Important updates for Irish Businesses during Coronavirus pandemic
Updated May 22, 2020
In light of the COVID-19 emergency, we will endeavour to provide business owners with updates on supports and initiatives that are available to assist those who have been impacted. If you would like to receive updates via email, please sign up to our mailing list.
HLB Sheehan Quinn is part of a select number of consultancy firms on the Enterprise Ireland approved directory. Clients that wish to engage with the Business Financial Planning Grant or COVID-19 Online Retail Scheme should get in contact our team as soon as possible.
Download our COVID-19 advisory brochure which outlines all of the latest information on funding supports and the Wage Subsidy scheme.
Restart Grant for Small Businesses
The Department of Business, Enterprise and Innovation announced details of the Restart Grant for Small Businesses, applications for which can be made from May 22.
Micro and small businesses can apply for grants of between €2,000 and €10,000 to get their businesses up-and-running again during phase 1 & 2 of the Government’s Roadmap for Reopening Society and Business.
To avail of the Restart Grant, applicants must be a commercially rateable business and:
Have an annual turnover of less than €5m and have 50 or less employees;
Have suffered a projected 25%+ loss in turnover from 1st April 2020 to end June 2020;
Commit to remain open or to reopen if it was closed;
Declare the intention to retain employees that are currently on The Temporary Wage Subsidy Scheme
Applications are to be made via local authorities and are expected to be available from Friday, May 22 onwards.
Applicants are required to provide the following details as part of their applications:
Turnover in 2019
Outline the level of impact COVID-19 has had on workflow
Estimated value of turnover loss from 1st April 2020 to 30th June 2020
Estimated % turnover loss from 1st April 2020 to 30th June 2020
Number of employees in receipt of the Temporary Wage Subsidy Scheme (TWSS)
Number of employees in receipt of the Pandemic Unemployment Payment (PUP)
If you need any assistance in preparing your application, please do not hesitate to speak with our team.
Enterprise Ireland Sustaining Enterprise Fund for Smaller Businesses
Enterprise Ireland has announced a specific Sustaining Enterprise Fund for Small Enterprise.
This fund will provide a €25k to €50k to eligible companies for a 3-month to support business continuity. It will support businesses who have been impacted by a 15% or more reduction in profit; and require access to liquidity to sustain business continuity.
Repayable funding of up to €50,000 available;
Companies with 10+ employees and turnover of €1.5m can apply for €25,000 in funding;
Companies with 10+ employees and turnover of €5m can apply for €50,000 in funding;
Eligible companies must provide a detailed project plan on application to detail;
Funding assistance sought
The expenditure underpinning the financial assistance
Summary cash flows for the next 3 months of trading (weekly for the first month)
How the project plan strengthens business continuity in order to strengthen the position of the company to be trading in 3 years’ time.
HLB Sheehan Quinn is part of a select number of consultancy firms on the Enterprise Ireland approved directory. Clients that wish to engage with Enterprise Ireland supports should get in contact our team as soon as possible.
COVID-19 Wage Subsidy Scheme
Revenue has released an update of their FAQ titled Guidance on the Operational Phase of the COVID-19: Temporary Wage Subsidy Scheme (TWSS), dated 30 April 2020.
The updates relate to the move from the initial Transitional Phase to the Operational Phase of the TWSS. The updated guidance contains the following:
The wage subsidy rates that are effective from 4 May (see 4.17 of the FAQ) and subsidy tapering;
Revenue will calculate each employee’s Maximum Weekly Wage Subsidy (MWWS) based on the employee’s Average Revenue Net Weekly Pay (ARNWP) and will provide this, along with other necessary information, to each employer (who is operating the scheme) in respect of each active employee. This will be provided in the Employer CSV file; information on how to download the file from Revenue and the consequences of not using the information provided in this file are provided in the FAQ;
At a future date, Revenue will perform a reconciliation of employer refunds made to the employer from 26 March up to 4 May. Where necessary Revenue will adjust the amount of future refunds that it will make to the employer to take into account the difference between the subsidy the employee was eligible for and the €410 that Revenue refunded to the employer during the Transitional Phase;
Confirmation that the employer does not have to cease the employment on the payroll for an employee to be able to receive the COVID-19 Pandemic Unemployment Payment (COVID-PUP). However, if an employee is receiving both COVID-PUP and the wage subsidy scheme, DEASP will cease their COVID-PUP payment;
Detailed worked examples in Appendix 3 of the FAQ, which illustrate the calculation of the subsidy for different levels of ARNWP and how the tapering of the subsidy applies;
That the Transitional Phase will apply to all TWSS submissions received on or before 3 May.
