Revenue guidance on COVID-19 Wage Subsidy Scheme

Mar 27, 2020

Last evening (Thursday 26 March) legislation was passed in the Dáil to provide for the operation of a Wage Subsidy Scheme for employers.  The legislation provides that key aspects of eligibility for the scheme are largely to be determined by Revenue guidance, and this guidance was published late last evening.  In the interests of delivering a rapid economic recovery after the current crisis we are recommending that our members examine closely and if appropriate avail of the scheme for their own and/or their clients’ businesses.

The eligibility for the self-assessment scheme depends on ‘significant negative economic disruption on the employer due to Covid-19’. A qualifying employer must declare that it is significantly impacted by the crisis. According to Revenue this means that the employer’s turnover is likely to decrease by 25 per cent for quarter 2, 2020; that the business is unable to meet normal wages or normal outputs. That a business has significant cash reserves will not necessarily disqualify it from the scheme.

According to Revenue, eligibility will initially be determined, largely on the basis of self-assessment and declaration by the employer concerned, combined with a risk focused follow up verification by Revenue. The Scheme is available to employers across all sectors excluding the Public Service and Non-Commercial Semi-State Sector.

Key indicators of ‘significant negative economic disruption’ are that the employer’s expected turnover is likely to decrease by 25 per cent for quarter 2, 2020. Revenue outline that the employer is best placed to determine this 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.

The scheme is confined to employees who were on the employer’s payroll at 29 February 2020, and for whom a payroll submission has already been made to Revenue in the period from 1 February 2020 to 15 March 2020. Employees who were laid off after 29 February 2020 may be taken back onto the payroll for the purposes of this scheme.

Read Revenue’s guidance here and Revenue’s FAQ document may be useful. Revenue’s other information and advice for taxpayers and agents is available here.

We will continue to advise all members using the appropriate communication channels as soon as further clarifications and updates are received.