A summary of the Covid-19 supports available.

Businesses all over Ireland have been profoundly impacted since the Covid-19 virus landed on Irish shores. With reduced footfall, reduced profits and reduced disposable income, businesses in Ireland have been undoubtedly feeling the pinch. It is vital that companies continue to manage and mitigate the disruption being caused by Covid-19 where possible. To do so, you might have considered availing of a government incentive.

Similarly, to last year, this year there are a number of governments supports on offer to help businesses weather the current economic storm. At Cronin and Co., we appreciate that the list of government incentives can get confusing due to technical jargon and specific criteria, so we are here to provide some expert advice on several Covid-19 supports.

Government supports being provided for employers and staff:

With the ongoing impact of Covid-19 taking its toll on employers, many businesses are availing of supports for employees.

1.The employment wage subsidy scheme: (EWSS)

The employment wage subsidy scheme was brought into effect on the 1^st of September 2020 in replacement of the temporary wage subsidy scheme which ended on August 31^st 2020.

The EWSS is an economy wide enterprise support that places its primary focus on business eligibility.

The EWSS scheme provides a flat-rate subsidy to employers who qualify based on the numbers of eligible employees on the employer’s payroll.

The most notable features to remember about the EWSS if you are an employer are the following:

1.Employers must hold a valid tax clearance to avail of the EWSS and they must continue to maintain this tax clearance for the entire duration of the scheme.

2.Seasonal staff and new hires are eligible for the EWSS. While there are exceptions, claims can be backdated to July 2020.

3.A reduced rate of employers PRSI of 0.5% is charged on wages paid which are eligible for the subsidy payment.

4.The subsidy is based on an employee’s gross weekly wage including notional pay before deductions and excluding non-taxable benefits.

2.New eligibility criteria to claim EWSS from 1 January 2021.

New changes have been made to the EWSS scheme since the first of January 2021. The EWSS will now be based on an employer demonstrating that due to Covid-19, at least a 30% reduction in their turnover or orders will occur in the period from 1 January 2021 to 30 June 2021 by reference to the period from 1 January 2021 to 30 June 2021.

It’s important to note however, that childcare businesses registered in accordance with Section 58C of the Child Care Act 1991, are not required to meet the reduction in turnover or customers orders test.

Employers are still required to undertake a review on the last day of every month to ensure they continue to meet the eligibility criteria.

Extension of existing EWSS subsidy rates:

The minister for Finance Pashcal O’ Donoghue has confirmed that the existing Employment Wage Subsidy Scheme (EWSS) rates will be extended until 31 March 2021. The EWSS subsidy rates which are going to prevail until 31 March 2021 are as follows.

To avail of the EWSS, you must self-declare to Revenue that you have experienced negative economic disruption due to Covid-19 with a minimum of a 30% decline in turnover or customer orders. In order to help you prepare everything you need ahead of applying for the EWSS, why not contact Cronin and Co? Our expert accountants can help your business and advise you on the grants that are applicable to your circumstances.

3.CRSS.

The CRSS is a recently introduced support for eligible businesses significantly impacted by restrictions introduced by the government under public health regulations to combat the effects of the COVID-19 pandemic.

The key features of the scheme are:

1.CRSS is designed to assist those businesses whose trade has been significantly impacted or temporarily closed as a result of the restrictions as set out in the government’s ‘Living with COVID-19’ Plan.

2.The scheme will generally operate when Level 3 or higher is in place and will cease when restrictions are lifted.

3.The scheme will apply to businesses where government restrictions prohibit or reduce access by customers to their business premises. Where a qualifying person carries on more than one eligible business activity from separate business premises, a claim in respect of each activity can be made.

4.To qualify under the scheme, a business must be able to demonstrate that, because of the COVID-19 restrictions, the turnover of the business in the period for which the restrictions are in operation, and for which a claim is made, will be no more than 25% of an amount equal to the average weekly turnover of the business in 2019 (or average weekly turnover in 2020 in the case of a new business) multiplied by the number of weeks in the period for which a claim is made.

5.A qualifying person will be able to make a claim to Revenue under the CRSS for a cash payment to be known as an “Advance Credit for Trading Expenses”. This payment will be equal to 10% of their average weekly turnover in 2019 up to €20,000 and 5% thereafter, subject to a maximum weekly payment of €5,000, for each week that their business is affected by the COVID-19 restrictions.

The scheme will operate from 13 October 2020 to 31 March 2021 and there is provision for the Minister for Finance to vary aspects of the scheme.

To register for CRSS, the eligible business must:

• Make a declaration that it meets the eligibility criteria for the scheme
• Have tax clearance
• Provide certain information in relation to the business activity, the business premises and previous turnover details.

The relevant turnover details provided as part of the registration process must be consistent with the information included in the relevant tax returns of the business and will be validated against the information already held on Revenue systems.

Revenue has published an overview of the scheme with some detailed examples, together with guidance on the operation of the scheme which can be found here;

Guidelines on the CRSS 

4.Tax Debt Warehousing Scheme.

The Debt Warehousing Scheme allows VAT and PAYE (Employer) debts incurred by businesses during the period of restricted trading caused by Covid-19 to be ‘parked’ on an interest free basis for 12 months following the resumption of trading.  At the end of the 12-month interest free period, the warehoused debt may be paid in full without incurring an interest charge or paid through a phased payment arrangement at a significantly reduced interest rate of 3% per annum. This compares to the standard rate of 10% per annum that would otherwise apply to such debts.

Information booklet on debt warehousing and reduced rate of interest for outstanding ‘non-COVID-19’ debts (revenue.ie)

5.Commercial rates waiver.

The Government agreed with local authorities that, with limited exceptions, all businesses will be granted a waiver of commercial rates to 31 December 2020. However further relief will apply for affected sectors for the first three months of 2021. This measure will be implemented by each local authority in its own area.

A 100% waiver will be applied to all businesses, for a three-month period to end March 2021, with a number of categories excluded. The rationale for the exclusion of these ratepayers is that their operations were not as heavily impacted by the pandemic. There are some categories of businesses which were included in the 2020 Waiver Scheme but are not excluded in the new scheme. You can read more about these exclusions on the revenue website.

How can Cronin and Co help?

Cronin & Co have a team of experienced professionals who offer an extensive range of financial services. Cronin & Co take a hands on-approach to all their work and are in the best position to advise you on the relevant Covid-19 supports. We believe in small businesses and we know the struggles of being self-employed. If you are looking for advice and direction about the government supports, you may eligible for then why not reach out?

If you would like expert advice or help regarding this issue, then you should contact the office at Cronin and Co. Email her at [email protected]