Ireland has extended two schemes intended to support businesses unable to trade as a result of the public health crisis and has pushed back the VAT Return of Trading deadline due to the recent reduction in the headline VAT rate. These measures are summarised here.
COVID-19 wage Subsidy Extension
The Employment Wage Subsidy Scheme (EWSS) provides a flat-rate subsidy to qualifying employers based on the number of paid and eligible employees on the employer's payroll. To qualify for the scheme, businesses must have tax clearance from the Revenue. They must also be registered for employer Pay-As-You-Earn and Pay-Related Social Insurance.
Under the scheme, employees are eligible if they are in receipt of weekly gross wages between €151.50 and €1,462, subject to certain exemptions. For the period from October 20, 2020, and March 31, 2021, the subsidy rates range from €203 to €350 per employee, depending on the level of weekly pay. The subsidy can also be claimed for certain proprietary directors.
The EWSS replaced the Temporary Wage Subsidy Scheme from September 1, 2020, and is now set to remain in place until March 31, 2021.
Debt Warehousing Scheme Extension
In January 2021, the Revenue confirmed that the debt warehousing scheme remains available to businesses experiencing tax payment difficulties arising from the current COVID-19 health restrictions.
This scheme allows businesses to 'park' tax debts, including employer tax, value-added tax and self-assessed income tax interest-free for 12 months following the resumption of trading. At the end of the 12-month period, businesses may settle the outstanding tax in a lump sum, free from interest, or pay it back over time, subject to an interest rate of 3% (the default rate on the overdue tax being 10%).
For SMEs, access to the scheme is granted automatically and on request to large businesses.
Importantly, businesses must continue to file tax returns during the period of restricted trading so that the tax debt can be included in the warehousing scheme.
VAT Return of Trading Deadline Extension
Finally, the Revenue has extended the Return of Trading VAT deadline (RTD). In Ireland, traders are required to complete and file an RTD annually. The RTD form details the total purchases and sales for the year, alongside the applicable VAT rate for each transaction. Normally, the RTD must be filed by the 23rd of the month following the end of the preceding accounting period.
Since the standard rate of VAT has been reduced temporarily from 23%to 21% for the period from September 1, 2020, until February 28, 2021, the Revenue has had to redesign the RTD to reflect this change. The Revenue has extended the deadline for its submission to March 10, 2021.