Coronavirus (Covid-19) will have a huge impact on businesses in Ireland and around the world. As a result, your business may be facing unprecedented challenges.
We are monitoring the situation very closely and will update this blog with new information as it becomes available.
This blog was updated on 12th October 2020 at 10:00 AM.
We’ll provide updates on the following areas:
- Payment supports for staff and employers
- Updates from Revenue
- Updates from the Companies Registration Office (CRO)
- Jobs and training
- Other important updates for businesses in Ireland
- Human Resources (HR) support
- Temporary Covid-19 Wage Subsidy Scheme. This is for businesses that are experiencing a significant decrease in trade but still have work for employees. This scheme is extended until March 2021 but will move to a new scheme from September 2020. If your employees are currently returning to work, you can still apply this subsidy as long as the business and the employee still fulfil the eligibility criteria. If you’re not sure if you’re still eligible, please talk to your accountant who can give you advice.
- The Employment Wage Support Scheme (EWSS) will replace the TWSS from September 2020 and will run until April 2021. Employers, whose turnover has fallen 30%, will receive a flat-rate subsidy of up to €203 per week per employees. New firms operating in impacted sectors will also be eligible, as well as seasonal and new staff. For more information about this, check out What is EWSS? The Employment Wage Subsidy Scheme Explained.
- Covid-19 Pandemic Unemployment Payment. This is for employees that have temporarily lost employment due to businesses closing. This payment is extended until 1st April 2021, but the rates will be reduced from 17th September 2020. It will also be closed for new applicants from 17th September 2020. As well as that, the PUP rates are being tapered back to standard jobseeker’s payment of €203 on 1 April 2021.
- Short Time Work Support. This is for employees that have been placed on reduced working hours due to reduction in work available.
- Enhanced Illness Benefit. This is for employees who cannot work due to being medically certified to self-isolate or diagnosed with Covid-19. This scheme is extended until March 31st 2021 and the 6-day waiting period before Illness Benefit begins continues not to apply in respect of medically required cases of self-isolation or medically diagnosed cased of Covid-19.
- Redundancy provisions. Under normal circumstances, if employees have been temporarily laid off or temporarily put on short-time hours, they can claim redundancy from their employer after 4 weeks or more, or 6 weeks in the last 13 weeks. However, due to Covid-19, you cannot claim redundancy. This provision is extended until 17th September 2020.
Tax updates and rates
- The main rate of VAT reduced from 23% to 21%. This is set to be in place from September to February 2021 (July Jobs Stimulus 2020).
- Commercial rates waiver extended until September 2020 (July Jobs Stimulus 2020).
- To provide immediate cash-flow support to previously profitable companies, the early carryback of trading losses will be allowed, leading to an immediate refund of some or all of
corporation tax paid (July Jobs Stimulus 2020).
- There will be a new income tax relief for self-employed individuals who were profitable in 2019 but, as a result of the Covid-19 pandemic, incur losses in 2020 (July Jobs Stimulus 2020).
- The interest rate applying to agreed repayments of all tax debt (where agreement has been reached prior to 30 September 2020) will be reduced to 3% (July Jobs Stimulus 2020).
- The RCT rate review scheduled to take place in March 2020 is suspended. The RCT rate reviews can be self-managed in ROS. Subcontractors can check if their rate should be lower and can then ‘self-review’ to get that lower deduction rate.
- Local Property Tax collection is deferred until 21 May 2020. Property owners do not need to advise Revenue or take any action. The payment date will be changed automatically to 21 May 2020.
- Current Tax Clearance status will remain in place for all businesses over the coming months. (A Tax Clearance Certificate is confirmation from Revenue that an applicant’s tax affairs are in order.)
- Close company surcharges apply to the income of close companies that is not distributed within 18 months from the end of the accounting period in which the income arose. Revenue states that “in cases where distribution is not made within that time in response to Covid-19 circumstances affecting the company, Revenue will, on the application, extend the 18-month period for distributions by a further 9 months.”
All Annual Returns due to being filed on or after 30 September 2020 will be deemed to be filed on time if all elements of the Annual Return are completed and filed by 26 February 2021.
