The Minister for Finance, Paschal Donohoe TD, has encouraged businesses to avail of the range of support schemes in place to reduce the impact of new public health restrictions on their business.
Revenue continue to play a significant role in the delivery of critical Government supports to affected businesses that help to protect lives and livelihoods.
Minister Donohoe said: “Due to the exponential growth in the virus seen over recent days and weeks, the Government has taken the necessary step in introducing further public health restrictions to reduce the overall level of mobility across the country. This will impact many thousands of employers in our economy and I would encourage all those impacted to avail of the range of business supports which have been put in place throughout the pandemic to give businesses the best possible chance of getting through this difficult trading period.
The Government will continue to assess the effects of the Covid-19 pandemic on the economy and I will continue to work with Ministerial colleagues to ensure that appropriate supports are in place to mitigate these effects.”
Employment Wage Subsidy Scheme (EWSS).
Employment Wage Subsidy Scheme (EWSS)
The most significant support available is through wage subsidies, with over €4.5 billion worth of such payments having been made to employers since the pandemic began (through the EWSS and its predecessor the Temporary Wage Subsidy Scheme TWSS). The rate of subsidy under Employer Wage Subsidy Scheme (EWSS) was revised last October to better support businesses impacted with Level 5 restrictions imposed at that time. As announced earlier this week, the Government has decided to continue the enhanced rate of subsidy until the end of March 2021 to cover the current period of public health restrictions. This enhanced subsidy is estimated to cost an additional €38 million per week, totalling to €323 million by the end of March 2021.
To qualify for the EWSS, as well as having tax clearance, an employers must demonstrate that their business will experience a 30% reduction in turnover or customer orders as a result of COVID-19.
From 1 January 2021, the period for determining eligibility for EWSS will be Q1 and Q2, 2021 compared with the same period in 2019. Comprehensive guidance in this regard is available on the Revenue website.
Covid Restrictions Support Scheme (CRSS)
The CRSS is an additional targeted support for businesses directly impacted by restrictions introduced by the Government under public health regulations to combat the effects of the Covid-19 pandemic with the result that they have to temporarily close or significantly restrict access to their premises. Under the Scheme, qualifying businesses can apply to the Revenue Commissioners for a cash payment in respect of an advance credit for trading expenses for the period of the restrictions.
A total of €173 million has already been paid in respect of 17,600 business premises under this scheme.
Eligible businesses can make a claim to Revenue for a payment equal to 10% of the average weekly turnover of the business in 2019 up to €20,000, and 5% on turnover over €20,000. The payment is subject to a maximum of €5,000 for each week a business is affected by the restrictions. Where a business has more than one premises, they can claim for each trading premises separately.
Warehousing of tax liabilities
The Debt Warehousing Scheme allows VAT and PAYE (Employer) debts incurred by businesses during the period of restricted trading caused by Covid-19 to be ‘parked’ on an interest free basis for 12 months following the resumption of trading. At the end of the 12-month interest free period, the warehoused debt may be paid in full without incurring an interest charge or paid through a phased payment arrangement at a significantly reduced interest rate of 3% per annum. This compares to the standard rate of 10% per annum that would otherwise apply to such debts. The scheme was expanded in the Finance Act to provide similar arrangements for self-assessed income tax debt and Temporary Wage Subsidy Scheme over-payments.
In 2020, 70,000 businesses availed of the warehousing scheme in respect of €1.9 billion of tax debt.