Chris Andrews (Dublin Bay South, Sinn Fein)
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290. To ask the Minister for Finance whether a company that has placed employees on the temporary wage subsidy scheme and submitted a questionnaire to the Revenue Commissioners but has not lost 25% of turnover will not have to pay anything back to the Revenue Commissioners on behalf of the employees; whether the employees will receive a tax bill at year end as a result of being on the scheme; and if he will make a statement on the matter. [15085/20]

Paschal Donohoe (Dublin Central, Fine Gael)
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The Temporary Wage Subsidy Scheme (TWSS) is a measure designed to maintain employment during the public health restrictions necessitated by the COVID-19 pandemic. To date, the scheme has provided in excess of €1.9 billion in support to almost 59,000 employers in respect of some 568,000 employees. There are approximately 410,000 employees currently receiving support through the scheme.

The Emergency Measures in the Public Interest (COVID-19) Act 2020 places the administration of the TWSS under the care and management of Revenue, which includes ensuring that this significant investment of public funds is properly allocated to eligible employers and employees. In the exercise of this important role, Revenue is conducting a programme of compliance checks on all employers availing of the scheme to confirm that they meet the eligibility criteria, and crucially that employees are receiving the correct amount of subsidy due to them.

In order to verify eligibility, Revenue is asking employers to summarise the impact of the COVID-19 restrictions on their business, the basis on which they reasonably anticipated a reduction of 25% or more in their turnover in Quarter 2 of this year, and whether the expected level of reduction actually occurred. I assume that the questionnaire referred to by the Deputy relates to this information request.

I am advised by Revenue that, where a business had a reasonable basis for projecting a minimum 25% decrease in turnover, but ultimately suffered a lesser reduction in trade, it will require that employer to exit the scheme on a prospective basis, but will not seek retrospective repayment. However, where a business was clearly not eligible for the scheme or failed to pay the correct level of subsidy to its employees, or abused the scheme in any other way, there will be a requirement to repay the funds received. Revenue has also advised me that any identified abuse of the TWSS will also lead to a more in-depth examination of the employer’s overall tax position.

TWSS payments to employees are liable to both income tax and Universal Social Charge (USC) by the employee. These amounts are not being collected in real-time through the PAYE system but will instead become liable by the employee at year end and will be calculated by Revenue as part of the ‘End of Year Review’ process. However, the level of tax and USC due by any employee may be reduced or eliminated by the amount of unused tax credits available. Any liability due may also be further reduced if the employee has additional tax credits, for example health expenses, to offset. Revenue has also very recently placed all recipients of the TWSS (and the Pandemic Unemployment Payment) on the ‘week 1 basis’ of taxation for the remainder of 2020 to ‘preserve’ unused tax credits that can then be used to offset any tax or USC liabilities that arise.

Revenue has also assured me that if any tax and USC liabilities still arise following the allocation of unused credits, it will work with the employees impacted upon to collect the outstanding liabilities over an extended period. This will be achieved by reducing their tax credits for future years, thereby minimising any financial hardship to the greatest extent possible.