Temporary COVID-19 Wage Subsidy Scheme

On 24 March 2020, the Government announced measures to provide financial support to workers affected by the COVID-19 crisis.

A key measure announced was the Temporary COVID-19 Wage Subsidy Scheme. This scheme is to be operated by Irish Revenue through the normal payroll of employers.

This note sets out the Revenue approach to confirming employer eligibility and examination of supporting proofs. The scheme is a significant investment by Government in supporting both employers and employees through a subsidy that will be paid in real-time, through payroll.

Key Principle

Revenue’s administration of the COVID-19 Temporary Wage Subsidy Scheme will operate initially on the basis of self-assessment and a declaration by the employer concerned.

Revenue expects businesses to be able to produce relevant supporting documentation when requested to do so, in any follow up verification by Revenue involving an examination of relevant business records where that is considered necessary.

Eligibility

The COVID-19 Temporary Wage Subsidy Scheme is available to employers across all sectors excluding the Public Service and Non-Commercial Semi-State Sector.

In order for an employer to qualify for the subsidy scheme they must self-declare to Revenue that they;

• are experiencing significant negative economic disruption due to Covid-19,
• are able to demonstrate, to the satisfaction of Revenue a minimum of 25% decline in turnover or customer orders, and
• an inability to pay normal wages and other normal outgoings fully.

Revenue accept this will be readily apparent, where some businesses and some sectors have had to close their premises, owing to the impact of public health advice on individual businesses in terms of restrictions on trade, physical distancing, the nature of essential and non-essential businesses.

The turnover period under review is Q2, 2020. Revenue accept the employer is best placed to determine the drop in turnover and may base this judgement on the decline in orders in March 2020, in comparison to February 2020, or the likely turnover for the quarter compared to Q1 or if appropriate Q2, 2019, or on any other basis that is reasonable.

In Revenue’s published guidance they have stated that an employer that has been hit by a significant decline in business but has strong cash reserves, that are not required to fund debt, will still qualify for the Scheme. In such case, the Government would expect the employer to continue to pay a significant proportion of the employees’ wages.

It should be noted that, in Revenue’s opinion, the declaration by the employer is not a declaration of insolvency. The declaration is simply a declaration which states that, based on reasonable projections, there will be, as a result of disruption to the business caused or to be caused by the Covid-19 pandemic, a decline of at least 25% in the future turnover of, or customer orders for, the business for the duration of the pandemic and that as a result the employer cannot pay normal wages and outgoings fully, but nonetheless wants to retain its employees on the payroll. We would note that this is just Revenue guidance and while useful it is not a legal opinion which may differ.

Revenue will not be looking for proof of qualification at this stage. Revenue may in future, based on risk criteria review eligibility. In this context employers should retain their evidence/basis for entering the Scheme.

COVID-19 Pandemic Unemployment Payment

Who is it available to?

• Employees who have lost their jobs, and
• Self-employed individuals who have had to cease trading, due to the crisis.

Such individuals will receive an enhanced emergency COVID-19 Pandemic Unemployment Payment of €350 per week (an increase from €203).

If an individual had applied before 24^th March, or is already in receipt of the COVID-19 Pandemic Unemployment Payment, he/she does not need to do anything. The next payment will be paid at the increased rate.

They should apply for the benefit to the Department of Social Protection.

The payment also applies to;

• non EU/EEA workers who have lost employment due to the COVID-19 (Coronavirus) pandemic
• students (and non-EU/EEA students) who have lost employment due to the COVID-19 (Coronavirus) pandemic
• part-time workers

To apply online now for COVID-19 Pandemic Unemployment Payment click here.

Revenue – Information and Advice for Taxpayers

Businesses experiencing cashflow difficulties

Revenue outlined some key advice and actions taken to assist businesses experiencing cashflow and trading difficulties arising from the impacts of COVID-19. These measures include, inter alia:

• Interest will not be applied to SMEs on late payments for January/February VAT and both February and March PAYE (Employers) liabilities.
• The suspension of all debt enforcement activity until further notice.
• Non SME’s who are having difficulties in paying their tax liabilities should contact Revenue.

Local Property Tax (LPT)

For property owners who opted to pay their LPT for 2020 by Annual Debit Instruction or Single Debit Authority payment, the deduction date has changed from 21^st March 2020 to 21^st May 2020.

Property owners who have opted to make a payment by Annual Debit Instruction or Single Debit Authority do not need to advise Revenue or take any action. The payment date has been automatically changed to 21^st May 2020.

Full details of these Revenue Measures can be found here.

We here at Hoare Chartered Accountants appreciate the widespread uncertainties across all sectors in these difficult times. Please feel free to contact us by phone on 091-756130, by mobile or by email if you have any further queries.