For more information, visit Revenue.ie.
'Warehousing' of Tax Debts due to Revenue
The Minister for Finance and Public Expenditure and Reform, Paschal Donohoe TD, has announced a further range of economic measures in response to COVID-19. These include legislating to permit Revenue to ‘warehouse’ VAT and Payroll tax debt that arose on foot of the COVID-19 related restrictions.
Following this announcement, Revenue has assured businesses severely impacted by COVID-19 that it will continue to work with them to agree payment arrangements that support both the capacity of the business to resume trading as well as the national recovery, post COVID-19.
While the finer details of this ‘warehousing’ measure have still to be worked out, Revenue has confirmed the following:
COVID-19 related VAT and Payroll tax debts, due from 1 March 2020 to the date when sectoral restrictions are lifted, will be parked for a period of 12 months
no interest will accrue on the tax debts during the 12 month period
thereafter, the COVID-19 related tax debts will carry a reduced interest rate of 3% (down from 10%), until the debt is paid
the timeframe allowed to pay the ‘warehoused’ debt will be flexible and determined by the ability of the business to pay both COVID-19 related debts as well as meeting its ongoing tax liabilities as they arise in the normal course
for the warehousing arrangement to apply, all returns must be filed in accordance with the Revenue guidance that has applied since the start of the current pandemic.
Additional information and clarifications will be provided in due course. For more, please visit Revenue.ie
COVID-19 Online Retail Scheme
The Department of Business, Enterprise and Innovation (DBEI) has today announced the introduction of the new COVID-19 Online Retail Scheme.
This fund which is administered by Enterprise Ireland will support Irish-owned retailers to enhance their digital capability and to develop a more competitive online offer.
Closing date for applications is Wednesday, May 27th (3pm)
Applications for funding will be invited through a public Call for submission of projects;
This is a Competitive Fund which will be administered by Enterprise Ireland on behalf of DBEI with a total fund size of €2m;
Successful applicants will be awarded funding to support a maximum of 80% of the project eligible costs with a maximum grant of €40,000;
Typical elements involved in developing a sophisticated and transactional online presence include research, consultancy costs for strategy development, implementation and training;
The applicant must be an Irish-owned retail enterprise that had 10 or more employees on or before 29 February 2020.
Temporary measures for Close Companies
In response to COVID-19 circumstances affecting a company, Revenue will extend the 18-month period for distributions by a further 9 months in respect of close companies for accounting periods ending from 30 September 2018 onwards, for which distributions to avoid the surcharge would be due by 31 March 2020 onwards.
The current COVID-19 circumstances may require many companies to retain cash in order to support their business and therefore companies may decide it is not prudent to make distributions at this time. The extended time will enable companies to be better-informed, in relation to the impact of the current circumstances, before making a distribution. To avail of this extended period a company must apply to Revenue for the extension.
Revenue have stated that contemporaneous records should be kept of the circumstances in which the application to delay making a distribution is made. Applications should be made through MyEnquiries, setting out the facts and circumstances that support the extension of the 18-month period. The application within MyEnquiries should refer to:
Enquiry relates to: ‘Corporation Tax’
More specifically: ‘Other Corporation Tax Query’
COVID-19 Wage Subsidy Scheme
Key information on operation of temporary scheme
Minister for Finance Paschal Donohoe has introduced changes to the COVID-19 Wage Subsidy Scheme as of April 15th, 2020 which are detailed in Phase 2 as outlined in the following section.
The Government introduced new measures with effect from 26 March 2020 to provide financial support to employees affected by the COVID-19 crisis. These measures will enable employees, whose employers are affected by the severe economic impact of COVID-19, to receive significant financial support directly from their employer through the payroll system.
