The Revenue Commissioners have announced the third and final formal stage of the Temporary Wage Subsidy Scheme (TWSS): the Reconciliation process. This follows the cessation of the TWSS on 31 August 2020. The purpose of the Reconciliation phase is three fold:
In addition to reporting TWSS details to Revenue, employers will be required to report any payments delivered to employees under the Employer Refund Scheme (the predecessor to the TWSS and which ran from 12 March to 25 March 2020).
The Reconciliation process will operate in two stages:
Failure by an employer to complete stage 1 by 31 October 2020 may result in Revenue seeking to recoup the total TWSS paid to that employer under the Scheme, together with interest.
Revenue will undertake the reconciliation based on the data provided to it. Revenue will firstly calculate the correct subsidy payable for each employee for each pay period. Revenue will then compare this with the subsidy amounts paid to the employer and issue a Statement of Account to the employer. Any under or over subsidy refund will be paid or repaid to or by the employer.
Revenue have indicated that as part of the reconciliation process, they will make available to the employer a detailed CSV file of the TWSS reconciliation details in Revenue's systems. The employer can use this information to assist them in reconciling their own records.
Alternatively, the employer can request a reconciliation calculation from Revenue. Such a reconciliation will take into account:
Revenue have confirmed that:
Revenue has not defined what is a small discrepancy for the purposes of the reconciliation and will provide further guidance on this matter in due course.
Revenue have confirmed that they will issue a 'Preliminary end-of-year statement' to all employees who were in receipt of TWSS and PUP payments. This will reflect the income tax and USC due on these payments.
Revenue have also indicated that the employees can settle the taxes in the following manner:
There are a number of things that an employer need to do in the coming weeks:
Finally it should also be noted that Revenue still reserves the right to conduct further detailed reviews outside of the reconciliation process, including reviews of eligibility to the Scheme and this is something that may be timely to review, if not already undertaken. If you have any concerns, we can assist you in undertaking a TWSS health check.
Should you have any queries regarding the above or indeed any aspect of the TWSS, please reach out to your usual PwC contact or any member of the TWSS team.