Temporary Wage Subsidy Scheme & COVID-19 employment tax updates
5 May 2020
2
AGENDA
1:00pm Introduction - Daryl Hanberry
1:05pm Temporary Wage Subsidy Scheme – Karen Byrne, Alison McHugh and Paula Ruane
1:30pm COVID-19 - Global mobility and employment tax measures - Colin Forbes
1:40pm Q&A – Gearóid Murphy, Anne Dullea, Laura Glancy
SPEAKERS
Daryl HanberryTax Partner &
Head of Global Employer Services
+353 1 417 2435
Colin ForbesTax Partner,
Global Employer Services
+353 1 417 2993
Alison McHughTax Director,Private Clients
+353 1 417 3624
Paula RuaneTax Director,
Global Employer Services
+353 9 170 6034
Gearóid MurphyPrincipal Officer, Personal Division,
Revenue Commissioners
Laura Glancy, Assistant Principal,
Personal Taxes, Policy &Legislation Division,
Revenue Commissioners
Anne DulleaPrincipal Officer, Medium
Enterprises Division, Revenue Commissioners
Karen ByrneAssistant Principal, Personal Division,
Revenue Commissioners
3
Daryl HanberryDeloitte
Temporary Wage Subsidy Scheme
Karen Byrne Revenue Commissioners
Alison McHughDeloitte
Paula RuaneDeloitte
COVID 19 - Temporary Wage Subsidy SchemeDeloitte5 May 2020
Overview of Temporary Wage Subsidy Scheme (TWSS)
Emergency Measures in the Public Interest
(Covid -19) Act 2020
Financial support to eligible employees where employers
significantly affected by the pandemic
Maximise staff retention and viability of
employers business
Fair, reasonable, pragmatic approach to
the Covid- 19 Crisis
List of employer participants published
on www.revenue.ie
Register through ROS and nominate a refund
bank account
Self assessment principles with self declaration from
employer
Not a declaration of insolvency
Timeline of Scheme Changes
Date Action
24th March New measures announced by Government including TWSS
26th March TWSS introduced for a period of 12 weeks
28th March First refunds made by Revenue
15th April Minister of Finance announces new measures and rates.
16th April Employees with ARNWP over €960 per week but have
suffered a reduction in current pay are eligible for TWSS,
with effective payroll submission from 16th April, with pay
dates on or before 16th April
4th May TWSS commences Operational Phase
Operational Phase Subsidy rates
Those employees who earned, on
average;
Will receive a subsidy of;
≤ €412 per week 85% of ARNWP to a MAX of €350
• More than €412 and up to €500
per week
Flat rate of up to €350 per week
• More than €500 and up to €586
per week
70% of ARNWP, subject to a MAX of
€410 per week
• > €586 per week New tiered arrangement to a MAX
of €350
*Tapering or restriction of the subsidy shall apply to all cases, except those where ARNWP does not exceed €412 where the additional gross pay paid by the employer and reported on their payroll submission, plus the wage subsidy amount, exceeds the employee’s ARNWP.
Tiered approach
Where an employee who had ANRWP exceeding €960 and current
weekly pay has reduced;
Less than 20%; no subsidy is payable
• between 20% and 39%; a subsidy of €205 is payable
• Greater than 40%; a subsidy of up to €350 is payable.
Common Queries
• Tapering arrangements
• Cash reserves
• TUPE arrangements
• BIK
FAQ’s and Guidance
Further reading:
FAQ Document
Revenue Informational Web Page
(Covid -19) Act 2020
Eligibility and Proofs
12
Employer
To qualify, employers must self-declare to Revenue that they:
• have experienced significant negative economic disruption;
• Can demonstrate a minimum of 25% decline in turnover or customer orders;
• Have an inability to pay normal wages and other outgoings; and
• retain employees on their payroll
• Where “turnover” or “customer orders” tests cannot be applied then “other reasonable basis” will apply
Employee
The scheme applies to employees:
• included on employer’s payroll at 29 February 2020; and
• for whom a payroll submission has already been made to Revenue in the period to 15 March 2020 – rule now relaxed
TWSS – eligibility
13
TWSS - employer eligibility
Employer eligibility
How is fall in turnover
measured?
Appropriate “Top Up” by
employer
Cash reserves
Records to be maintained to
support position
Eligibility for Corporate
Groups
Eligibility on a Divisional
basis?
14
Employer eligibility – “other reasonable basis”
Key considerations
Where “turnover” and “customer orders” test
do not adequately demonstrate the
negative impact for businesses – may
qualify on some other “reasonable basis”
Starting point is that “turnover” and “customer
orders” test is not capable of being
applied
Not sufficient that employer does not meet the turnover
testRevenue
guidance must be sought in all such cases
Revenue provide example of a
business where contracts take 6
months to complete
15
TWSS phase II – considerations for employers
Sample subsidy
calculator available
on Revenue
website
Access Employer
CSV file:
ROS - Employer
Services – Request
RPNs
Re-hires after 1
May will not be
included on CSV
file. Expectation is
that refunds for re-
hires will be
reprocessed in
future
Import CSV file to
payroll or use
information
outside payroll to
calculate payments
to employees
Check if tapering
applicable.
Revenue calculator
applies tapering
but not all payroll
software packages
automatically
apply tapering
Refunds due within
2 banking days.
