 2021
Man arrested after garda vehicle is struck in Donegal car chase
The incident took place near Tullyearl in Donegal town this afternoon.
A shot was discharged from a Garda firearm during this incident and as a result, GSOC have been notified of the incident.
Gardaí signalled for a jeep, that appeared to be driving in a dangerous manner, to pull over just after 1.30pm at Drumlonagher in Donegal town. This vehicle failed to stop and proceeded to drive away from gardaí.
A managed containment pursuit was carried out and during this, one garda vehicle was struck.
The pursuit concluded near the Tullyearl roundabout when the jeep went off the road.
The driver of the vehicle, a man in his 30s, fled from gardaí when it had come to a stop. The four passengers who had been in the jeep remained at the side of the road. The driver was located in a nearby field a short time later.
One Garda was taken to Letterkenny University Hospital for treatment of injuries following this incident. These injuries are non-life threatening. The driver of the jeep, and four passengers were uninjured.
The four passengers, two women and two men, were arrested at the location and taken to Ballyshannon Garda Station. They have all since been released.
The driver of the jeep has been charged and will now appear before Donegal Town District Court tomorrow morning.