Chartered Accountants Ireland acknowledges the swift and effective business supports put in place by the Government this year. We are part of an international community of accountancy bodies from all over the world and based on our discussions with colleagues in other countries, Ireland’s COVID-19 business supports are among the most effective in the world.

Many businesses are struggling to stay afloat and the continuation in 2021 of supports like the Covid Restriction Support Scheme (CRSS) and the Employment Wage Subsidy Scheme (EWSS) is essential. Your confirmation on Budget Day that the wage subsidy scheme would continue in 2021 gave businesses the security they need to continue trading under difficult circumstances. We look forward to the announcement on what form the 2021 wage supports will take when the Government has had an opportunity to consider the economic conditions as noted in your Budget Day speech.

Our members are skilled and expert accountants working in business and in practice. They have played a crucial role in helping the organisations they work in and work with to access all Government support schemes. While the supports are readily accessible and the payments are extremely efficient and well managed, there is a considerable level of tax compliance attaching to the supports which require a substantial amount of time and management by businesses and their accountants. This is in addition to all other tax compliance obligations of a business. For example, the Temporary Wage Subsidy Scheme involved the original self-assessment application to access the scheme, an eligibility check with a five-day turnaround subject to a written request for an extension, and a reconciliation process involving a review of every pay slip for every payment date for every employee of an employer who claimed the subsidy, followed up by an obligation to return employee BIK details within 28 days of notice. These compliance obligations run in tandem with a business’s normal duties to file VAT returns, PAYE returns and corporation/income tax returns and deal with Revenue aspect queries and desk audits. All the while, the business is adjusting its operations in response to public health restrictions.

It is fitting that appropriate checks are in place to safeguard the Irish taxpayer’s money. However, these checks should be proportionate, and the compliance should be simplified where possible. For example, a business is eligible for the EWSS if it can demonstrate a 30 percent reduction in turnover in July to December 2020 when compared to the same period in 2019. The business is obliged to self-review each month to assess eligibility and cease EWSS claims or make EWSS claims accordingly. Employers understood as per the legislation and Revenue guidance that if eligibility was satisfied on 30 November, then the employer would remain eligible for the EWSS payment until March 2021. Many businesses made commercial decisions, including hiring staff, on this basis. However, EWSS rules are changing under Finance Bill 2020 as per a Select Committee Stage amendment. The Bill is agreed by the Dáil but is yet to be signed into law as an Act.

Section 63(3)(d) of the Bill amends Section 28B of the Emergency Measures in the Public Interest (Covid-19) Act 2020 to provide that from 1 January 2021, an employer must demonstrate that their business is expected to experience a 30 percent reduction in turnover or orders between 1 January and 30 June 2021 when compared to 1 January and 30 June 2019. As EWSS operates on a pay date basis, the new eligibility test applies to all wages paid on or after 1 January 2021. Many businesses will find it very challenging, if not impossible, to prepare the new projections for January to June 2021 in such a short timeframe. Many are busy with Christmas trade and getting back on their feet after lockdown. It is not clear why this rule change is necessary as it is likely that the same businesses which qualified under the original test will qualify under the new test. For those who do not now qualify, they will most likely have to make staff redundant.

We have raised this matter with Revenue. We hope that a practical accommodation can be made for the many businesses unable to deal with the EWSS rule change. Revenue has exercised a pragmatic approach to tax obligations since the start of the Pandemic and this approach has been very helpful to businesses.