Finance Act, 1998
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Chapter 3 Income Tax, Corporation Tax and Capital Gains Tax | ||
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Relief for the long-term unemployed. |
16.—The Principal Act is hereby amended— | |
(a) in Chapter 6 of Part 4 by the insertion of the following section after section 88: | ||
“Double deduction in respect of certain emoluments. | ||
88A.—(1) In this section— | ||
‘chargeable period’ has the same meaning as in section 321(2); | ||
‘emoluments’, ‘employment’, ‘employment scheme’, ‘qualifying employment’, and ‘qualifying individual’ have the same meanings, respectively, as in section 472A; | ||
‘qualifying period’, in relation to a qualifying employment, means the period of 36 months beginning on the date when that employment commences. | ||
(2) (a) Where in the computation of the amount of the profits or gains of a trade or profession for a chargeable period, a person is, apart from this section, entitled to a deduction (in this subsection referred to as ‘the first-mentioned deduction’) on account of— | ||
(i) emoluments payable to a qualifying individual in respect of a qualifying employment, and | ||
(ii) the employer's contribution to the Social Insurance Fund payable, in respect of those emoluments, under the Social Welfare Acts, | ||
that person shall be entitled in that computation to a further deduction (in this subsection referred to as ‘the second-mentioned deduction’) equal to the amount of the first-mentioned deduction as respects that qualifying employment. | ||
(b) Relief under this section, in respect of a qualifying employment, shall not be granted— | ||
(i) in respect of a second-mentioned deduction which relates to a chargeable period or part of a chargeable period outside the qualifying period in relation to such qualifying employment, or | ||
(ii) if the claimant or the qualifying individual is benefiting, or has benefited, under an employment scheme, whether statutory or otherwise. | ||
(c) For the purposes of this section, an activity, programme or course mentioned in section 472A(1)(b)(i) shall be deemed not to be an employment scheme.”, | ||
(b) in Chapter 1 of Part 15— | ||
(i) in section 458, by the insertion in Part 1 of the Table to that section of “Section 472A” after “Section 472”, and | ||
(ii) by the insertion of the following section after section 472: | ||
“Relief for the long-term unemployed. | ||
472A.—(1) (a) In this section— | ||
‘director’ and ‘proprietary director’ have the same meanings, respectively, as in section 472; | ||
‘emoluments’ has the same meaning as in subsection (1)(a) of section 472 and, in relation to the exclusions from that definition, subsection (2) of that section shall apply accordingly; | ||
‘employment’ means an office or employment of profit such that any emoluments of the office or employment of profit are to be charged to tax under Schedule E; | ||
‘employment scheme’ means a scheme or programme which provides for the payment in respect of an employment to an employer or an employee of a grant, subsidy or other such payment funded wholly or mainly, directly or indirectly, by the State or by any board established by statute or by any public or local authority; | ||
‘qualifying child’, in relation to a claimant and a year of assessment, has the same meaning as in section 462, and the question of whether a child is a qualifying child shall be determined on the same basis as it would be for the purposes of section 462, and subsections (4) and (6) of that section shall apply accordingly; | ||
‘qualifying employment’ means an employment which— | ||
(i) commences on or after the 6th day of April, 1998, | ||
(ii) is of at least 30 hours duration per week, and | ||
(iii) is capable of lasting at least 12 months, | ||
but does not include— | ||
(I) an employment from which the previous holder was unfairly dismissed, | ||
(II) an employment with a person who, in the 26 weeks immediately prior to the commencement of an employment by a qualifying individual, has reduced, by way of redundancy, the number of employees in such person's trade or profession, or | ||
(III) an employment in respect of which more than 75 per cent of the emoluments therefrom arise from commissions; | ||
‘qualifying individual’ means an individual who commences a qualifying employment and who— | ||
(i) (I) immediately prior to the commencement of that qualifying employment has been continuously unemployed within the meaning of section 120 (3) of the Social Welfare (Consolidation) Act, 1993 , for a period of 312 days and has been in— | ||
(A) receipt of unemployment benefit under Chapter 9 of Part II of that Act, | ||
(B) receipt of unemployment assistance under Chapter 2 of Part III of that Act, or | ||
(C) receipt of one-parent family payment under Chapter 9 of Part III of that Act, or | ||
(II) is in any other special category of persons approved of for the purposes of this section by the Minister for Social, Community and Family Affairs with the consent of the Minister for Finance, | ||
and | ||
(ii) was not previously a qualifying individual for the purposes of this section; | ||
‘unemployment payment’ means a payment of unemployment benefit or unemployment assistance payable under the Social Welfare Acts. | ||
(b) For the purposes of the definition of ‘qualifying individual’— | ||
(i) any period of— | ||
(I) attendance at a non-craft training course provided or approved of by An Foras Áiseanna Saothair, | ||
(II) participation in a programme administered by An Foras Áiseanna Saothair and known as the Community Employment Scheme, | ||
(III) participation in a programme administered by An Foras Áiseanna Saothair and known as the Job Initiative, | ||
