Revenue Update
by Dave O'Brien

Wage Subsidy Scheme Spot checks and Eligibility for July/August


The Revenue have been working hard on the wage subsidy scheme (“TWSS”). They are currently at version 16 of their FAQ’s – I think if you have to amend the frequently asked questions section of any guidance 16 times then it is a clear sign that the scheme was incredibly over complicated to begin with. Could the government just have paid qualifying workers their gross salary with a max limit of €350 per employee? This could have gone to their employers who would have just paid them as normal and paid the tax as normal.


Anyway, there is no going back now. The prevailing issue now is whether companies will continue to qualify for the scheme for July and August. We are getting mixed signals on this from Revenue. Recently an e-brief was published which said that the criteria has not changed to qualify for the scheme. I quote the following directly from the e-brief:


“The business must have suffered a significant negative economic impact as a result of the Covid-19 pandemic. The indicators of this are a minimum of a 25% reduction in turnover, customer orders or any other ‘reasonable basis’ for the three months to 30 June 2020, Quarter 2”.  


This means that on the face of it your turnover in July and August is immaterial to qualifying for the scheme.


However, the original rules made reference to having an inability to pay normal wages as a criteria to qualifying. Revenue indicated at the time that if turnover was down 25% and you suffered “significant negative consequences” resulting from the pandemic then you would qualify. The goal posts appear to have shifted for July and August. Revenue have indicated, through speaking with various businesses and through a Tax Institute webinar that they will now be assessing a business’s ability to pay in more detail when assessing whether the business can qualify for the scheme for July and August. They have not been clear on what this means. I’m taking it that if you have sufficient income to cover your normal costs (and any deferred costs) then potentially you will need to come off the scheme or at least decrease the subsidy amount that you are availing of.


Unfortunately, the advice cannot be black and white and so businesses will have to review the guidance themselves or with their advisors to determine whether they can continue to avail of the scheme.


TWSS – Revenue compliance/audit programme


Revenue have already sent out over 1,000 letters to business who have availed of the scheme. It seems a bit unfair that the letters are going out now, as companies are still in the midst of dealing with the pandemic and now, they have to deal with replying to a series of queries about the scheme from Revenue. On top of that the letters state that you have 5 working days to reply, “so that future payments of the TWSS are not delayed or stopped”. This is not type of pressure that businesses need right now. My view is that Revenue are timing these letters to effectively scare some businesses into ceasing with the scheme where those businesses only barely qualified for it in the first place.


The information requested is as follows (taken directly from the letters):

  1. An outline of the nature of your business and principal activities.


  1. A summary of the impact of the COVID-19 restrictions on the turnover of your business (this is the information that you would have considered in deciding that you were eligible for the scheme). Summary should include details such as: if business closed and date of closure; date disruption impacted business; details of the basis used to meet 25% reduction in turnover test i.e. 25% reduction in turnover, customer orders or another basis; number of employees retained/not retained on payroll and reason for non-retention; outline of adjustments in director’s salaries since start of year, if any.


  1. Details of who runs your payroll – you or your agent/payroll provider.


  1. Confirmation that payslips were issued to all employees and directors for the pay periods for which subsidy payments were received from Revenue, and that the payslips displayed the TWSS subsidy amount.


  1. Copies of payslips for the employees / directors named below for (a) the last J9 payslip before          4 May 2020 (Transitional Phase) and (b) the most recent J9 payslip (Operational Phase).


If your business receives one of these letters it is important that they are given due attention as businesses do not want a situation where the TWSS is stopped, even temporarily. Also, a prompt response will reduce the possibility of an audit.


If you have any questions on the above, please do not hesitate to contact us here in Quintas and we will be happy to help.




Dave O’Brien