Minister Humphreys announces a range of financial support for businesses impacted by COVID-19.
The escalation of the Covid-19 crisis in Ireland and around the world is almost certain to continue to effect Irish businesses. Against this backdrop, the Minister of Business, Enterprise and Innovation, Heather Humphreys TD, has announced a range of financial supports for eligible companies who are experiencing direct adverse economic effects from Covid-19.
The Tax team at RSM Ireland are here to support you and your business each step of the way by offering cost-effective support, professional advice and an in-depth knowledge of the reliefs available to you.
Recently announced financial support for Irish companies include:
- Working Capital Scheme - A €200m Strategic Banking Corporation of Ireland (SBCI) Working Capital scheme for eligible businesses impacted by COVID-19. Loans of up to €1.5m will be available at reduced rates, with up to the first €500,000 unsecured.
- Enterprise Supports Package - A €200m Package for Enterprise Supports including a Rescue and Restructuring Scheme available through Enterprise Ireland for vulnerable but viable firms that need to restructure or transform their business.
- Increased Maximum Loan Amounts through MicroFinance Ireland – increased from €25,000 to €50,000 to specifically deal with exceptional circumstances that micro-enterprises – (sole traders and firms with up to 9 employees) - are facing.
- Local Enterprise Office vouchers – will be offered in every county. Vouchers will be from €2,500 up to €10,000 (with 50:50 match funding) to support business continuity preparedness, innovation and productivity.
- Support for firms experiencing trading difficulties and short-term shocks:
- First Responder support service - The Department of Employment Affairs and Social Protection and the Department of Business, Enterprise and Innovation will provide support service through the Intreo Offices and development agencies, Enterprise Ireland and IDA Ireland in each region. This will provide tailored supports to avoid mass lay-offs and buying time for firms to work through the short-term disruptions.
- Short Term Work Support - Firms that need to reduce hours or days worked can avail of the Department of Employment Affairs and Social Protection Short Term Work Support by contacting their local Intreo Office.
- Grant supports - A full range of Enterprise Ireland, IDA Ireland, Local Enterprise Office and Údarás na Gaeltachta grant supports will be available to firms to help with strategies to innovate, diversify markets and supply chains and to improve competitiveness.
- Credit Guarantee Scheme through Pillar Banks –will be available to COVID-19 impacted firms through the Pillar Banks. Loans will be available of up to €1m at terms of up to 7 years.
- Finance in Focus grant – a grant of €7,200 will be available to Enterprise Ireland and Údarás na Gaeltachta clients that want to access consultancy support to undertake immediate finance reviews.
- Annual Filing Obligations for companies - the Registrar of Companies has decided that all annual returns due to be filed by any Company now and up to 30th June 2020 will be deemed to have been filed on time if all elements of the annual return are completed and filed by that date.
- Be prepared grant - this grant, which offers up to €5,000 in support, is designed for Enterprise Ireland clients who would benefit from further research and external expertise in examining their exposure to Covid-19 and exploring ways of addressing this.
The following specific measures have been introduced by the Irish tax authorities:
COVID Employer Refund Scheme on behalf of DEASP
- For workers who are being temporarily laid off as a result of the COVID-19 (Coronavirus) pandemic, a new scheme has been launched by Revenue on behalf of the Department of Employment Affairs and Social Protection (DEASP). This will allow employers to make a special support payment of €203 per week to their employees through their normal payroll process.
- Employers are encouraged to facilitate employees by operating the scheme, ensuring a speedy payment process for employees and minimising the hardship for employees who are temporarily laid off. The weekly amount of €203 paid to employees under the scheme is not subject to tax, USC or PRSI. The scheme can be operated by employers that keep their staff on payroll during the period of temporary lay-off, and for any employee for whom a payroll submission was made in the period from 1 February 2020 to 15 March 2020. Employers or their payroll agent can apply to operate the scheme quickly and easily via Revenue’s Online Service (ROS).
- Where employees have already been laid off and their employer has ceased their employment, they can apply directly to DEASP for the payment.
- Employers will be reimbursed for amounts paid to employees and notified to Revenue via the payroll process. The reimbursement will be transferred into the employer’s bank account by Revenue, generally on the next banking day following the submission of the payroll details.
Tax measures for cash-flow difficulties and other supports
- Revenue have introduced new measures for SME* companies experiencing cash flow difficulties. Key among these measures are the following;
- Application of Interest: the application of interest on late payments is suspended for January/February VAT and both February and March PAYE (Employers) liabilities.
- Debt Enforcement: All debt enforcement activity is suspended until further notice.
- Tax Clearance: current tax clearance status will remain in place for all businesses over the coming months.
- Revenue have stated that businesses experiencing temporary cash flow difficulties should continue to send in tax returns on time.
- For non-SME companies experiencing cash flow difficulties, Revenue have advised companies to contact the Collector General’s office on + 353 1 7383663, or alternatively, to engage directly with their relevant Revenue district.
- Revenue have also announced that critical pharmaceutical products and medicines will be given a Customs ‘green routing’ to facilitate uninterrupted importation and supply.
*An SME is a business with turnover of less than €3 million who is not dealt with by either Revenue’s Large Cases Division or Medium Enterprises Division. SME’s are managed from both a service and compliance standpoint by Revenue’s Business Division.
It is somewhat disappointing that the definition for an SME has been limited to companies with a turnover of less than €3 million. Many companies with larger turnover and who are considered SME’s under general tax legislation are not in a position to avail of this deferral whilst they are impacted equally as hard as smaller businesses. This event is a whole of economy event impacting on large and small companies and we strongly believe the Government and its agencies need to support business in this extremely challenging time.
How RSM can help
Our tax team work with our clients during times of major disruption to business as usual, minimising taxation to improve their financial position. We understand the consequences of taxation and take a holistic and commercial view and offer practical and direct advice. Our approach can be summarised as:
- risk assessment;
- consider options – “sense checking”;
- maximise resources and wealth; and
- planning to facilitate decision making
- Find out more about how we can assist your business with continuity planning with practical tax advice.
If you have any questions or require further information or assistance with the potential impacts of the coronavirus, please contact our Business Continuity team today.