This means that companies need to file their Annual Return as normal but you have until the 26 February 2021 to ensure all the steps are completed.
Companies still need to file their Annual Return on time, i.e. on the 28th day after your Annual Return Deadline (ARD).
However, entities are encouraged to file as normal during this period if in a position to do so.
Steps to filing your Annual Return under this new deadline
- Complete the form B1 on or before 28 days after your ARD
- Upload your financial statements by 26 February 2021
- Deliver the signature page as normal to the CRO by 26 February 2021
- 10,000 additional places on work placement and experience schemes available for those unemployed for over 6 months.
- 12,500 additional places funded through the Training Support Grant for short term skills training.
- 35,000 additional places in further and higher education.
- Apprenticeship Incentivisation Scheme will provide a €2,000 payment to support employers take on new apprenticeships in 2020.
- A Retrofit Skills Training Initiative will support future expansion of the National Retrofitting Programme.
- Subsidies of up to €7,000 over two years will be available for employers to hire someone under the age of 30 who is on the Live Register or the Pandemic Unemployment Payment.
- The Back to Work Enterprise Allowance and Back to Education Allowance will be extended to people currently in receipt of the Pandemic Unemployment Payment.
- 3,000 additional places will be funded on State Employment schemes such as Community Employment and Tús.
- Through Skillnet Ireland Covid-19 Employment Activation Scheme, businesses can avail of a range of supports including Covid-19 training supports, new digital skills, management training and a Climate Action Upskilling Scheme.
Social Welfare payments will be made every two weeks
Starting on the week of 23 March 2020, some Social Welfare payments will be paid on a double (two-week) basis. This means that instead of getting the payment weekly, you will be paid every two weeks.
This applies to people who collect their payments at post offices and people who are paid into a bank account.
Temporary arrangement for PPSN and PSC applications
- PPSN: Personal Public Service Number
- PSC: Public Services Card
The Department of Employment Affairs and Social Protection has temporarily postponed the current PPSN and PSC allocation process.
However, as you may need a PPSN in order to avail of services, you can apply directly by email.
All details about how to apply are available on the government website.
When to implement short time working
This is when there is still some work for employees but because of the current pandemic, there is a reduced workload. It involves changing employees hours of work on a temporary basis to work fewer hours.
If your employee is contracted for a certain number of hours, for example, 30 hours, you cannot change that agreement. Martina McAuley, Director of HR Team states however, if your organisation is faced with difficulties, such as a reduced workload due to Covid-19, employers are entitled to implement Short Time Working.
Under short time working, you need to notify your employee that you will continue to hold their job but their hours of work will be changed on a temporary basis.
When to temporary lay-off your staff
Employers can temporarily lay-off staff without payment from the organisation if there is no work for employees. McAuley explains that in order to instigate temporary lay-off, employees need to get a letter explaining how long this temporary lay-off will last. If you’re unsure how long it will last, McAuley recommends that employers set a date to review the situation, for example, in 2 or 3 weeks time, and keeping regular contact with your employees.
Employers are allowed to use a combination of short time working, then temporary lay-off and then short time working again as we start to come out of the Covid-19 situation.
When to implement redundancy
This is for work that you know will not come back as a result of the pandemic. McAuley advises any employers considering redundancy for their employees to wait and use temporary lay-off first. Temporary lay-off does not cost the employer anything so it’s a good idea to start there and revisit redundancy at a later stage if required.
How long can an employer use these measures?
McAuley says that case law suggests 8-10 weeks as a reasonable amount of time for short time working or temporary lay-off. However, in these unprecedented events, short time working or temporary lay-off may be required for as long as we are required to socially distance ourselves and self-isolate.
How can we support businesses in Ireland?
If you need further support, check out our other Covid-19 related blog posts:
We also offer tips for cash flow management for small businesses in Ireland. Take a look at these practical tips you can implement in your business.
You can also contact our Client Services Team if you are interested in learning more about our accountancy services in Ireland. Call us on +353 (0)1 905 9364 or email email@example.com. We’re here to help.