Chartered Accountants Ireland, in partnership with Sage, recently hosted a webinar with Revenue on the TWSS and the EWSS. On the day over 260 attendees tuned in to hear insights from Revenue on the TWSS reconciliation process, the treatment of employee’s tax liabilities on TWSS payments, and the monthly operation of the EWSS. The webinar is available now for viewing.

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 in 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.

Grant income included in 30 percent turnover test

Employers must include all sources of trade income, specifically sales, donations, State Funding etc. in assessing their eligibility for the EWSS. Revenue published updated guidance on the EWSS in early September, which includes details on the treatment of State Funding and the grants.

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 over a number of tax years 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 how Revenue will collect the tax due on TWSS payments.

Detailed guidance on the operation of both wage subsidy schemes is available on Revenue’s website under the Guidelines on the operation of the EWSS booklet and the TWSS FAQ document – Guidance on the Operational phase of the COVID-19: TWSS which commenced on 4 May 2020.