As we are all aware, there have been a number of supports in place over the past number of months in order to safeguard businesses and employees during the Covid-19 crisis. One of the major supports in place that has changed format a couple of times this year but has been invaluable for many businesses is the Temporary Wage Subsidy Scheme (TWSS). This scheme allowed businesses to keep employees on their payroll during times the office may have been closed, or the business came under financial strain due to the pandemic, by having the Government cover the majority of an employee’s wage and the employer being given the option to top this up to the full amount. The subsidy has been extended into the New Year under new rules.
Unfortunately for some businesses, they may find themselves needing to pay back funds received through the scheme, as it has been reported that while the majority of companies have satisfied Revenue’s requirements for the scheme, as many as 66,500 or 10% companies in receipt of funds between March and August have failed to submit proof that these funds were used for the intended payroll purpose of paying employee wages. Compliance checks are not a new phenomenon with Revenue or TWSS as these have been ongoing since the change of the scheme in September, with some companies found in breach and required to repay their payments.
These businesses may be required to pay back a hefty €300m in subsidy repayments if they fail to satisfy Revenue’s reconciliation process before the timer runs out. These employers will be treated as owing the full amount paid out to them over this time period. It is worth noting that in addition to this, any companies failing to enter into the process will also find themselves excluded from Revenue’s debt warehousing scheme and will not be allowed to suspend their tax payments.
The first stage of the reconciliation process involves submitting the data as required as proof of how the funds were allocated, while the second stage could see Revenue assess employee payslips individually to assess the amounts paid against the amount received from the government, to ascertain if any outstanding amounts are in need of being returned.
We hope that this information will be of interest and use to you and that 2021 holds success and prosperity for you and your business. As always, we here at EcovisDCA are available should you have any concerns or queries about any business or financial matters.