It might not be obvious to the general public but many businesses across the country are finding their feet again after a tumultuous and uncertain year.
Of course, it will take the retail and hospitality sectors some time to navigate their way out of Covid-19 but there are a few positive signs from companies in the service and other sectors that things are picking up.
This has led to many employers investigating coming off the Employee Wage Subsidy Scheme (EWSS) and trying to stand on their own two feet again. But it is a hard decision to make and one that employers are not taking lightly.
What is the EWSS?
The EWSS replaced the Temporary Wage Subsidy Scheme (TWSS), which was introduced in March to help employers navigate through the Covid-19 pandemic and keep the link with their employees. The EWSS replaced the TWSS scheme from September 1, 2020, and is expected to continue until March 31, 2021.
In order to be eligible for the EWSS, a business needed to have a tax clearance certificate in place and must be able to show that the business will experience a 30 per cent reduction in turnover or customer orders between July 1 and December 31, 2020 – and that Covid-19 is the cause of this disruption.
Each employer must complete a monthly review to check their eligibility and they need to undertake this review on the last day of every month to ensure they continue to meet the criteria of the scheme. Check out our guide to Irish government grants for small businesses during the Covid-19 pandemic.
What happens if you're no longer eligible?
An employer will no longer be eligible if they don’t meet the 30% reduction in turnover and, once they complete their monthly review, they must cease their scheme if this is the case.
Many companies are now finding themselves in this position; that their predictions for the last month or two was not as bad as they had been expecting. If this is your position, rather than wait to see how next month is going, you need to exit from the scheme now.
If you are not sure whether or not you are eligible, speak to your tax adviser or accountant or contact Revenue.
If you are no longer eligible for the scheme, Revenue recommends ceasing the registration for the EWSS scheme on the 1st of the following month after completion of the month-end review.
How to stop the EWSS?
In order to cease the scheme, you will need to go to the ‘manage tax registration section’ on ROS and the option to deregister is under the EWSS section. Or ask your accountant to do so for you.
It is important to bear in mind that Revenue has said it will be carrying out compliance checks on the EWSS scheme in due course so there is no benefit in staying on the scheme if you are no longer eligible. Also, there is no need to worry about the following months as, if your circumstances change and you meet the criteria again in the New Year, you can always reregister.
There is also no particular obligation to inform your staff that you are coming off the scheme as the EWSS is not required to be displayed on the employees’ payslip. However, it might be good practice to let them know in order to keep your communication with staff open and to share the good news that you are in a much stronger position as a company than earlier in the year.
Need our help?
This article was written by Kiera McFeely, Payroll Manager at Accountant Online and it first appeared in the Sunday Business Post.
If you would like our help with your payroll, talk to our Client Services Team about your business and we will tailor our services to best suit your needs.
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Kiera leads the Bookkeeping, VAT, and Payroll Teams at Accountant Online. Kiera has worked in the financial services industry for over 18 years. She is passionate about helping businesses to get their finances in order so they can get back to what’s important: running your business. Kiera holds a part-qualified accountant qualification from ACCA.