1. Temporary COVID-19 Wage Subsidy Scheme
On 24th March the Government announced new measures to provide financial support to Irish workers affected by the Covid-19 crisis. As part of these measures, Revenue will operate a Temporary Wage Subsidy Scheme. The scheme, enables employees, whose employers are affected by the pandemic, to receive significant support directly from their employer. The scheme will run for 12 weeks from 26 March 2020. Draft legislation governing the scheme will be published shortly.
The operation of the Temporary Wage Subsidy Scheme will be available to employers who keep employees on the payroll throughout the COVID-19 pandemic, meaning employers can retain links with employees for when business picks up after the crisis. Additionally, the operation of the scheme will reduce the burden on the Department of Employment Affairs and Social Protection (DEASP) which is dealing with the other Covid-19 related payments.
Employers are encouraged to facilitate employees by operating the scheme, by retaining employees on their books and by making best efforts to maintain a significant, or 100% income, for the period of the scheme.
Key Features of the scheme
- Replaces the previous COVID-19 Refund Scheme. So any applications made from 26th March would be made through this new scheme. (For self employed clients you would continue to claim via the COVID-19 Refund Scheme, DEASP application. See 2 below)
- Initially, and from this Thursday (26 March 2020), the subsidy scheme will refund employers up to a maximum of €410 per each qualifying employee.
- However, employers should pay no more than the normal take home pay of the employee.
- The subsidy scheme applies to employers who top up employees’ wages and those that aren’t in a position to do so.
- Employers make this special support payment to their employees through their normal payroll process.
- Employers will then be reimbursed for amounts paid to employees and notified to Revenue via the payroll process.
- The reimbursement will, in general, be made within two working days after receipt of the payroll submission.
- In April, the scheme will move to a subsidy payment based on 70% of the weekly average take home pay for each employee up to a maximum of €410*.
- Income tax and USC will not be applied to the subsidy payment through the payroll.
- Employee PRSI will not apply to the subsidy or any top up payment by the employer.
- Employers PRSI will not apply to the subsidy will be reduced from 10.5% to 0.5% on the top up payment.
* (details on this will be made available by Revenue in due course).
Example of how the scheme works
- The employee earns €500 net a week
- Employer qualifies for the scheme (see below)
- Up to 31 March 2020, employer can pay this amount as normal through payroll. Income tax/USC/PRSI will not be applied to the subsidy payment through the payroll.
- A reimbursement of €410 should issue back within two working days of receipt of the payroll submission
- From April, the reimbursement will be capped at 70%/€410 whichever is the lower. For the above example, a reimbursement of €350 should issue back within two working days of receipt of the payroll submission.
Who does the scheme apply to?
The Scheme is available to employers from all sectors (excluding the public service and non-commercial semi-state sector) whose business activities are being adversely impacted by the COVID-19 pandemic.
The scheme is available for employers who retain staff on payroll; some of the staff may be temporarily not working or some may be on reduced hours and/or reduced pay. Provided the employer meets the conditions set out below and subject to the levels of pay to the employees the employer may be eligible for the scheme for some or all of the employees.
To qualify for the scheme, employers must
- be experiencing significant negative economic disruption due to Covid-19
- be able to demonstrate, to the satisfaction of Revenue, a minimum of a 25% decline in turnover
- be unable to pay normal wages and normal outgoings fully
- retain their employees on the payroll.
The Scheme is confined to employees who were on the employer’s payroll as at 29 February 2020, and for whom a payroll submission has already been made to Revenue in the period from 1 February 2020 to 15 March 2020.
The names of all employers operating this scheme will be published on Revenue’s website in due course, after the scheme has expired.
Further details on registering and operation of the scheme are contained below though in practice we can handle these parts for you.
2. COVID-19 Refund Scheme - Self Employed
Applications for this payment are relevant to the self-employed only from 26th March.
The payment has now been increased to € 350 per week wef 24th March
You can apply for the new COVID-19 Pandemic Unemployment Payment if you:
- are an employee or self-employed
- are aged between 18 and 66 years old
- live in the Republic of Ireland
- have lost your job due to the COVID-19 (Coronavirus) pandemic
- have ceased trading due to the pandemic if you are self-employed
Please see link here for the application. If you require assistance with this please let us know.
3. Revenue Commissioners Services & Practice
Repayments & Refunds
Revenue have confirmed that they continue to prioritise the approval and processing of repayments and refunds, primarily VAT repayments and PSWT refunds, to taxpayers. Where checks are necessary to allow repayment/refund claims, they will conduct these through My Enquiries service or by telephone.
In general, we have suspended audit and other compliance intervention activity on taxpayers’ premises until further notice. Where possible, we will continue to engage with businesses to finalise open interventions through MyEnquiries or by telephone.
