The various COVID-19 support schemes have been a lifeline for many retail businesses badly hit by the pandemic and have been instrumental in supporting job retention amid difficult trading conditions. Now that these schemes are coming to an end, Claire Davey, Head of PAYE & Personal Tax Compliance, explains the implications below.

End of the EWSS

The Employment Wage Subsidy Scheme (EWSS) will, for the majority of businesses, cease operation the end of April 2022. Given this finally marks a return to normality for payroll operators, now is an ideal time for retailers to take stock and begin to prepare for life after the scheme. Revenue will continue to carry out their ongoing EWSS compliance checks after the scheme has ended, so it will be important for retailers to have a comprehensive, robust file in place to support their eligibility under the scheme.  

Further, a number of temporary employment tax concessions introduced at the early stages of the pandemic have recently been withdrawn and so, it will now be important for Irish retailers to familiarise themselves with these changes to ensure they are not relying on COVID-19 concessions which are no longer available in practice. 

Tax debt warehousing

Key supports introduced to deal with the severe impact of the pandemic at a time where retailers’ cash reserves were under severe pressure included the tax debt warehousing scheme. This arrangement allowed businesses to park certain unpaid PAYE and VAT tax debts that arose during the period when a business’ ability to trade was impacted by COVID-19 related restrictions for a period of 12 months after a business resumed trading.

Essentially, with regards to the repayment of warehoused tax debts, zero interest will accrue until the end of 2022 (or until 30 April 2023 for businesses impacted by the public health restrictions introduced in December 2021). Following the expiry of the zero interest period, a rate of 3% per annum applies thereafter.

Following a recent Revenue update, retailers who are still availing of the scheme are advised that Revenue will shortly be contacting them to remind them that their warehoused tax debt remains unpaid on an interest-free basis until the end of 2022 or 30 April 2023 as applicable. Revenue will also remind businesses, they can at any time prior to this, repay some or all of their warehoused debt. Recent Revenue statistics show that many businesses have already made some repayments in this regard.

Filing tax returns

Revenue will also be reminding employers that their obligations under the terms and conditions of the scheme includes the filing of current tax returns as they fall due and payment of associated tax liabilities at the appropriate time.

Businesses who fail to meet these conditions will no longer be eligible to participate in the scheme with immediate effect. In this eventuality, the tax debts of the business fall due for payment immediately, and the significantly reduced 0% and 3% rates for warehoused debts will no longer be available.

Retailers will also be advised that all outstanding tax returns need to be filed before 30 April 2022 or they risk losing the benefits provided under the scheme.

Retailers facing difficulty

In light of this update, retailers who continue to experience difficulties in meeting their filing and payment obligations, are encouraged to contact Revenue at the earliest opportunity to resolve these difficulties and discuss the possibility of putting in place a tailored payment arrangement over an agreed timeframe.

This article originally appeared in Retail Times Magazine and is reproduced here with their kind permission.

Get in touch

If you have any queries on the cessation of the COVID support schemes mentioned above, please contact Claire Davey, Head of PAYE & Personal Tax Compliance. We'd be delighted to hear from you.

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