As the measures introduced to help curtail the spread of COVID-19 increase, more and more businesses are impacted. As a result, the Government has introduced various supports to assist businesses, especially in the small and medium enterprise (SME) sector. These supports include:
Temporary COVID-19 Wage Subsidy Scheme
On the 24th of March the Government announced a Temporary COVID-19 Wage Subsidy Scheme to replace the previous COVID-19 Employer Refund Scheme. The wage subsidy scheme was initially expected to run for 12 weeks from 26th March 2020, however on the 5th of June, The Minister for Finance and Public Expenditure and Reform announced an extension of the scheme until the end of August 2020.
The operation of the Temporary Wage Subsidy Scheme will be available to employers who keep employees on the payroll throughout the COVID-19 pandemic. Employers are encouraged to retain employees on their books and make their best efforts to maintain the employees income or a significant portion of it.
Key Features of the Scheme
The scheme operates by paying a subsidy to an employer to cover part of their employees’ net wages. Therefore, it does not apply to the self-employed. The subsidy scheme will refund employers up to 70% of an employee’s net take home pay, up to a maximum weekly tax-free payment of €410. The scheme will be capped at net €350 per week for incomes between €38,000 and €76,000. The scheme does not apply to incomes over €76,000. Income tax, USC, LPT, if applicable, and PRSI are not deducted from the Temporary Wage Subsidy. The Subsidy will be liable to Income Tax and USC on review at the end of the year.
How to qualify for the Scheme
The scheme is available to employers from all sectors whose business activities are being adversely impacted by the COVID-19 pandemic and who retain staff on the payroll. Some staff may be temporarily not working, or some may be on reduced hours and/or reduced pay.
To qualify for the scheme, employers must:
- be experiencing significant negative economic disruption due to COVID-19,
- be able to demonstrate, to the satisfaction of Revenue, a minimum of a 25% decline in turnover. Revenue guidance on this point can be obtained Here,
- be unable to pay normal wages and normal outgoings fully,
- retain their employees on the payroll.
The scheme is confined to employees who were on the employer’s payroll as at 29th February 2020, and for whom a payroll submission has already been made to Revenue in the period from 1st February 2020 to 15th March 2020.
The names of all employers operating this scheme will be published on Revenue’s website in due course.
Full details on how to operate the scheme along with Revenue’s Frequently Asked Questions on the operation of the transitional phase of the Temporary COVID-19 Wage Subsidy Scheme can be found Here
Revenue – Information and Advice for Taxpayers
Businesses experiencing cashflow difficulties
Revenue outlined some key advice and actions taken to assist businesses experiencing cashflow and trading difficulties arising from the impacts of COVID-19. These measures include, inter alia:
- For SME’s the charging of interest has been suspended on late payments for January/February and March/April VAT and February, March and April PAYE (Employers) liabilities.
- The suspension of all debt enforcement activity until further notice.
- Non SME’s who are having difficulties in paying their tax liabilities should contact the Collector-General’s office through MyEnquiries. Alternatively, these businesses can engage directly with their branch contacts in Revenue’s Large Corporates Division or Medium Enterprises Division.
Local Property Tax (LPT)
For property owners who opted to pay their LPT for 2020 by Annual Debit Instruction or Single Debit Authority payment, the deduction date has changed from 21st March 2020 to 21st May 2020.
Property owners who have opted to make a payment by Annual Debit Instruction or Single Debit Authority do not need to advise Revenue or take any action. The payment date has been automatically changed to 21st May 2020.
Filing Tax Returns
Taxpayers should continue to file their tax returns even if payment of the resulting liabilities, in whole or in part, is not possible. Where due to COVID-19, key personnel that compute tax returns are unavailable, Revenue advise that the relevant return should be submitted on a best estimate basis.
The application of a late filing surcharge for Corporation Tax returns (CT1) for accounting periods ending June 2019 onwards is suspended until further notice.
Residence Rules – Force Majeure circumstances
Tax residence is determined by the number of days spent in the State. Where a departure from the State is prevented due to COVID-19, Revenue will consider this ‘force majeure’ for the purpose of establishing an individual’s tax residence position. Accordingly, the individual will not be regarded as being present in the State for tax residence purposes from the day after the intended day of departure.
The Revenue manual on e-Working has been updated to include:
- explanation of what constitutes an e-worker, with examples,
- conditions for payment by employer for home expenses of e-workers up to €3.20 per day without deducting PAYE, PRSI and USC,
- clarification that current Government recommendations for employees to work from home as a result of COVID-19 meet the conditions for payment by employer of home expenses up to €3.20,
- sets out the approach for employees claiming relief for allowable e-working expenses where employer does not make a payment.