Employer will only
receive refund of
wage subsidy as
calculated by
Revenue after any
required tapering
16
• To receive full subsidy, maximum additional pay is the difference between €960 (or new net pay if lower than €960) and maximum subsidy
• Maximum subsidy payable is calculated by comparing current pay to employee’s ARNWP
• Subsidy is tapered to ensure the actual net pay received does not exceed €960 per week
TWSS – employees previously earning over €76,000 gross and have now taken a pay cut
Pre COVID-19 gross salary
ARWNP Additional
pay
Additonal pay as a % of ARNWP
Potential subsidy
Pay (potential
subsidy plus additional
pay)
Excess of pay over
€960
Available subsidy
(tapered)
Total Pay (subsidy plus
additional pay)PRSI
80,000 1,230 750 61% 205 955 0 205 955 J9
80,000 1,230 780 63% 205 985 25 180 960 J9
100,000 1,691 850 50% 350 1,200 240 110 960 J9
100,000 1,691 1,000 59% 350 1,350 390 0 1,000 Normal
17
TWSS – employees with ARNWP of up to €586
ARWNPPotential subsidy
Max additional pay before
taperingAdditional pay
Excess of pay over ARNWP
Available subsidy
(tapered)
Total Pay (subsidy plus
additional pay)PRSI
400 340 60 60 0 340 400 J9
400 340 60 100 40 300 400 J9
450 350 100 100 0 350 450 J9
450 350 100 160 60 290 450 J9
580 406 174 174 0 406 580 J9
580 406 174 200 26 380 580 J9
580 406 174 580 406 0 580 Normal
• Tapering of the subsidy shall apply to all cases where the gross pay paid by the employer plus the subsidy amount exceeds the previous ARNWP. The single exception to tapering is where an employer wishes to pay an employer contribution which when added to the wage subsidy for the employee does not exceed €350 per week. In such cases, tapering of the temporary wage subsidy shall not be applied.
18
TWSS – employees with ARNWP in excess of €586 but less than €960
• Tapering of the subsidy shall apply to all cases where the gross pay paid by the employer plus the subsidy amount exceeds the previous ARNWP
ARWNP Additional payAdditional pay %
of ARNWPPotential subsidy
Max additional pay
before tapering
Excess of pay over ARNWP
Available subsidy
(tapered)
Total Pay (subsidy plus additional
pay)PRSI
650 300 46% 350 300 0 350 650 J9
650 450 69% 205 445 5 200 650 J9
800 595 74% 205 595 0 205 800 J9
800 620 78% 205 595 25 180 800 J9
800 650 81% 0 800 0 0 650 Normal
19
TWSS - useful links
Deloitte guidance on theTemporary Wage Subsidy Scheme
COVID-19 – global mobility and employment tax updates
Colin ForbesDeloitte
2121
Key Revenue Announcements
COVID-19 Global Mobility Tax Considerations
Mobility Tax
Force Majeure
PAYE Dispensations
PAYE Exclusion Orders
Foreign Employments
SARP1A
Multi-State Workers
22
Emerging Issue
COVID-19 Global Mobility Tax Considerations
Social Security?
Irish PAYE?Working remotely overseas
Foreign withholding?
SARP availability?
Permanent Transfer to
Ireland
23
Key Revenue Announcements
COVID-19 Benefit-in-Kind Reliefs and Concessions
Taxis to/from Work
Health & Safety concerns – No BIK
Employer Provided Accommodation
Holiday/Flight cancellations
Key employee repatriation flight costsIntegral to the businessCancelled holidays/flights
Working from Home
E-workers: €3.20 per dayEmployer Provided Equipment
Small Benefit Exemption
Relaxation of rules for vouchers given to frontline and other key staff
Company Cars
No BIK if employer prohibits use/takes back possessionMileage based on Jan 2020
Temporary AccommodationReturning from abroad – self isolationFrontline staff in same house
24
COVID-19 Other Employment Tax matters
Share schemes• Extension of employer share
scheme reporting deadlines to 30 June 2020
• Restricted Stock Units & Foreign tax credits - reporting extension
Compliance interventions• Audit activity is not priority
SMEs• Debt enforcement
activity suspended
• No interest on late payments for Feb-Apr PAYE
Payment difficulties• Warehousing of tax
liabilities – 12 months
• Early engagement
Returns• File on time
• Don’t waste cash on penalties
• File early for refunds
Refunds• Open items & Appeals
• Revenue are prioritising
refund approvals
Q&A
Gearóid MurphyRevenue Commissioners
Gearóid MurphyRevenue Commissioners
Karen ByrneRevenue Commissioners
Anne DulleaRevenue Commissioners
Laura GlancyRevenue Commissioners
At Deloitte, we make an impact that matters for our clients, our people, our profession, and in the wider society by delivering the
solutions and insights they need to address their most complex business challenges. As the largest global professional services and
consulting network, with approximately 286,000 professionals in more than 150 countries, we bring world-class capabilities and
high-quality services to our clients. In Ireland, Deloitte has nearly 3,000 people providing audit, tax, consulting, and corporate
finance services to public and private clients spanning multiple industries. Our people have the leadership capabilities, experience
and insight to collaborate with clients so they can move forward with confidence.
This publication has been written in general terms and we recommend that you obtain professional advice before acting or
refraining from action on any of the contents of this publication. Deloitte Ireland LLP accepts no liability for any loss occasioned to
any person acting or refraining from action as a result of any material in this publication.
Deloitte Ireland LLP is a limited liability partnership registered in Northern Ireland with registered number NC1499 and its
registered office at 19 Bedford Street, Belfast BT2 7EJ, Northern Ireland.
Deloitte Ireland LLP is the Ireland affiliate of Deloitte NSE LLP, a member firm of Deloitte Touche Tohmatsu Limited, a UK private
company limited by guarantee (“DTTL”). DTTL and each of its member firms are legally separate and independent entities. DTTL
and Deloitte NSE LLP do not provide services to clients. Please see www.deloitte.com/about to learn more about our global network
of member firms.
© 2020 Deloitte Ireland LLP. All rights reserved.