TWSS & Small Benefit Exemption Scheme Update

As the weather begins to turn its gaze towards Winter, so to do we begin to cast our eye towards wrapping up the 2022 business year and making plans for 2023. With that in mind, we wanted to bring you a newsletter detailing the current status of both the Small Benefit Exemption Scheme and the Employment Wage Subsidy Scheme (EWSS)

Small Benefit Exemption Scheme

As we cast our eye towards the year’s end, it would be impossible to avoid the ‘C’ word, Christmas! Many companies will now be beginning to consider ways in which to thank their staff for a job well done in 2022.

Under the Small Benefit Exemption Scheme businesses have the option to give employees, including directors, a voucher completely tax-free.

The total value of the tax free benefit/vouchers an employer can give an employee per year has increased from €500 to €1,000.

The number of qualifying vouchers per year has also increased from one voucher to two vouchers

The change applies for Tax Year 2022 and subsequent years

The Temporary Wages Subsidy Scheme (TWSS)

We are all aware of the Temporary Wage Subsidy Scheme (TWSS) and subsequent Employment Wage Subsidy Scheme (EWSS), the support schemes which funded employee wages during the COVID-19 pandemic in order to keep businesses open. These schemes were essential for many businesses, but many were left with a bill for funds owed in income tax and USC for the 2020 tax year which was an unexpected expense.

All employees can view their preliminary end-of-year statement for 2020 on Revenue’s MyAccount system. Each employee can check using this system to see the status of any underpayments of both USC and income tax.
Many employees found this underpayment on their account to be an unexpected cost, which was not covered by the employer in many cases. With this in mind, Revenue are now facilitating employers who wish to pay some or all of their employee’s 2020 tax liabilities. These employers must engage directly with their employees to agree on the value and payment method.

To pay the employee tax liabilities, employers can:

  • Provide the funds directly to the employees
  • They can amend the last payroll submission of 2020. They can do this by simply adding IT paid and USC paid.

There are no Benefit in kind (BIK) implications arising on the employee or the employer for paying off the tax bill.
The employer cannot take a deduction of the amounts when preparing his/her annual accounts. Revenue do not regard the payments as incurred exclusive and necessary incurred for the purposes of the service.