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Brexit has raised challenges for a number of companies and their Directors in the UK & Ireland. Our Partner, and Dublin Chair of BITA, Aidan Scollard, explains. Read more on pages 40 & 41: https://issuu.com/britishirishtradingalliance/docs/300dpi_issuu_singles_bita_magazine_edition_10_hype/s/11990119  

Phase 1 - March – 20^th April 2020     What is the Scheme?  

• The scheme will operate to refund employers up to 70% of the net wage paid to employee subject to the thresholds detailed below.
• Refunds under this Scheme will be issued to employers with 2 working days.
• It replaces the previous €203 refund scheme and any employer who opted to operate this scheme will be contacted by Revenue to transfer to this new scheme.
• Employers are encouraged, but not obliged, to top-up the subsidy to bring the net wages of employees as close to 100% as possible.
• The Scheme can be applied even if an employees working hours have been reduced.
• The Scheme will operate in 2 phases:

Phase 1 – March to 20^th April 2020 (this document only deals with Phase 1) Phase 2 – 20^th April 2020 onwards (awaiting further guidance from Revenue)   Who Qualifies for the Scheme?  

• The Scheme is available to employers who are:

experiencing significant negative economic disruption due to Covid-19 able to demonstrate a minimum of a 25% decline in turnover unable to pay normal wages and normal outgoings fully, and retain their employees on the payroll. The Scheme is only available to employees who were on the employer’s payroll as at 29^th February 2020 and for whom a payroll submission has already been made to Revenue in the period from 1^st February to 15^th March 2020. The employer is not to pay in excess of an employee’s usual net wages. Employers who avail of the Scheme will be published on Revenue’s website.   How will the Scheme Operate?   Phase 1 - For March and up to 20^th April 2020 (Transitional Period)  

• During this period the Scheme will refund employers a maximum of €410 regardless of the employee’s income.

• However for administration purposes the employer is being asked to return the following information on the payroll:

Set PRSI Class J9 Enter a non-taxable amount equal to 70% of the employee’s Average Net Weekly Pay to: maximum of €410 per week where the average net weekly pay is less than or equal to €586, or maximum of €350 per week where the average net weekly pay is greater than €586 and less than or equal to €960.

• The Scheme does not currently allow for any refund where the employees average net weekly pay is greater than €960 per week.
• No IT, USC or PRSI is to be levied on the subsidy payment through payroll. The subsidy will be liable to IT and USC on review at the end of the year. Revenue have yet to announce how this will operate.
• Employer’s PRSI at a rate of 0.5% (down from 11.5%) applies to any top-up amounts.
• IT and USC should be applied on any top-up amounts.
• It is likely that the Scheme will trigger tax refunds for employees and employers can pay over the tax refunds to employees. Revenue will reimburse the tax refunds to employers.

  Phase 1 Examples                                                                                               (a)   Average Net Weekly Wages €210   Anna’s average net weekly wages is €210. In Phase 1 the refund will operates as follows:   On the payroll submission the Covid-19 refund amount will be declared as €147 (i.e. €210 @ 70%). Revenue will refund the employer €410 regardless.   The over-refunded amount €263 (i.e. €410 - €147) will be due back to Revenue. Though we are awaiting guidance on how that will operate in practice.   (b)   Average Net Weekly Wages €550   Tom’s average weekly wages is €550. In Phase 1 the refund for Tom’s employer will operate as follows:   On the payroll submission the Covid-19 refund amount will be declared as €385 (i.e. €550 @ 70%). Revenue will refund the employer €410 regardless.   The over-refunded amount €25 (i.e. €410 - €385) will be due back to Revenue.       (c)    Average Net Weekly Wages €586   Jack’s net weekly wages is €586. The refund scheme will operate as follows:   On the payroll submission the Covid-19 refund amount will be declared as €410 (i.e. €586 @ 70%) and Revenue will refund the employer €410 regardless.   There will be no ‘over-refunded’ element in this case.   (d)   Average Net Weekly Wages €675   Jane’s average net weekly wages is €675 (as this is above the €586 threshold above, Jane’s maximum subsidy under the Scheme will be capped at €350). The refund will operate as follows:   On the payroll submission the Covid-19 refund amount will be declared as €350 (i.e. the maximum threshold for this wage amount). Revenue will refund the employer €410 regardless.   The over-refunded amount €60 (i.e. €410 - €350) will be due back to Revenue.   (e)    Average Net Weekly Wages €1,110 Mark’s net weekly wages is €1,100. He breaches the €960 net weekly wage maximum and therefore is not entitled to avail of the scheme.   Phase 2 – 20^th April 2020 Onwards   We are awaiting further guidance from Revenue in respect of this phase.   Kind Regards,   Vivian E. Nathan Managing Partner

There could be a silver lining to being told work from home due to Covid-19, you may be entitled to a tax refund. E-workers, i.e. employees who have to work from home, can be paid a tax-free daily amount of €3.20 by their employer to cover costs such as heating and electricity.   Even if your employer doesn’t, or isn’t in a position to pay you the daily rate, you can claim the tax relief at the end of the year via myAccount. Revenue may request a letter from your employer confirming that you worked from home and the period(s) you worked from home.   Please note that any such claim should be ‘reasonable’ as the costs incurred will be for both personal and work use. The refund will be based on a portion of the overall expenses incurred by the household.

The Irish Government has recently introduced unprecedented measures effective until March 29^th at the earliest in order to protect the safety of everyone amid the current COVID-19 outbreak. As part of this the government has recommended social distancing and working from home where possible for the workforce.   As a service-focused firm, Roberts Nathan takes this advice very seriously and we have implemented our business continuity plans to ensure that we can continue to properly service our clients.   Service continuity Our offices remain open and we have the systems, technology and effective work practices to enable our staff to work remotely and continue to deliver a high-quality service for our clients. We have a core management team working from our offices and a Partner will be available at all times. As a consequence of this we will have Partners and staff working from the office on a rotational basis and remotely where appropriate.  This position may change and we will advise if it does.   Contact   We will continue to operate our main office lines and all contact numbers remain the same. You can call or email your relevant Partner at any time with any queries. In terms of meetings we will not be conducting any face to face meetings for the time being. We can facilitate Skype, video and tele-conferences where appropriate.   Business supports   The Government have announced a number of measures to support businesses and individuals and we will issue a separate email on this in due course. If we can help with the completion of any applications or any other queries you might have at this time please let us know. You will note that at this point most of what has been issued is only initial guidance but we will endeavour to keep you as fully informed as we can as soon as further information has been released.   You are not on your own - We are here to support and help you and your business at this time.   Take care and stay safe.   Kind Regards,   Vivian E. Nathan Managing Partner   Roberts Nathan Business Advisors, Audit & Tax