The Revenue have now published detailed Guidelines on the operation of the Employment Wage Subsidy Scheme (EWSS), outlining the eligibility criteria and supporting proofs that employers need to satisfy in order to participate in the scheme. In a press release, the Collector-General, Joe Howley, provided key advice to employers on the actions some may need to take to ensure they can avail of the EWSS from 1 September; “To qualify for the EWSS, an employer must be able to demonstrate that their business will experience a 30% reduction in turnover or orders between 1 July and 31 December 2020 and that the decline is caused by Covid-19. Additionally, and unlike TWSS, the employer must have tax clearance to be eligible to join the EWSS and remain tax clear to continue receiving the EWSS benefits.”

Mr. Howley urged any employer who meets the qualifying criteria and intends to avail of the EWSS to immediately apply for tax clearance, so that they can have the confidence of knowing that they will be able to receive the EWSS support from September. An application for tax clearance can be made online through the eTax clearance service in ROS.

Revenue’s records indicate that approximately 16,000 employers who registered for the TWSS do not currently hold tax clearance and may have never previously applied as it was not relevant to their businesses. By applying now, they will be able to confirm their entitlement to tax clearance or will be given full information on the outstanding tax returns or tax debts that they will need to resolve to get tax clearance. Mr. Howley also reminded businesses on the provisions in the July Jobs Stimulus to deal with debt, in particular the debt warehousing arrangement and the provision to enter into a Phased Payment Arrangement by 30 September and qualify for a 3% rate of interest on outstanding debt.

The 21-page Guidelines on the Operation of the Employment Wage Subsidy Scheme cover a range of issues, including:

• How an employer can check their tax clearance status on ROS and identify any outstanding issues.
• The employer registration process. Registrations open from next Tuesday, 18 August and registration applications will only be processed if the employer is registered for PAYE/PRSI as an employer, has a bank account linked to that registration, and has tax clearance.
• Examples to illustrate how the scheme will operate.
• The backdating of a claim to 1 July relating to certain employees excluded from the TWSS, for example, employees of new entities, seasonal employees and new hires with payment for July/August made via a “sweepback” in September.
• The tax treatment of the subsidy for the employer and the treatment for payroll purposes.
• Additional guidance on determining whether the required reduction in turnover or customer orders has occurred and allocation of the test at entity or divisional level, and the use of an alternative “reasonable basis” where application of the “turnover” and “customer orders” tests cannot be applied.

Read the press release

Read the Guidelines

This new scheme is quite different from the TWSS both in how it operates and in the criteria to be eligible for claiming.  If you have any questions about the new scheme or how it will impact your business please do not hesitate to contact us.