Apply for tax clearance now if you intend to claim the EWSS says Revenue

Aug 17, 2020

Revenue issued comprehensive guidelines outlining the eligibility criteria and supporting proofs that employers need in order to participate in the Employment Wage Subsidy Scheme (EWSS). Employers are encouraged to apply for tax clearance now to allow time for the identification and submission of any outstanding tax returns or payment of tax debts. Eligible employers can register for the EWSS from 18 August, through ROS.

Employers must possess a valid tax clearance certificate and maintain tax clearance for the duration of the EWSS scheme. Revenue’s records indicate that approximately 16,000 employers currently registered for the TWSS do not hold a tax clearance certificate and a number of those may have never needed to apply for tax clearance before, due to the nature of their business. 

Tax clearance will be granted if the tax affairs of the applicant and their connected parties are up to date. Tax clearance status can be checked in ROS – after logging in, current tax status is displayed above the grey banner for “My Frequently Used Services”. An application for a tax clearance certificate can be made through the eTax clearance service in ROS. Confirmation will be provided on screen in ‘real-time’ for successful applicants. Similarly, employers who are unsuccessful will be provided with details of why their application was unsuccessful.  Employers who are unable to pay their tax debts are encouraged to consider the debt warehousing scheme and a phased payment arrangement for non-COVID-19 debts.

Collector General, Joe Howley said:

“Businesses should take the important and practical steps now of filing any outstanding tax returns and paying or making arrangements to pay any non-Covid-19 related tax debt. This will mean they will qualify for tax clearance and, provided all other conditions are met, will have access to the key financial support available to them under the Employment Wage Subsidy Scheme.”

The Revenue booklet, Guidelines on the operation of the Employment Wage Subsidy Scheme, includes further details on tax clearance requirements and the 30 per cent decline in turnover/customer order eligibility criteria.  The guidelines also note that the subsidy is taxable as trading income in the hands of the employer but is not considered for the 30 per cent decline in turnover test.  

Set out in the eligible employees section of the guidelines, is confirmation that the EWSS can be claimed for certain proprietary directors (additional guidance will be provided in due course) and that there are no restrictions on taking on new employees or the movement of employees under TUPE legislation. Employees employed otherwise than as part of a business, such as childminders, housekeepers, gardeners etc., are not eligible employees for the EWSS.

Registration for the scheme will commence through ROS on 18 August. This process is separate to obtaining tax clearance. Employers will be required to agree a declaration, as set out on page 9 of the guidelines, as part of the registration process. Registration applications will only be processed if the employer is registered for PAYE/PRSI as an employer, has a bank account linked to that registration, and has tax clearance.

Revenue will undertake assurance checks in relation to the scheme. Accordingly, all records relating to the scheme must be retained. Further details on this compliance check programme will issue later. Revenue also note that it will undertake a risk-based approach to reviews of employer eligibility.