Temporary Wage Subsidy Scheme & COVID-19 employment tax updates

5 May 2020

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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

dhanberry@deloitte.ie

+353 1 417 2435

Colin ForbesTax Partner,

Global Employer Services

cforbes@deloitte.ie

+353 1 417 2993

Alison McHughTax Director,Private Clients

amchugh@deloitte.ie

+353 1 417 3624

Paula RuaneTax Director,

Global Employer Services

pruane@deloitte.ie

+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

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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

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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?

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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

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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

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• 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

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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.

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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

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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

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Emerging Issue

COVID-19 Global Mobility Tax Considerations

Social Security?

Irish PAYE?Working remotely overseas

Foreign withholding?

SARP availability?

Permanent Transfer to

Ireland

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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

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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

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