The Employment Wage Subsidy Scheme was introduced on September 1
LIMERICK businesses have recived some clarity of the new Employment Wage Subsidy Scheme (EWSS) which came into effect on September 1.
Aileen Downes, Tax Director at EY Limerick addressed local businesses via a virtual event in partnership with the Limerick Chamber.
The event aimed to give clarity to businesses in Limerick on whether they were eligible for the new scheme as well as insights on how best to approach Revenue’s queries and how to close out of the original temporary wage subsidy scheme.
Local businesses were urged to look at their situation anew in relation to the EWSS, regardless of whether they qualified for the TWSS or not.
An eligible employer is one that will see a 30% downturn on turnover or customer orders due to Covid-19 in the second half of 2020 (July 1 to December 31). If a business sits within that bracket they are encouraged to register for the scheme.
For a business with 50 employees on the average industrial wage the scheme could be worth up to €300,000.
“The registration is straightforward and can be done on ROS. The one thing businesses will require is tax clearance. Most employers have that anyway, but if you don’t, apply for tax clearance, citing the EWSS as your reason,” explained Aileen.
While there may be some initial confusion between the two schemes, Aileen says the new EWSS scheme is much easier to administer for businesses compared to the previous scheme which was introduced in March,
“This is the payment of a subsidy, directly to an employer, for the employer to keep, rather than a subsidy, paid to an employer, to be passed onto the employee. The upshot for employers is that they no longer need to have a payment going through the employee’s payroll with the angst associated with tax bills building up for employees, or indeed employees not getting mortgages as a result of being on the wage subsidy,” she said.
Businesses can easily assess for which employees they can claim for on the scheme as well; a qualifying employee is effectively anyone who is on the payroll in real time, or, if a family member or a proprietary director, was on the payroll anytime up to 30 June 2020.
Given the uncertain nature of today’s environment businesses are advised to ensure they regularly check their positions in relation to the scheme.
“An employer must look at their position at the end of every month and see where they are at. If they are still on track to be greater than 30% down, they can continue to claim for the following month. If they are not, they must de-register from the scheme from the 1st of the following month,” said Aileen.