Chartered Accountants Ireland recently requested an update from Revenue on information an accountant can reliably use for the purposes of preparing 2020 income tax returns for clients who received Temporary Wage Subsidy (TWSS) payments and/or Pandemic Unemployment Payments (PUP). Revenue advises accountants and tax agents to review the Tax and Duty Manual, Part 38-01-04E which covers TWSS/PUP pre-populated information on the 2020 Form 11. This TDM sets out how to access the most up to date information on an individual’s TWSS payments taking account of payments an employer may have made and any amendments to the individual’s TWSS record on foot of the reconciliation process undertaken by an individual’s employer.
The income tax return (Form 11) is populated with the TWSS subsidy paid as reported by the employer as set out in TDM Part 38-01-04E, para 5.1(1) page 11. If a filer/agent opens a Form 11 on a prefilled basis, say in early June, then ‘prefilled’ data on that download is as it was when downloaded. If the filer/agent considers that more up-to-date data is available, for example, say the MyAccount record shows different information which was updated by an employer after the download was done, in this example, early June, then the filer will need to delete the ‘work in progress’ Form 11 and restart it to get the ‘updated prefilled data’. Work or inputs on any other panels in that WIP Form 11 should be saved as a copy/screenshot and must be re-inputted into the updated Form 11. Once a WIP Form 11 is deleted, it’s deleted.
The Preliminary End of Year Statement (PEOYS) and income tax return (Form 12) are also pre-populated with the TWSS amount as reported by the employer. If a return has not been submitted and an employer has updated the subsidy paid as a result of the reconciliation process, then the PEOYS will be automatically updated with this information. If a return has already been filed and a Statement of Liability (SoL) has been generated and the employer subsequently updates the subsidy paid amount then an amended SoL will automatically issue to the employee.
Employers had 2 methods available to them to pay the employee’s TWSS liability.
- Provide funds directly to the employee to allow the employee pay via ROS / myAccount. If this method is used then there is nothing in the Form 11/Form 12 to indicate this and the employee should use the funds provided by the employer to pay the liability once they file their return.
- Amend the final payroll submission for 2020 for the employee increasing the amount of income tax paid and USC paid by the amount of tax liability the employer is paying on behalf of the employee. In this instance the increased income tax and USC paid will be reflected in the employee’s tax from that employment as prefilled on the Form 11.
If a filer/agent has already filed a Form 11 and the employer and employee agree the TWSS liability payment later on, the filer will need to ‘amend’ the Form 11. There is a specific note on this in paragraph 11.2 of the TDM Part 38-01-04E.
The TWSS guidance is very clear, and this is repeated in the Form 11 TDM Part 38-01-04E in Appendix 3 on page 31:
Employers must engage directly with employees and agree the value and method to pay the liability involved
If a client is telling an agent that the employer has paid the TWSS liability, then the client/employee/proprietary director must have some confirmation to back that up, which shows the agreement between employer and employee.
PUP
As per TDM Part 38-01-04E, para 6.2 pages 16/17, Revenue shows DSP data, including PUP, on the PAYE / BIK/ Pensions (2) panel. As per page 17 the message says:
Note: where a filer opens a prefilled return, the details of social welfare payments received will be included in the summary table presented
DSP information is not prefilled to the specific field in the panel, but it is in a TABLE at the top of the panel and the filer ‘re-inputs’ it to the correct field. Similar to the treatment for TWSS payments, if PUP data is repaid and reflected on a later DSP file then the WIP Form 11 must be updated to access the most current PUP data on record, but other information already inputted on the return must be re-inputted to the updated Form 11.
The amounts shown are as reported to Revenue by DSP. If this amount is incorrect the employee should contact DSP to ensure the correct amount is reported to Revenue. If the employee has proof that the PUP was fully repaid, they should input the correct amount in their income tax return, 0 in this instance, but they must ensure they keep this proof in case it is later questioned by Revenue.
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