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EWSS Updated Guidelines, CRSS Scheme & e-Working

EWSS Updated Guidelines, CRSS Scheme & e-Working

Posted on 28th - October - 2020

Revenue have issued further guidance in relation to EWSS

There are several additions and clarifications since the last guidelines issued on 8 October. Significant amendments include:

  • Changes to subsidy rates for pay dates between 20 October 2020 and 31 January 2021 inclusive.
  • Changes to the subsidy payment frequency.

The first payment for November will be processed on 9 November in respect of November payroll submissions made prior to then, and thereafter future payments will be made within two working days of receipt of the payroll submissions.

Further clarifications include:

  • If eligible employers choose to retain eligible employees on the payroll while the business is wholly or partially closed, EWSS can still be claimed in respect of wage payments made to those employees.

There is no legislative requirement that employees are actively working to be eligible for the EWSS.

Continued Review of Employer Eligibility required

Employers must undertake a review of the six month period on the last day of every month (other than July 2020 and the final month of the scheme) to be satisfied whether they continue to meet the eligibility criteria and to take the necessary action of withdrawing from the scheme where they do not. This review must be undertaken on a rolling basis measuring the actual and projected business performance over the specified period (July to December 2020).

Revenues updated Guidelines on the operation of EWSS can be found here:

https://www.revenue.ie/en/employing-people/documents/ewss/ewss-guidelines.pdf

Details of Covid Restrictions Support Scheme (CRSS)

The Covid Restrictions Support Scheme (CRSS) announced on Budget day provides targeted support to businesses that are forced to close temporarily or operate at a significantly reduced level because of COVID-19 public health restrictions that either prohibit, or significantly restrict, customers from accessing their business premises. Generally, this refers to COVID-19 restrictions at Level 3, 4 or 5 but, in the case of certain businesses could apply at lower level restrictions. The scheme is intended to be in addition to the supports provided to employers under EWSS.

The scheme will run from 13 October 2020 until 31 March 2021.

The scheme will operate on a self-assessment basis and is conditional on the taxpayer continuing to file all tax returns on time, holding a current tax clearance certificate and on the intention to resume the business when the restrictions are lifted. Details of taxpayers availing of the scheme will be published on the Revenue website at a later time.

Qualifying for the scheme

Where as a result of the restrictions, a business has been required to temporarily shut their premises or operate at significantly reduced levels, with the result that turnover for that period will be no more than 25% of the average weekly turnover (i.e. a 75% drop in turnover) for a period equal to the same number of weeks in 2019 (or using 2020 turnover figures for new businesses), that business will qualify under the scheme.

Application for the scheme

Qualifying taxpayers will be able to log on to ROS and register for CRSS as soon as possible. The registration process will include providing details such as the location of the business and average weekly turnover for 2019. The claims process will be available from mid-November. Once they have registered, a taxpayer will be able to make a claim for the period their business is restricted from operating. Revenue will publish guidelines on the registration process and on the operation of the scheme in due course.

Relief available

The relief will operate as a cash payment equal to 10% of the average weekly value of the 2019 business’s turnover up to €20,000 and 5% thereafter, subject to a maximum weekly payment of €5,000, for the same number of weeks as the restricted period. The payment is known as an “Advanced Credit for Trading Expenses” and is taken into account when computing the profits and gains of the business under Case I of Schedule D as a reduction against deductible trading expenses. However, the receipt of the payment will only result in additional tax where the business is in a profitable position for the chargeable period.

Further details on the scheme can be found at:

https://www.revenue.ie/en/corporate/press-office/budget-information/2021/crss-overview-and-examples.pdf

Remotely working from home (eWorking)

e-Working includes:

  • working at home either on a full-time or part-time basis
  • working some of the time at home and the remainder in the office

Conditions for an Employee to Qualify as an e-Worker

In order for an employee to qualify as an e-worker, for the purposes of claiming income tax relief for expenses incurred in working from home, the following conditions must be met:

  • There must be a formal agreement in place between the employer and the employee under which the employee is required to work from home
  • An employee must be required to perform substantive duties of the employment at home; and
  • An employee must be required to work for substantial periods at home

Treatment of Expenses Incurred by an e-Worker

It is acknowledged that e-workers will incur certain expenditure in the performance of the duties of their employment when working remotely or when working from home. These expense items such as additional heating, electricity and broadband costs are allowed as a tax deduction for income tax purposes.

However, it should be noted that capital items such as laptops, computers, office equipment and office furniture purchased by an employee are not allowable deductions.

Employer makes payment of €3.20 per day for e-worker expenses

Revenue allow an employer to make payments of up to €3.20 per day tax free to employees who satisfy the conditions for the relief. Amounts in excess of €3.20 paid by the employer should be subjected to income tax, PRSI and USC as normal.

Employer does not make payment towards e-worker expenses

Where an employer does not pay €3.20 per day to an e-worker, the employee is not entitled to claim a round sum of €3.20 per day. Where additional expenses are incurred, the employee is entitled to claim the following:

  • Electricity and heat – 10% of cost of electricity and heat apportioned on the basis of the number of days worked from home over the year
  • Broadband – 30% of the cost of broadband apportioned on the basis of the number of days worked from home over the year. This concession, commencing in tax year 2020, will apply for the duration of the pandemic

To claim an allowable e-working expense, the employee must have incurred the cost and it is the responsibility of the employee to retain proof of payment. If an expense is shared between two or more people, the cost can be apportioned based on the amount paid by each individual.

e-Working and Covid-19 Concessions

Where the Government recommends that employers allow their employees to work from home to support the national public health objectives, as in the case of Covid19, the treatment of expenses as set out in paragraph above i.e. “employer does not make payments towards e-worker expenses”.

Furthermore, existing e-working guidance provides a tax deduction for e-workers for vouched expenditure incurred for electricity and heat. Revenue is willing to accept that 30% of the cost of broadband, apportioned on the basis of the number of days worked from home over the year, may also be claimed. This concession, commencing in the tax year 2020, will apply for the duration of the pandemic.

 Making a claim

e-Working expenses can be claimed by completing an Income Tax return. An individual can complete this form on the Revenue website as follows:

  • sign into myAccount
  • click on ‘Review your tax’ link in PAYE Services
  • select the Income Tax return for the relevant tax year
  • click ‘Your Job’
  • select ‘Remote Working (e-Working) Expenses’ in the ‘Tax Credits and Reliefs’ page and insert the amount of expense at the ‘Amount Claimed’ section.

Further information can be found at:

https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-05/05-02-13.pdf

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