Employer offering to pay Covid tax but Revenue can’t give me the bill
Q&A: Dominic Coyle answers your personal finance questions
‘Revenue is saying that my husband needs to submit accounts, in order for me to get a statement in relation to my employment.’ Photograph: Getty Images/iStockphoto
My husband is self-employed and I am a PAYE worker. Revenue will not issue me my 2020 preliminary statement.
My company wants to pay the liability I may have as a result of TWSS [Temporary Covid-19 Wage Subsidy Scheme] in relation to my employment. I am a PAYE worker and the Government said all PAYE workers would get a preliminary statement of liabilities by January 15th.
Revenue is saying that my husband needs to submit accounts, in order for me to get a statement in relation to my employment. However, I don’t see why my husband should take on my liabilities when my company is offering to cover it as they drew TWSS.
I am up against a deadline of February 28th though as this is the date my company has given for staff to avail of the opportunity for them to pay the liability.
How hard can it be for them to produce for me a statement of my liabilities in relation to 2020 for my employment.
I have put my queries up on Revenue’s MyAccount and phoned Revenue where they have been giving me the runaround since mid January.
Ms G.F., email
It clearly has been a most frustrating time for you. You may have a tax liability and you are in the fortunate position that your company is offering to pay any money you may owe Revenue. But you need the preliminary statement of liability to find out what is owing and you simply cannot get one.
I can see why you might be at your wits’ end, not least as you have gone through the protocols by using your MyAccount to contact Revenue with, at the time we spoke, no response and the clock ticking down.
The good news, I hope, is that we were able to get someone to contact you and they seemed confident that a solution could be found before your deadline – which was effectively last Friday as the last working day before February 28th. But you cannot be the only person who has found themselves in this position.
So much of this appears to be down to communication and the extraordinary circumstances of last year.
Put simply, PAYE workers do not generally have tax liabilities at year-end. That’s the nature of PAYE – you pay your tax as you earn your money. Unless you have other income outside your normal job – through renting out a property, Airbnb income or some such – your never really have to deal with Revenue on tax affairs, never mind on a tight deadline.
However, the Covid pay supports put in place last year changed all that. Introduced in a hurry to try to pre-empt employers having to make wholesale layoffs as the pandemic lockdown shuttered business, it bypassed the usual tax at source structures.
Revenue said the temporary wage support scheme (TWSS), subsequently replaced by the employment wage subsidy scheme (EWSS), would be paid without any income tax, universal social charge or PRSI. The same was true for pandemic unemployment payment (PUP), the enhanced unemployment benefit for those let go because of Covid, but this is standard practice on benefit payments.
There were three issues with TWSS. First, they stored up tax bills for workers not used to dealing with such matters. Second, employers, who could afford to, were allowed to top up wages but only to 100 per cent of net weekly pay; they were not allowed to compensate workers for the tax bills everyone knew must follow.
And finally, for those employees whose wages were made up to 100 per cent of net pay, they were not necessarily aware that they had to set money aside for any future bills. They hadn’t asked for TWSS and they might well not have read or fully understood the import of brief communications from their payroll departments.
The fact that only employers who suffered – or feared they would – at least a 25 per cent fall in revenue could apply, and that the alternative could well have been the loss of their jobs didn’t register.
As year end loomed and people started to become aware of what was coming, uncertainty and anger was offset by assurances from Government that people would effectively have five years to pay any bill. Nothing was due until 2022 and would then be spread over four years.
For most, that meant fairly small bills that might even be addressed by adjusting their tax credits.
Revenue did say people would have their preliminary statement so they would have clarity. Better still, they said that employers could pay any liability where they could afford to and offered – without any benefit in kind accruing.
But then you ran into the roadblock of joint assessment. It’s an obvious one really and it is odd that it has not crossed my desk before now.
Clearly, where the two people being jointly assessed are both PAYE taxpayers, there is no issue. But where one is self-assessed, complications arise. And there must be thousands of people in just that situation around the State.
This is down to the timing of tax returns for self-assessed people. Your husband does not have to make a return until October and, logically, until that time, Revenue does not know what the tax bill for you as a joint assessment couple is.
Revenue’s position is entirely sensible but that was little consolation in the very extraordinary circumstances PAYE taxpayers found themselves in because of Covid wage supports. And your employer’s not unreasonable deadline for you to use its offer of paying your TWSS tax bill or lose it only compounded the stress.
Ultimately, this is no one’s fault, just a system having to contend with a set of circumstances it was never designed to cope with.
You would wish MyAccount was able to deliver a more real-time response to such exceptional issues but it’s not really designed for that and, in any case, I assume is also largely being managed remotely by Revenue staff working from home.
I have to say that when I was able to contact Revenue directly they were extremely helpful and offered to intercede directly in your case. This is not standard practice: there are systems in place for customer queries and they generally work very smoothly at Revenue. It reflects how everyone is having to be a little more understanding in circumstances hundreds of thousands of people never though they’d find themselves in – a bit like the past year more generally.
Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2, or email email@example.com. This column is a reader service and is not intended to replace professional advice. No personal correspondence will be entered into