Full details of these Revenue Measures can be found Here
Department of Employment Affairs and Social Protection
A range of measures to provide income support to people affected by COVID-19 have also been introduced. The measures, which assist both employers and employees, include enhanced illness benefit, a COVID-19 unemployment payment and a COVID 19 – Wage Subsidy Scheme.
The COVID-19 Emergency Unemployment Payment and the COVID-19 illness benefit have been increased to €350 per week.
Full details of these measures and more can be found Here
There is also a Short Time Work Support available from the Department which is an income support payment for employees who have been temporarily placed on a shorter working week and should assist employers during periods of temporary difficulty. Further details can be found Here.
Department of Finance
On the 18th March, the Minister for Finance and Public Expenditure & Reform announced new banking provisions to be discussed with the Central Bank. These provisions provide for flexible arrangements, including a payment break for mortgages and other loans. Customers affected by COVID-19 must contact their bank to discuss the flexibility available to them.
Full details of these proposals and more can be found Here
Department of Business Enterprise and Innovation
The Department of Business, Enterprise and Innovation have put a range of supports in place, including:
- A €450m Strategic Banking Corporation of Ireland (SBCI) Working Capital Scheme for eligible businesses impacted by COVID-19. Loans from €25,000 up to €1.5m will be available to eligible businesses at reduced rates, with up to the first €500,000 unsecured. Applications can be made through the SBCI website.
- A €200m Package for Enterprise Supports including a Rescue and Restructuring Scheme available through Enterprise Ireland for vulnerable but viable firms that need to restructure or transform their business.
- MicroFinance Ireland loans of up to €25,000 (€50,000 for existing MFI customers) are available as an immediate measure to specifically deal with exceptional circumstances that micro-enterprises – (sole traders and firms with up to 9 employees) – are facing. Applications can be made through the MFI website or through your Local Enterprise Office
- The Credit Guarantee Scheme will be available to COVID-19 impacted firms through the Pillar Banks. Loans of up to €1m will be available at terms of up to 5 and a half years.
- The Local Enterprise Office is offering a range of services to businesses, such as mentoring services and online trading vouchers. For details on this and other supports, visit the Local Enterprise Office website.
- A restart grant of up to €25,000 for micro and small businesses based on a rates/waiver rebate from 2019. Visit your Council’s website to apply.
- A six month commercial rates waiver for impacted businesses.
Government Supports for Hospitality Clients
- Business Adaptation Grant: The Government announced €26m in funding to be administered by Fáilte Ireland for tourism and hospitality businesses to contribute towards the costs of implementing Fáilte Ireland’s Guidelines for Re-opening. Costs such as those incurred in physically adapting premises to allow them to operate in the pandemic and expenditure on consumables, particularly the sanitisation of equipment and safety gear, are considered qualifying expenditure. Applications are open until 8 October 2020. Visit https://www.failteireland.ie/covid-19- adaptation-fund.aspx
- A €16m package for pubs, bars and nightclubs was announced on the 28th See https://dbei.gov.ie/en/News-And-Events/Department-News/2020/August/28082020.html. This package includes:
- 40% Restart Grant Plus Top Up for pubs, bars and nightclubs that remain closed to help them to reopen. Those businesses remaining closed and planning their re-opening can now receive a minimum of €5,600 and a maximum of €35,000 under the Restart Grant Plus. The deadline for the Restart Grant Plus is the 30th September.
- Waiver of court fees and associated excise and stamp duties relating to the renewal of pub and other liquor licences in 2020.
- Waiver of excise duty on on-trade liquor licences on renewal in 2020.
- Under the Restart Grant Plus scheme, support will also be provided for enterprises that could not access the original grant scheme, including rateable sports businesses and trading charity shops. Non-rated B&Bs will be eligible for a grant payment of €4,000. Applications will open shortly and more information will be available on www.failteireland.ie. https://www.failteireland.ie/COVID-19-adaptation-fund/who-can-apply.aspx
- The Stay and Spend Scheme – This incentive will see any taxpayer spending up to €625 on accommodation, food and non-alcoholic drinks, between October 2020 and April 2021, able to claim back up to €125 through a tax credit. Registration to participate in the scheme is now open for tourism accommodation and food and beverage businesses through Revenue’s Online Service, ROS.