Full details of the July stimulus package
The main features were announced last week and now more details of the July Stimulus Package and being released. There are some very useful and valuable supports for businesses and we’ve set out below the main points and links to Government websites:
Employment Wage Subsidy Scheme (EWSS)
The following are the main points to note on the new Employment Wage Subsidy Scheme (EWSS) which will initially run in tandem with the existing Temporary Wage Subsidy Scheme (TWSS);
- The scheme will run from the 31st July 2020 to the end of March 2021.
- Employers who demonstrate to the satisfaction of Revenue that turnover or customer orders are estimated to have fallen by 30% for the period July to December 2020, compared to the same period last year, will be eligible for the EWSS.
- Under the EWSS, employers will receive a flat-rate subsidy of up to €203 or €151.50 per employee, per week, depending on the employee’s gross weekly pay. A subsidy will not be available for employee’s whose gross weekly earnings are less than €151.50 or greater than €1,462. Exact criteria on these rates has not been released yet.
- A 0.5% rate of employer’s PRSI will apply for employments that are eligible for the subsidy.
- Under the EWSS a subsidy will be available for new and seasonal employees, in addition to existing employees. The EWSS is also open to newly commenced businesses.
- In order to be eligible for the EWSS throughout the entire period, the employer must be entitled to obtain a Tax Clearance Certificate from Revenue.
- The employers must review their eligibility criteria at the end of each month for July 2020 to March 2021.
Apprenticeship Incentivisation Scheme
The Government have also announced the introduction of the Apprenticeship Incentivisation Scheme to encourage employers to take on apprentices in 2020. Employers will receive €2,000 upfront per apprentice and a further €1,000 after 12 months if the apprentice is still employed.
VAT Rate Reduction
- The standard rate of VAT is to reduce to 21% (from 23%) from 1 September 2020 until 28 February 2021. It is hoped that this temporary measure will improve cash-flow for businesses operating in the wider economy and stimulate consumer demand. Businesses should configure their systems to ensure the 21% rate is applied with effect from 1 September 2020.
- There is no change to the VAT rate of 13.5%.
Waiver of Commercial Rates
With limited exceptions, all businesses will be granted a waiver of commercial rates for the six months to end-September 2020.
Early carry back of 2020 losses
- A measure announced to ease the tax burden on businesses, particularly for those previously profitable businesses, will be the early carry back of 2020 losses against 2019 profits. The introduction of these new loss relief measures, both for the self-employed and companies, may lead to an immediate refund of some or all of the corporation tax or income tax paid in previous periods. Full guidance on this from Revenue is awaited.
- “Debt Warehousing” is an arrangement with Revenue whereby businesses affected by Covid-19 can delay the payment of their Payroll tax and VAT debts in part or in full from the 1st March 2020 to the date when sectoral restrictions are lifted.
- The tax debts will be parked for 12 months and no interest will accrue on the tax debts during the 12 month period.
- Thereafter, the tax debts will carry a reduced interest rate of 3% (down from 10%), until the debt is paid.
- The timeframe allowed to pay the ‘warehoused’ debt will be flexible and determined by the ability of the business to pay both Covid-19 related debts as well as meeting its ongoing tax liabilities as they arise in the normal course.
- For the warehousing arrangement to apply, all returns must be filed in accordance with Revenue guidance.
Restart Grant – Rates
An enhanced Restart Grant has been introduced by Government. The following are the main points;
- The maximum grant available will rise to €25,000 (up from €10,000) and the minimum payment will be €4,000 (up from €2,000).
- Firms that have already accessed the Restart Grant will be eligible to apply for a second top-up payment to a total combined value of the revised minimum and maximum grant levels. This is done through your Local Authority website.
- The criteria for accessing the scheme will include enterprises that have:
- 250 employees or less;
- Turnover of less than €100,000 per employee; and
- Reduced turnover by 25% as a result of COVID-19
Stay and Spend Incentive
This scheme is aimed at encouraging people to holiday within the country. This scheme will see any taxpayer spending over €625, on accommodation, food and non-alcoholic drinks, between October 2020 and April 2021, entitled to claim back €125 through a tax credit.
COVID-19 Online Retail Scheme
Enterprise Ireland will be opening a second Call under the Covid-19 Online Retail Scheme soon. This offers businesses support to develop their online presence through a further funding call of the Online Retail Scheme.
Funding for Businesses
A package of liquidity and enterprise investment measures worth €55 million will be put in place to support small and micro companies through additional resources for MicroFinance Ireland and the Local Enterprise Offices. This will include measures to reduce interest rates on lending for micro and small businesses, including grants equivalent to 0% interest on the first year of SBCI and MFI loans.
See the following links for further details.
For further information on the July Stimulus package please see the link below.
KEY TAX FILING DATES – September 2022 TAX HEAD RETURN PERIOD PAYMENT & September 6, 2022