Overview of the scheme
The wages subsidy will be paid by the Revenue Commissioners to employers who avail of the scheme. The scheme is available to employers across all sectors other than the Public Sector and Non-Commercial Semi-State Sector.
The scheme will provide a subsidy to employers for each eligible employee to enable the employer to retain staff in employment. The scheme is to operate for 12 weeks from 26 March 2020.
Employer eligibility and key steps:
To qualify for the scheme an employer must be experiencing significant negative economic disruption due to the Covid-19 crisis;
To this end the employer should be able to demonstrate that the employer’s turnover is likely to decrease by 25% or more for the period 1 April to 30 June 2020 and that the business is unable to meet normal wages or normal business expenses;
In relation to the likely reduction in turnover of 25% or more this should be supported by financial budgets taking into account the significant negative economic disruption on the employer due to the Covid-19 crisis;
Application for the scheme is based on self-assessment principles; a qualifying employer declares that it is significantly impacted by the crisis and registers for the scheme via ROS.
The registration process requires the employer to make a declaration to the Revenue Commissioners that as a result of the economic disruption caused by the Covid 19 crisis the employer cannot pay normal wages and outgoings fully but nonetheless wants to retain its employees on the payroll.
The declaration by the employer is not a declaration of insolvency.
Key features of the Temporary Wage Subsidy Scheme – Phase 1 (to 3 May 2020) are:
The employee must have been an employee of the employer on 29 February 2020 and be included in the employer’s PAYE return to the Revenue Commissioners for a pay date between 1 February and 15 march 2020;
The subsidy is the lower of 70% of the employee’s average net weekly pay (ANWP) or €410/€350 per week (or equivalent for fortnightly/monthly payroll);
The employee ANWP is calculated by reference to the employee’s net after tax pay for the pay days falling in January and February 2020, as reported to Revenue.
For employees receiving ANWP of up to €586 per week the maximum subsidy is €410. For employees with an ANWP of more than €586 but not exceeding €960 the maximum subsidy is €350 per week. For employees earning in excess of €960 ANWP there is no subsidy (see amendment announced by Minister Donohoe on 15 April below);
The employer is encouraged under the scheme to “top-up” an employee’s net pay. The employer can top-up the employee net pay by a maximum of 30% of net pay. Any amount paid to an employee in excess of that will result in a clawback of the subsidy paid to the employer on a Euro for Euro basis (further clarification is due on this point);
The employee subsidy is not subject to PAYE, USC or PRSI through the payroll system. However, the subsidy amount received by the employee will be subject to an end of year review by the Revenue Commissioners who may seek to collect income tax and USC, but not PRSI, from the subsidy payments received by the employee in 2020 (no details of how the review will operate are available);
*Any top-up payment made by an employer to an employee must be processed through the normal payroll system. The top-up payment will be liable to PAYE and USC but no employee PRSI is payable by the employee. The employer will be liable to employer PRSI under Class J9 at a 0.5% rate on the top-up amount;
The wage subsidy is included as a non-taxable payment in the payroll and is part of the payroll declaration made by an employer to the Revenue Commissioners via ROS. The Revenue Commissioners should reimburse the temporary wage subsidy to the employer within two days of filing the payroll declaration.
Key features of the Temporary Wage Subsidy Scheme – Phase 2 (applies from 4 May 2020)
Employees with net pay less than €586 per week (€38,000 p.a.)
Phase 1 of the scheme has resulted in many lower paid employees receiving less under the scheme as compared with what they would receive if they were laid off. To address this the Minister has announced the following changes:
for those employees with previous average net pay up to €412 per week the subsidy will be increased from 70% to 85% of their previous net weekly pay
for those employees with previous average net pay between €412 and €500 per week the subsidy will be up to €350 per week
In addition, where an employer wishes to pay a greater level of top-up in excess of the outstanding 15% of previous pay - (in respect of employees with net pay less than €412 per week) in order to bring the employee’s pay to €350 per week then tapering would not be applied to the subsidy.