Filing Tax Returns
Taxpayers (individuals and businesses) should continue to file their tax returns even if payment of the resulting liabilities, in whole or in part, is not possible. Where, due to the virus, key personnel that compute tax returns are unavailable, we strongly advise that the relevant return is submitted on a ‘best estimate’ basis.
The application of a surcharge for Corporation Tax returns (CT1’s) for accounting periods ending June 2019 onwards (i.e. due by March 23 onwards) is suspended until further notice.
Variable Direct Debit – Notice for Employers’ Income Tax/PRSI/USC/LPT payments
Where a variable direct debit fails due to insufficient funds, Revenue has suspended the process of issuing a further request for the payments until further notice. Should an employer wish to make a payment after the third last working day, they can avail of other online payment facilities. This temporary suspension will come into effect for March 2020 Variable Direct Debit payments.
Employers should continue to report their payroll details each month to ensure that the filed/deemed return is accurate.
The following measures are in place to assist taxpayers who are experiencing tax payment difficulties:
- All debt enforcement activity is suspended until further notice.
- The application of interest on late payments is suspended for all SME* businesses in respect of January/February VAT and both February and March PAYE (Employers) liabilities.
- Businesses, other than SMEs, who are experiencing difficulties in paying their tax liabilities should contact the Collector-General’s office on (01) 7383663. Alternatively, these businesses can engage directly with their branch contacts in Revenue’s Large Corporates Division or Medium Enterprises Division.
Revenue are open to agreeing payment arrangements that are acceptable to both the business and Revenue.
Local Property Tax
For property owners who opted to pay their LPT for 2020 by Annual Debit Instruction or Single Debit Authority payment, the deduction date will change from 21 March 2020 to 21 May 2020.
Critical pharmaceutical products and medicines will be given a Customs ‘green routing’ to facilitate uninterrupted importation and supply.
4. Compliance with certain reporting and filing obligations and the satisfaction of certain other tax related conditions
Benefit in Kind (BIK)
Tax treatment of reimbursements by an employer to an employee regarding holiday/flight cancellations or in relation to costs of assisting employees returning to the State
Provided the employee is integral to the business and was required to return to deal with issues related to the COVID-19 crisis by his or her employer, the costs incurred are reasonable and the employee is not otherwise compensated (i.e. via an insurance policy or direct claim to the service provider), a BIK will not arise. This may include costs related to family members who were on holiday or due to go on holidays with the employee.
Employer provided equipment
A BIK will not arise where employers provide equipment such as laptops, printers, scanners and office furniture in order for employees to set up a working space in their homes.
e-Working and Tax
Payment of taxi fares
Where an employer pays for a taxi to transport an employee to or from work due to health and safety concerns, BIK will not apply for the duration of the COVID-19 period only.
5. Corporation Tax and presence in the State or outside the State resulting from COVID-related travel restrictions
Where an individual is present in the State and that presence is shown to result from travel restrictions related to COVID–19, Revenue will be prepared to disregard such presence in the State for corporation tax purposes for a company in relation to which the individual is an employee, director, service provider or agent.
In addition, and where relevant, if an individual is present in another jurisdiction as a result of COVID-related travel restrictions, and would otherwise have been present in the State, Revenue will be prepared to disregard such presence outside the State for corporation tax purposes for a company in relation to which the individual is an employee, director, service provider or agent.
The individual and the company should maintain a record of the facts and circumstances of the bona fide relevant presence in the State, or outside the State, for production to Revenue if evidence that such presence resulted from COVID-related travel restrictions is requested.
6. The SBCI Covid-19 Working Capital Scheme
The SBCI Covid-19 scheme is Now Open, with the scheme designed to aid with Working Capital and has a maximum term of three years. The loans will be available through AIB, Bank of Ireland and Ulster Bank. Approval of loans are subject to the banks own credit policies and procedures i.e. the business must be deemed able to take on the debt.
- Loan amounts of between €25,000 to €1.5m per eligible enterprise
- Maximum interest rate of 4%.
- Loan terms ranging from 1 year to 3 years.
- Loans unsecured up to €500,000.
- Optional interest-only repayments may be available at the start of the loans.
- The loan amount and term is dependent on the loan purpose.
7. The Registrar of Companies
If you are due to complete your annual return filing at any time up to 30th June your annual return will be deemed to have been filed on time if you capture the B1 form, upload your financial statements, pay the fee and submit it online and then deliver the signature page as normal to the CRO by that date. You may also complete the filing as normal using Revenue Online Services (ROS) signatures instead of a signature page.
Please continue to file as normal during this period if you are in a position to do so. Annual returns may not be processed within the usual timeframes, however, anything received will be queued and processed as soon as possible.