On Friday, Minister for Finance Paschal Donohoe announced changes to a number of economic supports available to businesses, in particular for those most impacted by the recent public health restrictions introduced last December. The Employment Wage Subsidy Scheme (EWSS) has been extended by one month, a number of clarifications have been provided in relation to the Covid Restrictions Support Scheme (CRSS) and the period by which tax debts can be warehoused has been extended by one month. Revenue will update its guidance on each of the schemes shortly and the legislation associated with these changes will be introduced in the coming weeks.
EWSS
The Government announced that businesses availing of EWSS that were directly impacted by the public health Regulations introduced last December, will receive additional support under the scheme for a further month. This is to assist these businesses as they fully re-open and emerge from the COVID-19 restrictions.
Affected businesses will continue to receive the enhanced rates of EWSS for the month of February and the graduated step-down in subsidy rates will now be delayed by one month. These businesses will continue to receive support under the scheme until 31 May 2022.
From 1 February 2022, most businesses, apart from those that were directly impacted by the public health restrictions of last December, will move to the reduced rate of EWSS which is €203 per employee, followed by the flat rate subsidy of €100 per employee for the final two months of the scheme (March and April 2022).
As announced in Budget 2022, the full rate of Employers’ PRSI will be reinstated with effect from 1 March 2022 for all businesses. This has already been legislated for in the Social Welfare Act 2021.
CRSS
The following clarifications were provided by the Minister:
- An extra week of support will be paid to businesses the week after the restrictions are lifted as an additional support to businesses all they reopen fully.
- For newer businesses established during the period 13 October 2020 to 26 July 2021, the turnover from the date of commencement up to 1 August 2021 will be used for the purpose of calculating average weekly turnover.
- Certain charities and sporting bodies that operate a hospitality/indoor entertainment business activity from their business premises, who meet the revised qualifying criteria of the scheme, are eligible to apply for the CRSS for the most recent period of restrictions (20 December 2021 to January 2022).
Tax Debt Warehousing Scheme
The period where tax liabilities arising can be warehoused has been extended by one month to 30 April 2022 for all taxpayers eligible for Covid-19 support schemes. This is to facilitate the two monthly VAT return for March/April.
Speaking on Friday, the Minister for Finance, Paschal Donohoe TD said:
“Today is an important day for our society and economy as we seek to ease the public health restrictions and re-open all sectors of our economy. The EWSS has been extremely successful in maintaining employment across the whole of our economy during this pandemic.
It is now time to adjust our focus towards an exit from the scheme in a structured and orderly way. This is important in everyone’s interests - businesses, employees, the wider body of taxpayers – as the scheme cannot continue indefinitely. As such, most businesses will move to the reduced rates of EWSS subsidy from the 1st February 2022 onwards and continue on the exit path as previously announced until the scheme closes on 30 April 2022.
However, I intend to provide additional support to those businesses that were directly impacted by the most recent public health regulations. Affected businesses will continue to receive the enhanced rates of support for a further month and the exit path from the scheme for such businesses will be delayed by a month”.
“CRSS has been an important and successful support payable at times when businesses most needed additional help with their fixed costs, and has provided some €717 million in direct payments in respect of over 25,000 business premises since its introduction and over €13.4 million in payments to businesses directly impacted by the latest public health restrictions in place since 20 December.”
“The facility to avail of the Tax Debt Warehousing Scheme has also offered valuable and practical liquidity support to businesses in difficult trading periods during the pandemic. The objective of this scheme is to allow firms some help to recover, thereby helping to guarantee their long-term economic viability and survival. This further extension will allow businesses who have been most impacted some additional time to recover before their tax liabilities have to be paid. Their period of zero interest will continue until 30 April 2023, with interest at the reduced rate of 3% p.a. payable thereafter until the debt is paid down.”
Read more about the announcement which includes links to further guidance.
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