Employers must be able to demonstrate a 30% reduction in turnover between July and December to qualify for the Employment Wage Subsidy Scheme which replaces the Temporary Wage Subsidy Scheme on September 1.
The Employment Wage Subsidy Scheme will provide a flat-rate subsidy to qualifying employers based on the numbers of paid and eligible employees on their payroll.
This differs from the TWSS which makes a payment to eligible employees via their employers.
Revenue has published guidelines outlining the eligibility criteria and supporting proofs that employers need to satisfy in order to participate in the Employment Wage Subsidy Scheme.
Collector-General, Joe Howley, provided key advice to employers on the actions some may need to take to ensure they can avail of the EWSS.
"To qualify for the EWSS, an employer must be able to demonstrate that their business will experience a 30% reduction in turnover or orders between 1 July and 31 December 2020 and that the decline is caused by Covid-19. Additionally, and unlike TWSS, the employer must have tax clearance to be eligible to join the EWSS and remain tax clear to continue receiving the EWSS benefits."
Tax Clearance is confirmation from Revenue that the tax affairs of the relevant business are in order. To qualify, the business and any persons or entities connected to the business must be compliant with all obligations under tax legislation in relation to the filing of tax returns and payment of taxes.
Generally, tax clearance is only required by businesses who wish to apply for or renew certain licences, or to access certain grants and schemes. As such, many employers have never needed to apply for tax clearance because of the nature of their business. However, to join the EWSS and remain eligible for ongoing EWSS payments, a business must hold tax clearance.
Mr Howley urged any employer who meets the qualifying criteria and intends to avail of the EWSS to immediately apply for tax clearance so that they can have the confidence of knowing that they will be able to receive the EWSS support from September.
"An application for tax clearance can be made quickly and easily online through the eTax clearance service in ROS. Successful applications will be confirmed on screen in 'real-time'. Similarly, any business who does not meet the requirements for tax clearance will be shown the reasons why the application was not successful. Once the outstanding matters have been addressed, the business can then reapply and get tax clearance."
Revenue's records indicate that approximately 16,000 employers who registered for the TWSS do not currently hold tax clearance and may have never previously applied as it was not relevant to their businesses.
By applying now they will be able to confirm their entitlement to tax clearance or will be given full information on the outstanding tax returns or tax debts that they will need to resolve to get tax clearance.
For any business that may have such outstanding matters to resolve, Mr Howley highlighted the measures contained in the July Stimulus package that provide additional opportunities for businesses to pay outstanding tax debt.
"Once you have filed all tax returns that are due , any Covid-19 related tax debts will be parked under the Covid-19 debt warehousing scheme. Additionally and importantly, if you are not in a position to pay older, non-Covid-19 tax debts, you can still obtain tax clearance if you enter a phased payment arrangement."
"A significantly reduced interest rate of 3% is available if you agree a phased payment arrangement for non-Covid-19 related tax debts before 30 September 2020. The reduced rate applies from the date the arrangement is agreed, is available across all tax types and compares to a standard rate of 8% or 10% per annum that would otherwise apply to a phased payment arrangement.
"The opportunity for a business with non-Covid-19 related tax debts to put an arrangement in place that will allow it to pay those debts over a reasonable period of time, at a very much reduced rate of interest and at the same time obtain tax clearance, one of the key eligibility criteria for EWSS, is very important. It is vital that businesses make sure they don’t miss out on this opportunity by taking the necessary action as soon as possible."
Mr Howley said businesses should take the important and practical steps now of filing any outstanding tax returns and paying or making arrangements to pay any non-Covid-19 related tax debt.
He said this will mean they will qualify for tax clearance and, provided all other conditions are met, will have access to the key financial support available to them under the Employment Wage Subsidy Scheme.