The deadline for employers to pay their employees Temporary Wage Subsidy Scheme (TWSS) tax without the application of Benefit-In-Kind rules is 30 September 2021 so employers should avail of the BIK concession now where they wish to pay their employees TWSS related tax liability.
Revenue will not apply BIK rules where an employer pays an employee’s income tax and USC liabilities which arise due to the TWSS. This BIK concession also applies where an employer pays the TWSS related tax liabilities of an employee who is a self-assessed taxpayer or is jointly assessed, and his or her spouse is self-employed.
The BIK concession also applies where an employer pays the TWSS related tax liabilities of a proprietary director provided that the TWSS related tax liabilities of ALL employees in the company are paid by the employer.
Revenue has confirmed to Chartered Accountants Ireland that there are a number of ways in which an employer can arrange to make payments of their employee’s TWSS tax related liabilities, including:
- providing funds directly to each employee to meet their income tax and/or USC liabilities as shown in their Preliminary End of Year Statement. These employees then pay their liability via myAccount; or
- amending the employers last payroll submission of 2020.
Further information for employers seeking to pay their employees TWSS related tax liabilities is available on the Revenue website. Appendix 3 of the Tax and Duty Manual Part 38-01-04E – Income tax return form 2020 (ROS Form 11) includes options for employer’s to calculate the TWSS related tax for a self-assessed employee or proprietary director.
Revenue requires that employers engage directly with employees and agree the value and method to pay the liability involved. Revenue has confirmed that employers paying the TWSS related tax for their employees will not receive a deduction under section 81(2)(a) TCA 1997.