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TWSS Reconciliation

Update: Reconciliation of the TWSS.

The TWSS or the temporary wage subsidy scheme operated from the 26th of March to the 31st of August 2020. This government support offered vital financial assistance to Irish employers nationwide during the initial months of Covid-19. Reconciliation is the final phase in the TWSS programme. This phase will aim to ensure that there is an accurate reconciliation between the subsidy amounts paid by Revenue to employers and subsidy amounts that were actually due to employers for relevant employees .

Employers who participated in the scheme should now have a notification in their Revenue Online Service inbox notifying them of this information. Your reconciliation information on the ROS will include the following:

  1. The total TWSS amount paid to you by the Revenue.
  2. The total TWSS amount payable in respect of your employees.
  3. The total TWSS paid by you to employees according to the subsidy paid data you have provided.Details of any difference between these amounts (the reconciliation balance).

The reconciliation balance is based on the information that you originally provided to Revenue. Employers were required to provide up to date and accurate details of the subsidy actually paid to their employees. If your data is not accurately reported or not reported at all it can result in the following circumstances:

  1. An incorrect reconciliation balance for you.
  2. Incorrect end of year tax liabilities for your employees.

During the reconciliation period, you can review and correct any misalignment to the subsidy data you submitted. Any changes made by you will be reflected instantly on the ROS. It is pivotal that you report every subsidy payment you have made to your employees. If you fail to report some or all the subsidy payments, Revenue will recoup the unreported subsidy amounts from you.

Certain employers will have a reconciliation balance to repay to Revenue. Once employers accept the reconciliation balance the TWSS liability will be automatically warehoused for employers who are:

  1. Managed by the Revenue’s Business or Personal Division.
  2. Are already availing of debt warehousing.

What is debt warehousing?

The Government has legislated to allow for debt associated with the COVID-19 crisis to be deferred or ‘warehoused’. The debt warehousing scheme allows for the deferral of unpaid VAT and PAYE debts arising from the pandemic for a period of 12 months after a business resumes trading (in accordance with the government guidelines). The debts can then be addressed by way of a phased payment arrangement at a lower interest rate of 3% per annum which represents a significant reduction from the standard rate of 8% or 10% per annum depending on the particular tax owed.

The period covered by the debt warehousing scheme is the period in which the business was unable to trade due to the Covid-19 pandemic, this scheme will include two months after the business has resumed trading.

It is important to note that businesses with COVID-19 related tax debts which are warehoused, or non-COVID-19 debts which are included in a phased payment arrangement (PPA), qualify for tax clearance, despite having these debts. Accordingly, businesses with warehoused debts or debts covered by a PPA can obtain Tax Clearance and, provided all other conditions are met, can participate in the EWSS.

Items to note:

Employers now have until 30 June 2021 to review their TWSS reconciliation information, provide any outstanding information in relation to subsidies paid to employees, and accept the reconciliation balance on ROS.

A small number of employers who participated in TWSS have not yet been provided with their reconciliation information. These are mainly employers with whom Revenue has open queries related to their participation in the scheme. There are also some cases where Revenue is working with employers to finalise details of their subsidy amounts.

It is important to monitor the My Enquiries section of the ROS for an update or correspondence from the Revenue.

For informed advice on Government supports available during the Covid-19 pandemic, contact Cronin and Co. We have a team of professionals who are updated and skilled in this area and would be happy to help with your enquiries, contact [email protected] .