Update on wage subsidy webinar with Revenue

Aug 28, 2020

Chartered Accountants Ireland, in partnership with Sage, recently hosted a webinar with Revenue on the Temporary Wage Subsidy Scheme (TWSS) and the Employment Waged Subsidy Scheme (EWSS). Revenue provided interesting insights on the TWSS reconciliation process, the monthly operation of the EWSS, details on the guidance for proprietary directors within the EWSS along with the treatment of employee’s tax liabilities on TWSS payments.  The webinar is available now for viewing along with the slides.

TWSS reconciliation process

Revenue confirmed that employers can make repayments of excess TWSS payments through ROS. Taxpayers and their agents should follow the instructions set out paragraph 6.1 of the TWSS FAQs and the Revenue website when making TWSS repayments. Revenue advised large employers to wait for the updated CSV files, which will be available in mid-September, before working through their reconciliations.

Monthly operation of the EWSS

Legislation for the EWSS provides for monthly wage subsidy payments, while the TWSS matches subsidy payments with the actual payroll frequency of the employer and therefore the EWSS may present cashflow challenges to many businesses. Revenue noted that changes to the frequency of the EWSS payment was a matter for the Department of Finance. Chartered Accountants Ireland will be raising this matter with the Government.

EWSS for proprietary directors

The initial drafting of legislation for the EWSS excluded an individual who is a proprietary director of a company. However, in recognition of the critical role many proprietary directors have played in providing employment to others, particularly in the SME sector, the Government requested the reinstatement of proprietary directors within the EWSS in July. Revenue confirmed that guidance on proprietary directors will issue over the coming week or so.

Grant income included in 30% turnover test

Employers must include all sources of trade income, specifically sales, donations, State Funding etc. in assessing their eligibility for the EWSS. Revenue indicated that further guidance on the EWSS is due to issue shortly, which will include details on the meaning of State Funding and the grants etc. to be included when assessing/ reviewing eligibility.

Employee tax liabilities on TWSS payments

Revenue confirmed that employee’s tax liabilities, arising from the receipt of TWSS payments, will be dealt with through an adjustment in their tax credits from 2022. Revenue confirmed that it will be possible for employees to spread the adjustment to their tax credits to minimise hardship in certain cases. Revenue published a TWSS employee FAQ document providing guidance for PAYE employees in receipt of the TWSS and indicated that further guidance will issue on the adjustment of employee tax credits.

Detailed guidance on the operation of both wage subsidy schemes is available in the Guidelines on the operation of the EWSS booklet and the TWSS FAQ document – Guidance on the Operation phase of the COVID-19: TWSS which commended on 4 May 2020.