Important updates for Irish Businesses during Coronavirus pandemic

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.

COVID-19 Wage Subsidy Scheme

Revenue have announced temporary support measures for employees whose employer’s business is being impacted significantly as a direct result of the Covid-19 pandemic. This support measure is separate to the previously announced Employer Covid-19 Refund Scheme and is certainly very welcome to assist with maintaining employment.

Employers seeking the benefit of the scheme should be able to demonstrate that their turnover has decreased by a minimum of 25% as a result of the pandemic, that it is unable to fully meet and pay its employees normal wages and employees should be retained on the payroll system. There is no detailed guidance issued as yet as to how employers will demonstrate the above to revenue.

Employers are encouraged to make their best efforts to ensure its employees continue to be paid a significant (or even 100%) of their normal salary. However, in situations where this is not feasible, the Temporary Wage Subsidy Scheme (“the Scheme”) will operate for a proposed 12 week period from 26 March 2020. The Scheme applies to employees on the payroll system of their employer on or before 29 February 2020 and whose employer made a payroll submission during the period 1 February 2020 to 15 March 2020.

Therefore in most cases we expect the subsidy to be applied for the months of April, May & June.

In order to avail of the benefits of the Scheme, employers who previously registered for the Employer Covid-19 Refund Scheme should operate their periodic payroll as normal from 26 March 2020. Alternatively, where the employer has not registered for the Employer Covid-19 Refund Scheme, the employer should register for the Scheme through Revenue’s Online Service.

Following submission of the payroll, a maximum amount of €410 per eligible employee will then be refunded (generally within two working days of receipt of payroll submission) to the employer.

From April, the Scheme will allow a subsidy payment to employers based on 70% of the employees average weekly income (subject to the above maximum weekly amount of €410). Therefore the subsidy will be a non –taxable amount equal to the employee’s net take home pay or €410 whichever is the lesser. Payments made under the Scheme will not be subject to tax (i.e. income tax, PAYE, PRSI or Local Property Tax where applicable).

In addition, employer PRSI will be reduced by 10% to 0.5% on any top up payment (the current rate is 10.5%).

When operating the periodic payroll, employers should enter a non-taxable amount of the lessor of the employees net take home pay, or €410. Where the employer is unable to pay its employee as normal, or make any top up payment €0.01 should be entered as “Gross Pay”. Where an employer is in a position to make an additional wage payment to its employees, this amount should be included in the “Gross Pay” section.

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.

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Revenue Forbearance

Revenue has announced measures to assist SMEs experiencing cashflow difficulties arising from COVID-19. These measures are outlined as follows:

Tax Returns

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.

Debt Enforcement

All debt enforcement activity is suspended until further notice.

Tax Clearance

Current tax clearance status will remain in place for all businesses over the coming months.

February Payroll Liability

In many instances, the February payroll liability is already filed with Revenue. The mechanism to seek to have this payment cancelled is as follows:

  • Send a message to Revenue to cancel the payment through My Enquires. Revenue have advised that they will be dealt with on a first come first served basis. There is no facility to call to confirm that they have received or acted on the instruction. If received and acted upon before the payment has been debited, they will reply through my enquiries.

  • When submitting a payment cancellation notice via My Enquiries you must select the following:

Enquiry Relates to Other than above
More Specifically Revenue On-Line Services (ROS) payments.

Alternatively you may be able to manage the cancelling of the payment with your bank.

If you require assistance please get in touch.

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SBCI Working Capital scheme

The Department of Business, Enterprise and Innovation has put a range of supports in place to assist SMEs deal with the challenges caused by COVID-19.

A €200m Strategic Banking Corporation of Ireland (SBCI) Working Capital scheme for eligible businesses makes loans of up to €1.5m available at reduced rates, with up to the first €500,000 unsecured.

For more information or to make an application, see the link below.

SBCI Working Capital Scheme