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Covid-19 Pandemic Supports

Dáil Éireann Debate, Tuesday - 15 June 2021

Tuesday, 15 June 2021

Questions (315)

Patrick Costello

Question:

315. Deputy Patrick Costello asked the Minister for Finance if he will extend the parameters for the criteria that qualify a business as a start up for the purposes of receiving the employment wage subsidy scheme which is currently capped at 37 weeks trading in 2019 for eligibility in 2020 recognising that a business takes at least one year to establish itself such as a business (details supplied); and if he will make a statement on the matter. [30497/21]

View answer

Written answers (Question to Finance)

The Employment Wage Subsidy Scheme (EWSS) was legislated for under the Financial Provisions (Covid-19) (No. 2) Act 2020. On 1 June last, the Government announced an extension of the scheme and full details will be published in forthcoming legislation. The EWSS is an enterprise wide support available to employers of businesses impacted by Covid-19.

The current eligibility criteria for EWSS states that an employer must be able to demonstrate that his or her business will experience a 30% reduction in turnover or orders between 1 July and 31 December 2021, by reference to the corresponding period in 2019, as a result of business disruption caused by the Covid-19 pandemic. Additionally, the employer must have a tax clearance certificate to be eligible for the EWSS and must continue to meet the requirements for tax clearance throughout the scheme. This includes all businesses, including start-ups, where the conditions are satisfied.

For 2020 paydates, the reduction in turnover or customer orders for the period 1 July 2020 to 31 December 2020 is relative to:

- the same period in 2019 where the business was in existence prior to 1 July 2019;

- the date of commencement to 31 December 2019, where the business commenced trading between 1 July and 1 November 2019; or

- the projected turnover or orders for 1 July 2020 to 31 December 2020, where the business commenced trading after 1 November 2019.

For 2021 paydates, the reduction in turnover or customer orders for the period 1 January 2021 to 30 June 2021 is relative to:

- the same period in 2019 where the business was in existence prior to 1 January 2019;

- the date of commencement to 30 June 2019, where the business commenced trading between 1 January and 1 May 2019; or

- the projected turnover or customer orders for 1 January 2021 to 30 June 2021, where the business commenced trading after 1 May 2019.

The legislation prescribes qualifying criteria and relevant timeframes for all businesses that are in start-up mode and there is no reference to, or provision for any “cap at 37 weeks trading in 2019 for eligibility in 2020” in either the legislation or in the Revenue Guidance. In the circumstances outlined in the Deputy’s question, it is unclear how the business which started trading in June 2019 could operate for “39 weeks that year”. The business, in common with all others in a similar position, is required to demonstrate a 30% reduction in turnover or customer orders in the period 1 July to 31 December 2020 versus the same period in 2019 and if it is unable to do so, it is not eligible for the scheme. I am advised that the criteria for start-up businesses provided for in the EWSS legislation has worked effectively for the vast majority and I will be adopting a similar approach for the legislation to implement the extension of the EWSS recently, subject to the approval of the Oireachtas.

I should also point out that the EWSS legislative provisions require that immediately at the end of each month, from August 2020 onwards, each employer availing of the scheme must carry out a self-review of its business circumstances and if it is manifest to the employer that it no longer meets the eligibility test for qualification for the scheme, then the business must immediately cease claiming EWSS payments.

The administration of the EWSS is placed under the care and management of Revenue. Revenue’s focus on the EWSS in the early stages was concentrated on getting the scheme up and running and ensuring that all employers who are eligible for subsidy payments received the payments quickly. Revenue is now operating a real-time compliance programme to ensure the qualifying criteria contained in Section 28B of the Emergency Measures in the Public Interest (Covid-19) Act 2020 are met. This includes identifying employers who should be excluding themselves from the scheme, based on their self-review of the qualifying criteria, but have failed to do so.

Where Revenue identifies that the subsidy paid to an employer was incorrectly claimed, it must then be repaid. However, the employer has the right to appeal Revenue’s determination that it was not eligible to avail of the scheme to the independent Tax Appeals Commission (TAC). The appeal process requires Revenue to assess the subsidy amount owed as a ‘relevant tax’ after which the employer has 30 days to lodge an appeal with the TAC.

Where the employer accepts that the subsidy amount was incorrectly claimed but cannot afford to repay it in a single payment then Revenue may agree to a phased payment arrangement over an extended timeframe. The employer may also be eligible to temporarily ‘park’ the debt under the Debt Warehousing scheme, providing the business meets the overall eligibility criteria for that scheme.

Finally, guidelines on the operation of the EWSS including comprehensive information on employer eligibility and supporting proofs is available on the Revenue website. Information regarding the Debt Warehousing scheme is also available on the Revenue website.

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