Dáil Éireann Debate, Wednesday - 21 June 2023
72. Deputy Bernard J. Durkan asked the Minister for Finance the grounds upon which an employee (details supplied) whose company availed of TWSS in 2020 and who received no increase in their net pay during the same period their company availed of TWSS is now considered liable for tax on that period by the Revenue Commissioners; if this case can be re-examined as a matter of urgency; and if he will make a statement on the matter. [30093/23]
View answerThe Temporary Wage Subsidy Scheme (TWSS) was introduced on 26 March 2020. It was legislated for in Section 28 of the Emergency Measure in the Public Interest (Covid-19) Act 2020 and was an emergency measure to deal with the impact of the Covid-19 pandemic on the economy. As the Deputy will be aware in order to maximise the financial support provided to recipients, tax on TWSS payments was not collected in real-time through the PAYE system and instead the liability for the 2020 tax year was determined at the end of the year by Revenue through the regular ‘end year review’ process.
I am advised by Revenue that the person concerned received payments under the TWSS from April – June 2020 and their employer also ‘topped up’ their earnings during that period. The ‘topped up’ amounts were taxed in real-time, with their full tax credits and rate bands applied to this income during the year, while the TWSS payments were taxed at year-end. As the tax credit and rate band allocations of the person concerned had been used on their salary during the year, they were not available for use at year end against their TWSS income, which resulted in a tax liability in respect of the TWSS payments.
Following the submission of an income tax return for tax year 2020 by the person concerned, Revenue confirm they have re-examined the case and are satisfied the tax liability is correct for the 2020 tax period. As the tax liability is now finalised, the individual concerned can opt to pay any income tax and USC liability fully or partially through the Payments/Repayments facility in myAccount.
However, should they not opt to pay fully or partially, the outstanding tax liability will be collected by reducing their tax credits over a four year period , interest free commencing in January 2024.
I am further advised that Revenue did facilitate employers who wished to pay some, or all, of the employees' 2020 tax liabilities which arose due to the TWSS. Initially this facility was limited to payments made by employers on behalf of their employees up to end June 2021. The concession was extended to run until the end of September 2021 to ensure employers have the fullest information available following the TWSS Reconciliation process. Employers wishing to avail of this facility engaged directly with employees and agreed the value and method to pay the liability involved. Revenue did not apply benefit-in-kind rules to these payments employers make on behalf of their employees.
