As most people are now aware the Temporary Wage Subsidy Scheme (TWSS) has been extended by the Government.
Revenue have issued some updated guidance to give some clarity on this and how the extension will work. Some of the key points to note:
- The TWSS has been extended to 31 August 2020
- The eligibility criteria has remained the same. A business should have suffered a 25% reduction in turnover for Quarter 2 2020. The performance in Quarter 3 (July and August) has no impact on eligibility. This is very relevant to those businesses that are maybe now re-opening or those who are seeing their turnover start to increase
- A business should now be reasonably clear on whether they meet the eligibility criteria on the basis of the expected turnover reduction for Q2. It is important that an updated review is now done and documented. It may not have been as easy to forecast the impact on turnover when the initial eligibility assessment was done in March/April. If it now transpires your business does not meet the criteria you should cease claiming going forward and notify revenue via My Enquiries. Revenue will require evidence of the assumptions supporting the original self-assessment of eligibility and, once the basis is reasonable, will not seek to claw-back the subsidy paid for the original period. If there was not a reasonable basis, the subsidy is repayable. Ensure you retain this documentation.
- If ceasing to claim the TWSS you should ensure that employees are processed at using their pre covid 19 PRSI class and are no longer processed through J Class PRSI
- For any employee on the TWSS or an employee who has claimed the Pandemic Unemployment Payment (PUP), revenue have bulk updated employees tax status to a week 1 basis from this week. Both of these payments are taxable sources of income although they have not been taxed at source or through the real-time PAYE system. The reason for the change to the Week 1 basis is to reduce the impact for employees of any possible future taxes owing. Employees can check this status on their revenue My Account. For many employees this may mean that there net take home pay reduces this week when compared to what they were taking home earlier in the operation of the TWSS especially if they were getting PAYE refunds.
- A compliance check process is due to commence. Revenue will be corresponding with all businesses claiming the TWSS asking them to confirm the following:
- they are eligible,
- paying the subsidy correctly to employees; and
- recording it correctly on payslips.
- As part of this compliance check process employers will have an opportunity to address any other tax issues.
- employees can now view details of the TWSS received on their revenue My Account.
- We await further clarity on exactly how the Revenue Debt Warehousing process will work but it is important that all revenue returns remain filed on time.
I have no doubt there will be further twists in the TWSS journey and we will do our best to keep you informed! You can follow all our Covid 19 related updates on our Supporting You web page here
If in doubt ensure you seek advice and feel free to contact Dee at firstname.lastname@example.org if you would like to arrange a call with one of the team.