Written answers

Thursday, 6 May 2021

Department of Finance

Wage Subsidy Scheme

Photo of Patricia RyanPatricia Ryan (Kildare South, Sinn Fein)
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48. To ask the Minister for Finance when persons that received large bills due to the taxing of the temporary wage subsidy scheme can expect to receive reviews; and if he will make a statement on the matter. [23359/21]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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The Temporary Wage Subsidy Scheme (TWSS), which operated from 26 March 2020 to 31 August 2020 provided income support to eligible employees whose employers were negatively affected by the COVID-19 pandemic. Payments made to employees through the scheme are liable to income tax and Universal Social Charge (USC). The scheme was replaced by the Employment Wage Subsidy Scheme (EWSS) from 1 September 2020.

On 15 January 2021, Revenue made a Preliminary End of Year Statement for 2020 available to all PAYE taxpayers through the online myAccount facility, including those who received TWSS payments and Pandemic Unemployment Payments (PUP) from the Department of Social Protection. The statement provides employees with a preliminary calculation of their tax position for the year before any additional incomes are declared or additional credits or reliefs are claimed.

To establish their final tax position for 2020, PAYE taxpayers should complete an income tax return, claiming any additional credits or reliefs due, for example health expenses. Once the income tax return is completed, a Statement of Liability will issue to the taxpayer(s) setting out the final position for the year. Any outstanding tax liability remaining after all credits and reliefs have been allocated can be collected, interest free, over four years from 1 January 2022 by reducing tax credits. The quickest and easiest way to submit the income tax return is through Revenue’s myAccount service. Further information regarding the end of year process can be found at: www.revenue.ie/en/jobs-and-pensions/end-of-year-process/income-tax-return.aspx, which may be of assistance to the Deputy.

In jointly assessed situations where one spouse is self-employed, any review of liabilities arising from TWSS are determined when the self-assessed spouse submits his/her income tax return for 2020. This return is due by 31 October 2021 (with an extension to 17 November 2021 provided for taxpayers who file and pay electronically). Any balances due in such cases are generally settled by direct payment at that point. However, the self-assessed spouse may qualify for the Debt Warehousing Scheme, which provides the option to defer the payment of COVID-19 related tax debts, including any tax and USC liabilities arising from TWSS payments to the other spouse. Further information on the Debt Warehousing Scheme is available at: www.revenue.ie/en/corporate/communications/documents/debt-warehousing-reduced-interest-measures.pdf.

Revenue has confirmed that some employers have agreed to pay, on behalf of its employees, underpayments of tax and USC for 2020 that have arisen due to the non-taxation in real-time of TWSS payments. Revenue has facilitated this arrangement by disapplying the benefit in kind rules, in respect of such payments, on an administrative basis. Further details are available at: www.revenue.ie/en/employing-people/twss/employers/index.aspx, which may be of interest to the Deputy. This facility applies also to employers who wish to settle the TWSS related debts of an employee who is jointly assessed and his/her spouse is subject to self-assessment.

However, Revenue has previously stated that for certain employees where their employer paid net weekly earnings of between €586 and €960 pre-COVID, the full amount of the subsidy due to such employees may not have been paid through the payroll process during the period the TWSS was in operation. The process of identifying those employees who qualify for an additional subsidy is currently in progress. Revenue intends to offset any additional amount against an individual’s outstanding income tax/Universal Social Charge (USC) due for 2020, or by way of direct refund if the person has no 2020 arrears. It is expected that this process will be implemented by the middle of this year when all the relevant data from employers has been reconciled and the required IT systems developments have been completed.


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