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Revenue letter to CCAB-I on facility for employers to pay employees TWSS tax

Mr Peter Vale

CCAB-I Tax Committee

47–49 Pearse Street

Dublin 2

10 May 2020

Dear Peter,

Thank you for your letter of 5th March 2021, regarding the Revenue facility for employers to pay their employees’ Temporary Wage Subsidy Scheme (TWSS) tax liabilities, and the information contained in your member survey. Revenue has given significant thought to the issues raised in your above-referred letter.

In consideration of the issues raised in your letter, and in seeking to ensure that employers get the opportunity to review the TWSS Reconciliation process, I can confirm that Revenue has extended the Benefit in Kind (BIK) concession to the end of September 2021.

Revenue has also recently clarified that the BIK concession will apply where an employer pays the tax and USC liabilities of an employee who is a self-assessed taxpayer or, in joint assessed cases, if the employee’s spouse is self-assessed.

Revenue also confirmed that the BIK concession will apply where an employer pays the tax and USC liabilities of a proprietary director(s) in the company, provided that the employer pays the TWSS related liabilities of all employees in the company.

Full details are available in Revenue eBrief 097/21.

Revenue has also advised in the eBrief on the calculation of the TWSS tax liability arising. It is not possible for Revenue to provide the actual amount of income tax and USC arising from TWSS payments payable by each employee for 2020. The exact circumstances leading to the amount payable are unique to each employee and it is essential that employers engage with their employees to agree the amount of the TWSS liabilities that an employer is going to make good. The employee’s Statement of Liability will assist in determining the liabilities relating to the TWSS payments received.

Finally, I note your request that self-assessed taxpayers and taxpayers who are jointly assessed with self-assessed taxpayers are permitted to spread the payment of TWSS tax over four years. I cannot agree to this request as such taxpayers, provided they meet the conditions for income tax warehousing, can warehouse all liabilities including any tax and USC liabilities relating to the employee’s TWSS payments. The general terms of the scheme as they apply to income tax can be found in section 3.2 of the Information Booklet on Debt Warehousing. This facility is not available to a couple whose income is taxed exclusively through the PAYE system. If the self-assessed taxpayer(s) does not qualify for debt warehousing for whatever reason, he/she can contact Revenue to discuss their options to repay the debt, including the capacity to agree a phased payment arrangement.

I trust that the foregoing provides the necessary clarity to your members.

Yours sincerely,

Declan Rigney

Assistant Secretary.