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Temporary Wage Subsidy Scheme (TWSS) tax liabilities – BIK Concession Update

Revenue have extended their Benefit in Kind (BIK) concession with respect to the payment of TWSS tax liabilities (income tax and USC) by employers on behalf of their employees, to the end of September 2021.  Revenue confirmed that this concession will also apply to payment of TWSS tax liabilities of employees who are self-assessed.  Proprietary directors will also be covered by the concession but only if the employer pays the TWSS tax liabilities of all employees in the company.

Debt Warehouse Scheme for level 5 restrictions

The Debt Warehouse Scheme, the ability to defer or ‘park’ certain tax liabilities, continues to be available to businesses experiencing tax payment difficulties due to the impacts of COVID-19. 

Businesses can continue to warehouse current VAT and PAYE (Employer) liabilities and Temporary Wage Subsidy Scheme (TWSS) overpayments arising from the COVID-19 crisis and the current level 5 public health restrictions. 

Temporary Wage Subsidy Scheme (TWSS) tax liabilities

Subsidy payments by Revenue to employers under the Temporary Wage Subsidy Scheme (TWSS) and paid to employees are treated as part of the employees’ emoluments i.e. salary and wages, for tax purposes. The subsidy amount paid to employees via payroll was not subject to tax under the PAYE system however, the amount received by the employee is liable to income tax and Universal Social Charge (USC).  

The amount of income tax and USC due on the TWSS amount will be verified by Revenue on the employees’ Preliminary End of Year Statement for 2020.  This statement is expected to be available to every employee from 15 January 2021 via the Revenue’s MyAccount service. The statement will not be provided to employers. The Preliminary End of Year Statement is a preliminary calculation of the employee’s tax and USC for the year and is based on the information held on Revenue’s records. To receive a Statement of Liability an employee must complete an income tax return. 

In some cases, the income tax and USC arising on the TWSS payment may be covered by the employee’s unutilised tax credits and rate bands or by additional tax credits claimed for 2020. In other cases, the liabilities will be due to be paid to Revenue.

Employment Wage Subsidy Scheme

The Employment Wage Subsidy Scheme is the new flat rate subsidy support for employers and is available since 1 July. This new scheme will replace the Temporary Wage Subsidy Scheme from 1 September, until then both schemes are in operation.  Employers who satisfy the qualifying criteria and who have eligible employees must apply for the scheme.  

The Temporary Wage Subsidy scheme for NFP organisations

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.

Temporary Wage Subsidy Scheme: Employer Compliance Check

Revenue have now commenced a review on compliance with the Temporary Wage Subsidy Scheme (‘TWSS’). This means that Revenue are contacting employers who have received TWSS payments.

What this means for you?

Back to better

Creating a return to work strategy and supporting organisations to adapt to the new normal.

As we assess the impact of the pandemic, leaders are looking to the future and making plans to get their people back to full capacity and prepare for a 'new normal'. This next phase is critical - do it well and you can positively influence the long-term performance of your organisation.

COVID-19 Employer Supports

What support is available for employers affected by COVID-19?

COVID–19: EMEA VAT specific measures

Due to the impact of COVID-19, many countries across the globe are offering various reliefs for paying and reporting VAT. Please find outlined below an update of measures in the EMEA region. As announcements are being made daily, this high level overview document will be updated regularly but we cannot guarantee completeness.

Introduction of Temporary VAT measures

In the context of the current COVID-19 emergency, Revenue have published guidance (eBrief 77/20) on the zero rating of certain medical equipment and products and the impact for traders who supply or donate these goods. In addition, the VAT impact of supplying emergency accommodation is clarified.

COVID-19: Impairment triggers and valuation considerations

Due to challenges forecasting financial performance and changes to market related valuation inputs the current environment makes it difficult for companies to assess the potential impairment impact on their investments and assets.

The subjective nature of valuations becomes more complex when markets are volatile, and valuation benchmarks quickly go out of date.

Companies must be careful to produce an output that is meaningful and robust with defensible assumptions.

Navigating your business through COVID-19 - VAT and customs update

Given the unique situation facing the Irish economy as a result of the worldwide COVID-19 pandemic, a number of clarifications have been made and relieving measures introduced in relation to VAT, customs and international trade:

• Temporary zero rating of supplies of personal protective equipment, ventilators and other medical products;
• Zero rated goods;
• VAT deductibility entitlement;
• Record-keeping and compliance;
• Suspension of import VAT and customs duties on certain medical products;
• VAT rate on emergency accommodation;
• Customs and International Trade;
• Customs Value Authorisations;
• Restrictions on the exportation of medical equipment; and
• Changes to Inward Processing/Customs Warehousing Procedure where products are re-exported.

COVID-19: adjusting to the ‘new normal’

As COVID-19 continues to impact the world of work, this article assesses how Operational Excellence and in particular Robotic Process automation (RPA) solutions might assist organisations now and into the future. This pandemic is attacking organisations’ people and placing their processes and technology under increased pressure. The questions businesses are asking themselves are how they can protect and maintain their workforce in conjunction with delivering service to their clients.

COVID-19: Financial Reporting and Disclosures

The novel coronavirus (COVID-19) pandemic is spreading around the globe rapidly. The virus has taken its toll on not just human life, but businesses and financial markets too, the extent of which is currently indeterminate. Entities need to carefully consider the accounting implications of this situation.

