Revenue have now commenced reviews on compliance with the Temporary Wage Subsidy Scheme (‘TWSS’) by contacting employers who have received TWSS payments. Immediate action is required.
Revenue is seeking documentary evidence to establish that:
- The scheme eligibility criteria are met
- The correct amount of subsidy is being claimed and paid to employees
- The subsidy amount is being correctly identified in employee payslips
- The scheme is operating correctly.
Generally, the information Revenue will require is:
- An outline of the business and its principal activities
- Name of the payroll operator
- Summary of the impact of the COVID-19 restrictions on business turnover
- Confirmation that payslips were issued to all employees for all relevant periods
- Confirmation that payslips displayed the scheme subsidy amount
- Copies of payslips for certain employees and pay periods.
There are only five days to respond to the Revenue’s request. Revenue may cease payments to employers who do not reply within the five days or who are not complying with conditions of the scheme.
Revenue may look for more detailed information depending on responses received.
As part of its review Revenue may also check that the PAYE real time system is being operated correctly by the employer and whether there are any outstanding tax returns.
The rules of TWSS are that a business must have suffered a significant negative impact as a result of the pandemic and must have minimum 25 per cent fall either in sales or orders. Revenue acknowledged that in March and April, when most companies had to make a decision on whether to avail of the subsidy scheme, they were relying on their best guess as to how their business would be disrupted. However if a business did not meet the eligibility criteria but had reasonable grounds for assuming it would, it should immediately cease claiming the subsidy. Revenue will require evidence of the assumptions supporting the original self-assessment of eligibility and, once the basis is reasonable, will not seek to claw-back the subsidy paid for the original period. If there was not a reasonable basis, the subsidy is repayable.
Where employers have PAYE/VAT returns not filed, they will be unable to avail of the favourable Debt Warehousing arrangements in respect of PAYE/VAT liabilities. This will be important for employers who wish to avail of the ‘debt warehousing’ scheme for PAYE/VAT liabilities incurred during the pandemic period. An up to date compliance record will be required in advance of availing of this scheme.
You should act ASAP when contacted by Revenue.