Businesses that used the Temporary Wage Subsidy Scheme (TWSS) last year have until the end of June to review Revenue’s forthcoming overpayment calculations and formally
accept the amounts they will have to return.
Under a reconciliation process which is beginning in the middle of next month, Revenue is calculating the difference between amounts refunded to employers under the scheme and the amounts they actually paid to their employees.
The difference will be added to the tax bills of businesses that owe money from overpayments, or returned to those companies that were underpaid by Revenue during the operation of the scheme.
Companies that have met tax filing deadlines for 2020 will be eligible to put any resulting debts into Revenue’s expanded tax warehousing scheme.
According to Revenue guidance, these overpayments can be deferred for a 12-month period and then repaid at a reduced interest charge of 3pc on the same basis as VAT/PAYE debts under the Revenue’s debt warehousing scheme.
Nearly all the companies that used TWSS have submitted payslips as part of the process and many have already paid back excess subsidies.
Employer representative bodies reacted cautiously to the news that Revenue was proceeding with the reconciliation process despite the enormous financial strain many businesses remain under during the ongoing lockdown.
Adrian Cummins, chief executive of the Restaurants Association of Ireland, said any proposed repayment process should be postponed until businesses have more clarity on their future viability.
“Revenue need to take into consideration that hospitality is closed and will remain closed until mid-summer at the earliest,” he said. “Any reconciliation process will need to take account of cash flow for businesses and when the business becomes a viable functioning entity. Only at the stage can a repayment process be put in place.”
The reconciliation process is running alongside a compliance sweep on employers that used the scheme between March and August
Hundreds of companies are under review for suspected irregularities in their use of the scheme or for claiming funds while not meeting eligibility criteria.