Revenue Warehousing & Covid Subsidies Update
by Dave O'Brien
Update on Government Financial Supports
Over the last couple of weeks, the government have announced numerous different updates on the existing schemes that are in place, also giving a quick overview of the new Business Resumption Support Scheme. This note gives a high-level summary of the changes to these schemes. Of course, if you require further details on any of the schemes mentioned below, please contact myself or your point of contact in Quintas and we can discuss how your business could stand to benefit from these financial supports available.
Employment Wage Subsidy Scheme (EWSS)
Good news is that the EWSS will be extended until 31st December 2021. The current rates of payment will continue until 30th September and the requirement for a 30% reduction in turnover remains. For Q4 of 2021 the government has yet to decide on the payment rates or whether an increased employer contribution will be required.
The only noteable change for the next 3 months is that the reference period is for the full 12 months of 2021 compared to the full 12 months of 2019. The reference period previously was the first 6 months of 2021 compared to the first 6 months of 2019. What this really means is that from July onwards if you believe your turnover will not be down 30% for the full year compared to 2019 then you will no longer qualify for the scheme.
Pandemic Unemployment Payment (PUP)
Some of the main changes are:
Closed for new entrants from 1st July 2021
Final payment of the PUP for students will be 7th September
From 7th September the support for existing participants will be reduced by €50 per week
The payment will further decrease in November 2021 and February 2022
Covid Restrictions Support Scheme (CRSS)
This scheme really was the saviour of many businesses. It is being extended to 31 December 2021 which is great for those businesses that will continue to qualify. If a business has resumed trading and they are no longer restricted by regulations then they will cease to qualify for the CRSS, even if they are not yet open to business. However, they would then be able to make a claim for an enhanced restart payment. The enhanced restart payment is in respect to a 3-week period and is double what you would be allowed to claim via the normal CRSS. Thankfully the maximum amount that can be claimed (in respect of the enhanced payment only) is €10,000 per week as opposed to the usual €5,000 weekly limit. This means that someone who was claiming €3k per week from the CRSS can now claim €18k as a restart payment once restrictions are lifted.
Pubs and restaurants, for instance, who are allowed outside dining are still restricted therefore they can continue to qualify for the CRSS (if turnover is not more than 25% of the average weekly turnover in 2019). These businesses should not claim the enhanced restart payment until such time as they cease to qualify for the CRSS as once you claim the enhanced restart payment you will automatically cease to qualify for the CRSS.
Businesses, such as hotels, which do not need to significantly restrict access from 2 June will now cease to qualify for the CRSS irrespective as to whether they decide to reopen or not.
Business Resumption Support Scheme
This is a brand-new scheme and one which will be needed by some industries. Details of this scheme are unclear, and it will not come into existence until September. Businesses whose turnover is reduced by 75% for the period, 1st September 2020 to 31st August 2021 compared with 2019 will be eligible. Thankfully there appears to be no restrictions based on physical premises, rates or location. The amounts available will be similar to the CRSS and it will be run in a similar way. Businesses who previously qualified for the CRSS or other financial supports can still qualify for this support scheme. No further details are currently available on this and we will update you in due course once the finer details are announced.
Small Business Assistance Scheme
This scheme was not as beneficial as many others as the amount to be claimed was limited to €4,000 and businesses had to have a minimum turnover of €50,000. The real drawback was that businesses had to have a rateable premise. This condition has now lifted so it is worth businesses investigating whether this scheme might apply to them. For instance, a self-employed person working from home may now qualify. As before you cannot claim this and the CRSS. Additionally, also note that where a business has turnover between €20k and €50k they will now qualify for a grant of €1,000.
Tax Debt Warehousing Scheme
A very positive development here it would seem. Revenue guidance suggests that the scheme will extend to 31 December 2021 with an interest free period for all of 2022 for all eligible taxpayers. My understanding of this is that for anyone who has warehoused PAYE or VAT liabilities will now not be subject to interest on these taxes until 2023 and at that point the interest rate is only 3% (compared to the usual 10%). Also confirmed is that overpayments of the TWSS and EWSS can also be warehoused. Anyone who is unsure as to whether they have warehoused tax liabilities should contact their advisors straight away as Revenue are still accepting warehousing applications.
One negative point though is Revenue have not changed their view on directors claiming a PAYE deduction in their income tax return, where the company is warehousing the PAYE. This means that directors may have a substantial income tax liability in October if their company has not paid PAYE for the 2020 period.
We appreciate this is a high-level overview of some of the changes that have been announced. While I know business owners are feeling drained from the past 15 months and are looking forward to reopening it is still worth having another look at these schemes to see if there is anything further which you may be entitled to.
Please let us know in Quintas if you need any further guidance on this.