PAYE tax bill surprise, World Bank sees ‘subdued’ recovery, and why cash is no longer king

Business Today: the best news, analysis and comment from The Irish Times business desk

Have you ditched cash for card for good this year? The Covid-19 pandemic has hastened the demise of notes and coins, Fiona Reddan writes in her weekly Money Matters column. Photograph: iStock

Have you ditched cash for card for good this year? The Covid-19 pandemic has hastened the demise of notes and coins, Fiona Reddan writes in her weekly Money Matters column. Photograph: iStock

 

Thousands of workers who benefited from availed of State wage subsidies including the Temporary Wage Subsidy Scheme and the Pandemic Unemployment Payment during 2020 could be hit with tax bills from Revenue next week, Fiona Reddan reports. If you benefitted from the payments, what can you expect? Fiona also has an explaineroutlining why this issue has come about, estimating the average liability - more than €1,000 for some employees - and your options for repaying the shortfall.

The move from Revenue to collect unpaid taxes comes as the Government disclosed that weaker tax receipts for 2020, as well as Covid-related spending, are set to push public finances deep into the red. Exchequer returns for 2020, published by the Department of Finance on Tuesday, reveal that the budget deficit for 2020 is expected to be €19 billion. This contrasts with a surplus of €1.4 billion in 2019, Eoin Burke-Kennedy reports.

While large, the €19 billion overall general Government deficit for last year is significantly smaller than feared, reflecting stronger-than-expected income tax and corporation tax receipts. It could have been so much worse, Eoin writes in his accompanying analysis; Ireland is likely to have the smallest Government budget deficit of any euro-area country in 2020.

In other positive news, the National Treasury Management Agencysold a greater-than-expected €5.5 billion of 10-year bonds yesterday, covering one-third of the minimum amount of borrowings the State plans to raise in 2021 to deal with the coronavirus crisis. Joe Brennan reports.

Overall business sentiment in the services sector in December was the strongest since February, as companies grew more confident about the 12-month outlook on the back of vaccine developments, a new report published this morning shows. AIB’s PMI survey data showed the fastest rate of expansion was in financial services, but transport, tourism and leisure registered another sharp decline in activity. Colin Gleeson has the details.

Meanwhile, the World Bank has warned that economic recovery from Covid-19 is likely to be more “subdued” if governments do not act more decisively to stamp out the upsurge in cases. In its latest Global Economic Prospects report, the bank said it expected the global economy to grow by 4 per cent this year assuming an initial Covid-19 vaccine rollout becomes widespread.

Digicel has rejected claims from the outgoing US ambassador to Jamaica that Chinese spies have used its network to eavesdrop on his calls, as well as listening in to calls involving Jamaican citizens. The pan-Caribbean telecoms group, owned by Irish entrepreneur Denis O’Brien, said claims made by Donald Tapia in an interview with local media were “without foundation”. Charlie Taylor reports.

Norwegian Air Shuttle has been moving aircraft to Shannon Airport as the troubled carrier begins cutting its fleet ahead of restructuring. The airline has been shifting planes from Scandinavian bases to Shannon in recent weeks in preparation for returning them to the lessors that supply most of its 140-strong fleet. Barry O’Halloran has the story.

Charlie Taylor also reports that Galway-based Mirai Medical has raised €3 million in funding for its outpatient cancer treatment technology, which targets tumours while preserving healthy tissue and minimising side effects, while Irish payments regulation company Sysnet has completed its third acquisition in five weeks and raised an additional $65 million (€53 million) in debt financing.

Have you ditched cash for card for good this year? In this week’s Money Matters column, Fiona Reddan writes about how the Covid-19 pandemic has hastened the demise of notes and coins, but argues that we must be careful not to leave those who don’t use bank accounts, cards or online payments behind.

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