The Temporary Wage Subsidy Scheme (TWSS) reconciliation balance is the difference between the subsidy amounts paid an employer by Revenue and the subsidy amounts properly due for the employees and paid to them.
A TWSS reconciliation exercise must be completed by employers by 30 June 2021.
Revenue have extended from 30 June 2021 to 30 September 2021,the expiry date by which employers may choose to pay employees’ tax liabilities arising from the TWSS without the application of BIK. This is to ensure employers who wish to avail of this option, have the fullest information available following the reconciliation process.
Revenue has also clarified that the BIK concession applies to the proprietary director(s) in the company, provided that the employer pays the TWSS related liabilities of ALL employees in the company.
Revenue notes that it will not be possible to provide the actual amount of income tax and USC arising from TWSS payments, payable by each employee for 2020. The amount payable is unique to each employee and therefore, it is essential that employers and employees engage with each other to agree the amount of the TWSS liability that the employer will pay.
If the payment made by the employer does not settle the employee’s TWSS debt, the balance payable will be collected by reducing their tax credits over 4 years, starting in January 2022 if the employee is subject to tax through the PAYE system and is not subject to self-assessment.
Revenue has maintained the position that self-assessed taxpayers and proprietary directors are NOT eligible to have the balance of tax collected by reducing their tax credits over 4 years. These taxpayers may qualify for the Income Tax Debt Warehousing Scheme. Those who are ineligible for this scheme can contact the Collector General to discuss payment options.
If you require our assistance in relation to a TWSS reconciliation exercise or any related matters, please do not hesitate to contact us.