The Tax and Duty Manual – Part 05-05-19 – Payments on Termination of an Office or Employment or Removal from an Office or Employment – has been updated. Additional clarification on the tax treatment of ‘fire and re-hire’ scenarios is included and an example of a SCSB calculation with TWSS payments.

At paragraph 2.3 of the manual, additional clarification regarding the tax treatment of ‘fire and re-hire’ scenarios identifies that whether or not there is a redundancy is a question of fact to be established by examining the circumstances of each individual case. A redundancy will generally not be regarded as taking place where there is a ‘fire and re-hire’ agreement in place at the time of the termination, or there is otherwise an expectation or understanding by either party that an offer of re-hire would be made at some point in the future (irrespective of the terms of such an offer or the length of time between the fire and the re-hire).

Paragraph 4.3 of the manual now include details of the COVID-19 related concessionary measure regarding retraining costs paid as part of a termination (currently included in the COVID-19 hub of Revenue’s website). Retraining must be completed within 6 months of the course becoming available.

The examples included within the manual have also been refreshed the examples used throughout including an example on page 14 for a SCSB calculation which notes that TWSS payments should be included in the calculation of the average annual remuneration for the last 36 months service to date of termination of the office or employment.

See Revenue eBrief No. 136/21 for further details.