This article identifies key financial reporting areas that entities need to consider when determining the impact on their business, and on the results, financial position and disclosures in their financial statements.

How to reduce and defer your VAT liability

In light of the Government’s recent financial measures implemented for businesses, we have summarised below some practical steps businesses may take to improve VAT cash flow.

1. Deferral of VAT liability and acceleration of VAT refunds
2. Electronic VAT Refund (EVR) reclaims
3. Bad debt relief
4. Annual VAT recovery adjustment
5. Basis of accounting for VAT
6. Change your VAT reporting period
7. Section 56 authorisation
8. Charity compensation scheme

COVID-19 – Benefit-in-kind – Employer provided vehicles

This note sets out the Revenue approach to the tax treatment of benefit-in-kind arising on employer-provided vehicles during the period of the COVID-19 restrictions.

Summary of packages and supports available through Enterprise Ireland

The disruption that COVID-19 is causing to all businesses is immense, and we therefore welcome the packages and supports offered by Enterprise Ireland to assist larger companies in transitioning through the immediate and critical challenges that COVID-19 inevitably presents.

Wage Subsidy Scheme – FAQs for Employers

How is the scheme operated through payroll?

How do employers register for the scheme?

What if i am already registered employer covid-19 refund scheme?

How does the subsidy scheme differ from the employer refund scheme?

How is the eligibility for the scheme determined?

Am i expected to provide proof of eligibility on application for the scheme?

What if my turnover has decreased by 25% or more but the company has strong cash reserves?

Can i still qualify if my employees have already been temporarily laid off?

When does the scheme apply from and how long will the scheme last for?

What is the position if the company operates two trades, for example retail and contracting, and only one trade is impacted by covid-19 (i.e. the retail trade) and the overall company turnover does not fall by 25%?

Is it possible that a company, who could be deemed an essential business, could avail of a more relaxed revenue approach in relation to the wage subsidy scheme? The issue the company will face is not a reduction in turnover, but a slowdown in collecting debtors from their customers.

COVID-19: Irish global mobility and employment tax changes

The Irish Revenue Commissioners have issued very welcome guidance on a range of global mobility and employment tax issues which provide clarity to employers on these areas during this challenging time. The guidance provides for a number of concessions for the purposes of claiming payroll tax reliefs and exemptions and also provides for a number of extensions to reporting deadlines. Records should be maintained by employers outlining the circumstances of COVID-19 restrictions and have them  available to Revenue on request.

COVID-19 wage subsidy

How will the income support work?

Eligible employers?

Scheme duration

How will the scheme operate?

How do employers register for the scheme?

COVID-19 Key considerations for your business

This morning we hosted a webinar which looked at COVID-19 and the key considerations for your business. The topics discussed include:

• Working capital management and optimisation;
• Covid 19 employment law and other related legal considerations;
• Employee engagement and maintaining a high performance culture;
• Global macroeconomic implications and remaining potential investment opportunities; and
• Covid 19 Key tax considerations.

Revenue update guidelines around e-working

The Revenue have updated their guidelines on e-working and the treatment of associated expenses.  The updates are limited and broadly in line with previous guidance on e-working but do provide some clarity around what is considered e-working for “substantial periods” and the availability of the reliefs in the current environment. This relates to the concept of e-workers/home workers. 

E-working is the method of working using information and communication technologies where an employee’s work is carried out independent of location.

The Grant Thornton Resilience Wheel Framework

The economic consequences of the coronavirus (COVID-19) on future trading assumptions, and the direct impact on many companies in the leisure, travel and consumer sectors already, will place some companies under liquidity pressures and potential covenant breaches from their debt facilities.

The Grant Thornton Resilience Wheel is a framework designed to help you have ‘initial’ high level ‘supportive’ conversations within your boardroom as a result of stressed/distressed operating conditions.

COVID 19: Enhanced Illness Benefit Payment

When a worker is told to self-isolate by a doctor or has been diagnosed with COVID-19 (Coronavirus) by a doctor, they can apply for an enhanced Illness Benefit payment of €305 per week.

To be eligible for this payment a person must be confined to their home or a medical facility.

COVID-19: Data Protection

While the coronavirus outbreak is spreading throughout Europe, many public and private organisations are taking measures to contain the virus by allowing the staff to work from home (where possible), or by asking staff to communicate to their Human Resource contact if they have any Covid-19 symptoms, if they have been tested positive/negative for Covid-19, or staff are asked to fill in a form to declare if they travelled to/from specific areas, if they have been in contact with people affected by the virus, and what is their health status at the moment.

In performing these actions, companies are collecting special categories of personal data (e.g. health data) from their employees, which under the GDPR need special protections; hence, data controllers must ensure the protection of the personal data of the data subjects.

The Data Protection Commission (DPC) issued a guidance to help companies understand how to balance between protecting employee’s privacy and allow for the provision of healthcare and the management of public health.

COVID-19: The Importance of Strategic Workforce Planning

Covid-19 is taking the world by storm, bringing more panic and hysteria with each case that gets announced. Although some may argue that the situation is being over-dramatised, it is something that has and will affect everyone over the coming weeks and months. Businesses have the worry of whether staff will remain healthy, whether they will be able to continue to work, and overall, whether the business can continue to operate. Since the first case hit Ireland just three weeks ago, business have had to consider contingency plans for the very likely scenario of their staff not being able to travel to work.

Cross border businesses

If your business is operating cross border please refer to our Northern Ireland COVID-19 response page.