Section 472AA Relief for long-term unemployed starting a business
Section 472AA inserted by Finance (No. 2) Act 2013 section 6 comes into operation from 1 January 2014.
(1) In this section—
“Act of 2005” means the Social Welfare Consolidation Act 2005 ;
“basis period”, in relation to a year of assessment, means the period on the profit or gains of which income tax for the year of assessment is to be finally computed under the Income Tax Acts;
“continuous period of unemployment” has the meaning assigned to it in section 141(3) of the Act of 2005;
“crediting contribution” means a crediting contribution provided for by regulations made under section 33 of the Act of 2005;
“new business” means a trade or profession which is set up and commenced by a qualifying individual during the period beginning on 25 October 2013 and ending on [31 December 2018]1, other than a trade or profession—
(a) which was previously carried on by another person and to which the qualifying individual has succeeded, or
(b) the activities of which were previously carried on as part of another person’s trade or profession;
“qualifying individual” means an individual who commences a new business and—
(i) has been continuously unemployed for the period of 12 months immediately preceding the commencement of that business, and in respect of that period of unemployment, was entitled to crediting contributions, or
(ii) in respect of a continuous period of unemployment of not less than 312 days immediately preceding the commencement of that business, has been in receipt of—
(I) jobseeker’s benefit under Chapter 12 of Part 2 of the Act of 2005,
(II) jobseeker’s allowance under Chapter 2 of Part 3 of the Act of 2005,
(III) one-parent family payment under Chapter 7 of Part 3 of the Act of 2005, or
(IV) partial capacity payment under Chapter 8A of Part 2 of the Act of 2005,
(b) who was not previously a qualifying individual for the purposes of this section;
“qualifying period” means a period of 24 months beginning on the date the qualifying individual commenced a new business;
“unemployment payment” means a payment of jobseeker’s benefit or jobseeker’s allowance payable under the Social Welfare Acts.
1 Substituted by Finance Act 2016 section 12, with effect from 1 January 2017.
(2) For the purposes of the definition of ‘qualifying individual’ in subsection (1)—
(a) any period where an individual is in attendance at, or participating in, a scheme or programme of employment or work experience, or a course of education, training or development, where such a scheme, programme or course is approved for the purposes of this paragraph by the Minister for Social Protection or the Minister for Education and Skills, with the consent of the Minister for Finance, shall be deemed to be part of a continuous period of unemployment for the purposes of this section,
(b) any payment in respect of a period of attendance at, or participation in, a scheme, programme or course mentioned in paragraph (a) 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, and
(c) any Sunday in any period of consecutive days shall not be treated as a day of unemployment and shall be disregarded in computing any such period.
(3) Subject to this section, where, on making a claim, an individual proves that he or she is a qualifying individual, he or she shall be entitled in any year of assessment falling wholly or partly within the qualifying period to deduct from or set off against the profits or gains of the new business, on which that individual is assessed under Case I or Case II of Schedule D, an amount equal to the amount referred to in subsection (4).
(4) The amount to which subsection (3) refers is an amount equal to the lesser of—
A x (B / C)
€40,000 x (B / 12)
A is the profit or gains of the new business which would, but for this section, be charged to tax in the year of assessment,
B is the number of months or fractions of months within the year of assessment which fall within the qualifying period, and
C is the number of months or fractions of months in the basis period for the year of assessment.
(5) Notwithstanding any other provision of the Tax Acts, effect shall be given to a deduction or set-off under subsection (4) in priority to any relief under section 382 and any allowance made in respect of the new business in accordance with Part 9.
(6) Where a qualifying individual commences 2 or more new businesses, the total deduction available under this section shall not exceed €40,000 for a year of assessment.
(7) Notwithstanding any other provision of the Tax Acts, an individual who makes a claim under this section shall be a chargeable person within the meaning of section 959A.