There are no changes in respect of those whose previous average net pay was between €500 and €586 per week, who will continue to receive a subsidy of up to 70% of previous net income, up to a maximum of €410 per week.
Employees with net pay in excess of €586 per week (€38,000 p.a.)
For employees with previous net pay in excess of €586 per week, a tiered approach will apply. The maximum subsidy payable for these remains €350 per week. The tiered approach takes into account both the amount paid by the employer and the level of reduction in pay borne by that employee as follows:
|Gross Amount Paid By Employer||Subsidy|
|Up to 60% of employee’s previous average net weekly pay||Up to €350 per week|
|Between 60% and 80% of employee’s previous average net weekly pay||Up to €205 per week|
|Over 80% of employee’s previous average net weekly pay||No subsidy payable|
Tapering of the subsidy will apply to all cases where the gross pay paid by the employer and the subsidy exceed the previous average net weekly pay. This is calculated by subtracting the amount paid by the employer from the previous average net weekly pay. This is to ensure that no employee would be better off under the scheme.
The Minister has also determined that the wage subsidy is now available to support employees where the average net pre-COVID-19 salary was greater than €76,000, and their gross post-Covid salary has fallen below €76,000. The tiered arrangement applicable to gross incomes in excess of €38,000 will apply in such circumstances. This provision applies with effect from April 15, 2020.
The Revenue Commissioners and payroll software providers are currently working on updating systems to deal with the temporary wage subsidy scheme. Relevant systems are expected to be operational by 4 May (further updates/guidance can be expected from Revenue before then).
In the meantime employers may receive subsidy amounts of €410 per employee that exceed the actual subsidy amounts paid to employees. All excess subsidy amounts are to be repaid to the Revenue Commissioners in due course.
Eddie Coleman, Tax Compliance Partner, HLB Sheehan Quinn:
"The amendments to the scheme are to be welcomed as they address a number of anomalies and enhance the benefits for lower paid employees. Some anomalies still remain which should be resolved before the commencement of Phase 2 on May 4th."
Revenue have included some useful information in respect of the Scheme on its website.
Companies Registration Office
There has been a welcome development with regard to filing deadlines for annual returns with The Companies Office. All annual returns which are due to be filed between now and June 30 will be deemed to have been filed on time providing that all elements have been filed and completed by that date. This includes annual returns which have been filed but still within the 28 days to lodge the accounts and signature page. The situation will be kept under review and could be extended by the CRO if the current climate hasn’t improved by then.
Payment Break on Business Loan Repayments
The banks are to introduce a range of measures to help businesses affected by the outbreak of Coronavirus. This includes a payment break of 3 months on loan repayments. From speaking to the banks, understandably the administration of this measure is not straightforward. There is no simple way of just suspending the collection of payments on a whole scale basis. We understand there is an application process being worked on but in the meantime, if you wish to avail of a payment break you should contact your bank to request one.
Banks to introduce measures for customers and businesses impacted by Covid-19
Banking and Payments Federation Ireland (BPFI) advises the state's five banks have proposed a joint plan in support of customers and businesses affected by the Covid-19 pandemic. The proposed measures are summarised as follows:
1. Implement a payment break up to three months for business and personal customers affected by Covid-19, to be followed by ongoing reviews depending on the scale and extent of the situation.
2. The banks are committed to ensuring that any Covid-19 application for a payment break and further reviews will not adversely impact the customer's credit record, and the banks reporting of these facilities.
Banks are meeting with the Central Bank of Ireland to urgently achieve a solution in this regard.
3. Banks will also defer court proceedings for three months.
4. The banking system stands ready to provide working capital support.
Revenue has announced measures to assist SMEs experiencing cashflow difficulties arising from COVID-19. These measures are outlined as follows:
Businesses experiencing temporary cash flow difficulties should continue to send in tax returns on time, even where no payment will be made by the business.
Application of Interest
The application of interest on late payments is suspended for the January/February VAT return and both the February and March PAYE (Employers) liabilities.
All debt enforcement activity is suspended until further notice.
Current tax clearance status will remain in place for all businesses over the coming months.