Jobs at risk as employers are shut out of Covid-19 wage subsidy

Missed tax deadline could prove fatal for businesses damaged by shutdown

Businesses face closure because they have been locked out of the Government's temporary wage subsidy, advisers say. The move will mean job losses for hundreds, perhaps thousands, of staff that the scheme was designed to keep on company payrolls.

The employers missed a tax filing deadline that fell 10 days before the emergency support was ever announced by Minister for Finance Paschal Donohoe. That meant there was no opportunity to ensure they were in compliance with the rules of the scheme.

And although the filing deadline recurs each month, by missing the March 15th date the employers have locked themselves out of the scheme regardless of how many months it remains in place.

The temporary wage subsidy that pays workers up to 85 per cent of their take home pay, or up to €410 a week, in an effort to ensure that companies do not have to let workers go during what Ministers hope will be a relatively short-term business crisis.


Mr Donohoe said last week that the aim of the scheme was "to maximise staff retention and firm viability by maintaining the link between the employer and employee". However, accountants argue that the Revenue Commissioner's hardline approach will force companies to let staff go and possibly close down entirely.

A significant number of companies have appealed the decision to refuse them access to the scheme, but all have been rejected by Revenue. According to accountants who have been in touch with the Revenue, its position is that its hands are tied by the specific provisions in the law that were put in place to guard against abuse of the subsidy.

Ben Lewis, an accountant in practice in Dublin, said the disqualification of companies from the scheme "appears to be very heavy-handed".

“Of course the return should have been filed on time, but if they can prove that the February payroll was the same as January then it seems very unfair that they should not be allowed to access the scheme just because of a late return.”

He said he had at least one client that had been relying on the scheme to keep going. They will lose out on a six-figure subsidy “and now it looks as though they may have to consider liquidation”, said Mr Lewis of Lewis & Co.

Amending filings

Brian Carrig, a partner at Knowles O'Dowd Carrig, says some companies that did file on time will also lose out because they later amended those filings. He said amending filings was not unusual, and could occur for any number of reasons.

When the amendments were made, he said, the companies could not have known it would disqualify them as the wage subsidy rules were only announced later.

“The whole idea of the scheme was to keep as many employees off the live register but by refusing the subsidy they are pushing employees off the employer’s payroll and on to the register. This company will probably have to lay off all his employees and close the business.

“This is cost neutral for the Government because now rather than paying the employer the subsidy they are paying the employee social welfare – but the company will be gone.”

In a statement the department said on Wednesday night said that it was aware of “employers encountering issues around the payroll filing date”.

However, it said the filing deadlines were “essential requirements of the temporary wage subsidy scheme, and are necessary critical safeguards against abuse and exploitation of the scheme”.

Dominic Coyle

Dominic Coyle

Dominic Coyle is Deputy Business Editor of The Irish Times