(IV) participation in, or participation in or attendance at, an activity to which paragraph (g) or (h), respectively, of section 120 (5) of the Social Welfare (Consolidation) Act, 1993 , relates, | ||
shall be deemed to be a period of unemployment for the purposes of this section, and | ||
(ii) any payment in respect of a period of attendance at, or participation in, an activity, programme or scheme mentioned in subparagraph (i) shall be deemed to be an unemployment payment for the purposes of this section if the qualifying individual concerned was in receipt of an unemployment payment immediately prior to the commencement of such period. | ||
(2) Subject to the provisions of this section, where an individual proves that he or she is a qualifying individual, he or she shall, in relation to the 3 years of assessment commencing with either— | ||
(a) the year of assessment in which a qualifying employment commences, or | ||
(b) by election made by him or her in writing to the inspector, the year of assessment following the year of assessment in which the qualifying employment commences, | ||
be entitled, in computing the amount of his or her taxable income, to have a deduction made from so much of his or her total income as is attributable to emoluments from that qualifying employment as follows: | ||
(i) for the first of those 3 years, £3,000, | ||
(ii) for the second of those 3 years, £2,000, and | ||
(iii) for the third of those 3 years, £1,000. | ||
(3) (a) Subject to the provisions of paragraphs (b) and (c), where a qualifying individual who is entitled to a deduction under subsection (2) for one or more of the 3 years of assessment referred to in that subsection proves that, for one or more of those years, a qualifying child is resident with him or her for the whole or part of the year, he or she shall, in respect of each of the 3 years referred to in subsection (2) in relation to which he or she so proves, be entitled, in computing the amount of his or her taxable income, to have a deduction made from so much of his or her total income as is attributable to emoluments from the qualifying employment as follows: | ||
(i) for the first of those 3 years, £1,000 in respect of each qualifying child, | ||
(ii) for the second of those 3 years, £666 in respect of each qualifying child, and | ||
(iii) for the third of those 3 years, £334 in respect of each qualifying child. | ||
(b) Only one deduction of £1,000, £666 and £334 shall be allowed in respect of each qualifying child. | ||
(c) Where for a year of assessment, 2 or more qualifying individuals would but for this paragraph be entitled under this section to relief in respect of the same qualifying child, the following provisions shall apply: | ||
(i) the amount of the deduction to be granted for that year in respect of the qualifying child will be the amount due under paragraph (a) subject to the provisions of paragraph (b), | ||
(ii) where the qualifying child is maintained by only one of the qualifying individuals concerned, that individual shall be entitled to claim the deduction, | ||
(iii) where the qualifying child is maintained jointly by one or more qualifying individuals, the deduction due for the year of assessment in respect of the child shall be apportioned between the qualifying individuals who contribute to the maintenance of the child— | ||
(I) in the same proportion as each maintains the child, or | ||
(II) in such manner as they jointly notify in writing to the inspector; | ||
(iv) in ascertaining for the purposes of this subsection whether a qualifying individual maintains a qualifying child, any payment made by that individual for or towards the maintenance of the child which the individual is entitled to deduct in computing his or her total income for the purposes of the Income Tax Acts shall be deemed not to be a payment for or towards the maintenance of the child. | ||
(4) Where, within the 3 years mentioned in subsection (3), the qualifying employment (in this subsection referred to as ‘the first-mentioned employment’) in respect of which the qualifying individual is entitled to a deduction under subsection (2) ceases, the qualifying individual shall be entitled to have so much of the deductions mentioned in subsections (2) and (3) as cannot be set against his or her emoluments from the first-mentioned employment carried forward and set against the emoluments from his or her next, and only next, qualifying employment, but the deduction for any year of assessment to be set against the emoluments from either or both qualifying employments shall not exceed the deductions due under subsections (2) and (3) for that year. | ||
(5) (a) The deductions mentioned in subsections (2) and (3) shall not be due if the qualifying individual, or his or her employer, is benefiting, or has benefited, in respect of the qualifying employment in respect of which a claim under this section is made, under an employment scheme, whether statutory or otherwise. | ||
(b) For the purposes of the definition of an employment scheme, an activity, programme or course mentioned in subsection (2) shall be deemed not to be an employment scheme. | ||
(6) Any claim for relief under this section— | ||
(a) shall be made in such form as the Revenue Commissioners may from time to time provide, and | ||
(b) shall contain such information and be accompanied by such statement in writing as may be indicated in the said form as the Revenue Commissioners may reasonably require for the purposes of the section.”, | ||
and | ||
(c) in Chapter 1 of Part 44, by the substitution in section 1024(2)(a)(viii) of “sections 472 and 472A” for “section 472”. |