Changes to PSWT system

Pharmacists, medical consultants and solicitors will be aware of the current Professional Services Withholding Tax (“PSWT”) system in place. The insurance company, HSE or other government body deduct 20% withholding tax from payments for professional services. A paper F45 certificate is issued showing the amount of the tax withheld. If the taxpayer wanted to claim a refund of this tax they were required to send in these F45 certificates. If any F45 certificates were misplaced or lost a replacement certificate (known as a F43) was required. The issuing of refunds could be delayed as Revenue were required to manually verify these certificates and approve the refund.

New system

Finance Act 2020 provided for the move to an electronic system for PSWT. Revenue have announced their intention to move to this new system on the 1st July 2021. This new system will eliminate the procedure of issuing paper F45 certificates. Instead the payer (e.g. HSE) will submit a payment notification to Revenue and the tax withheld will be automatically transferred to the taxpayer’s Revenue account. If the taxpayer wants to claim an interim refund under the new system they notify Revenue of the period they want refunded. No paper application is required to be submitted to Revenue. This should significantly reduce the time to receive refunds for any interim claims made to Revenue.

What do I need to do?

The good news for taxpayers is that this new system does not require any additional Revenue returns or registrations. This new system will apply automatically from the 1st July 2021. Up until this date you will continue to receive F45 certificates. It is important that you continue to retain these paper certificates as they will be required to be submitted to Revenue if you want to claim an interim refund for a period up to the 30th June 2021. Revenue may also request these F45 certificates as part of their verification checks when your income tax or corporation tax return is submitted.