As many employers may already be aware, Revenue published guidance earlier in the year to provide for a concession/exemption from the charge to tax as a Benefit-in-Kind (‘BIK’) where an employer who availed of TWSS wished to settle any 2020 end of year tax liabilities arising for their employees. A payment of tax on behalf of the employee would be permitted up to the amount of the employee’s Preliminary End of Year Statement without the need to consider a charge to BIK. A copy of our related article can be found here.
Revenue have now published earlier this week detail of updated guidance notes on the operation of this relief to clarify certain matters, a copy of such guidance being available at the following link. A summary of the key points to note are as follows:
- The concession/exemption can be applicable to cases where an employee may also be a self-assessed taxpayer or in cases of joint assessment if the employee’s spouse is a self-assessed taxpayer for Income Tax purposes
- The concession/exemption can be applicable to cases where an employee is a Proprietary Director of the company, provided the company as the employer pays TWSS related liabilities for all employees
- Where the payment is made by the employer such that it does not settle the TWSS liability in full, the balance will still be collected over a period of four years starting in January 2022 once the employee is subject to tax through the PAYE system and is not subject to self-assessment.
- The time frame by which any employer needs to settle such liabilities on behalf of employees has been extended to 30 September 2021 (having previously been due to expire on 30 June 2021)
The existence of the concession, further guidance and the extension of the time frame is welcome as it provides employers with an opportunity to assist their employees with regard to the payment of such liabilities, with additional time to assess the context and extent to which this is possible subject to the ongoing lifting of restrictions and increase in economic activity.
We trust the details above to be of benefit and we are happy to assist in reviewing any aspect with you in further detail, please contact please contact our team on (01) 6440100 / (090) 6480600:
- Mairead O'Grady, Tax Partner
- Patrick Fannon, Senior Tax Manager