The Not for Profit sector has been badly hit by the COVID-19 pandemic and unfortunately this has changed the everyday running of the business and in some cases requiring assistance from Government supports. The temporary wage subsidy scheme was introduced to support businesses to retain the link between employers and employees during the COVID-19 Pandemic. The scheme was introduced on 26th March 2020 for an initial 12 week period. However, the Minister for Finance has now extended the scheme until the end of August 2020.
The Subsidy Scheme is open to employers across all sectors, (excluding the Public Service and Non-Commercial Semi-State Sector), whose business activities are being adversely impacted by the COVID-19 pandemic.
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 or customer orders in Q2 2020;
- be unable to pay normal wages and normal outgoings fully; and (employers should be mindful of this as they move to Q3),
- retain their employees on the payroll.
To register for the Scheme:
- An Employer can register via Revenue’s online system (“ROS”);
- Registration is on a self-assessment basis by making a self-declaration to Revenue confirming the business meets the qualifying conditions.
- This declaration by the employer is not a declaration of insolvency.
Other points to note:
- Eligible employers can participate in the scheme in respect of any eligible employees.
- Eligible employees are those on their payroll on 29th February 2020, and included in the payroll submission made to Revenue in March 2020. This includes staff on reduced hours, rehired staff who were temporarily laid off or staff temporarily laid off but retained on the payroll.
New “warehousing” of deferred tax debts and interest suspension arrangements
In March, Revenue announced the suspension of debt collection and the charging of interest on late payment for the January/February and March/April VAT periods and February, March and April PAYE (Employer) liabilities for SME businesses. These arrangements are further extended to include May/June VAT and May and June PAYE (Employer) liabilities.
For the purposes of clarity, PAYE (Employer) liabilities include income tax, universal social charge and employees’ and employer’s PRSI due to be remitted by employers to Revenue under the PAYE system in respect of the payment of wages, salary, etc., to their employees.
Notwithstanding the suspension of debt collection, affected businesses are required to file timely returns so that Revenue has visibility on the level of unpaid debt arising from the Covid-19 crisis. Where a business is unable to file complete returns due to, for example, the absence of key employees or an agent due to Covid-19 related illness or restrictions, the business should submit returns based on the best estimate of the liability.
In early May, the Government announced that it will legislate to provide that Revenue will warehouse such deferred tax debts. The proposed scheme will involve the effective parking of this debt, for a period of 12 months after a business resumes trading and the application of a lower interest rate of 3% per annum on the repayment of such ‘warehoused tax debts’ after that date.
The necessary legislative amendments will be brought forward in due course. Pending the enactment of the necessary legislation, Revenue will operate the arrangements on an administrative basis.
VAT Compensation Scheme for Charities
We would like to inform you that due to COVID-19 the deadline to submit the VAT claim for 2019 has been extended this year from 30 June 2020 to 31 August 2020.
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