Payment of TWSS Liabilities by Employers
Revenue had previously confirmed that it was facilitating employers who wished to pay the 2020 income tax and USC liabilities of their employees arising from the TWSS. The previous deadline for such payments was 30 June 2021. Following representations, certain improvements have been agreed with Revenue.
By way of background, should an employer wish to pay these liabilities on behalf of their employees, on an exceptional, once-off basis and subject to certain conditions, Revenue will not apply the Benefit-in-Kind (BIK) rules that would usually apply where employers make payments of this nature on behalf of their employees.
In order to determine your employees’ tax liabilities, they must provide you with their “preliminary end of year statements”, which they can download from ROS/MyAccount. The employer should be satisfied that the tax liability which they pay on their employees’ behalf must relate solely to the TWSS paid to those employees. The BIK exemption only relates to this portion.
Revenue have now provided the following clarifications in relation to the concessional BIK treatment:
- The concessional treatment is extended until 30 September 2021.
- The concession also applies where an employer pays the tax and USC liabilities of an employee who is a self-assessed taxpayer or, in joint assessed cases, if the employee’s spouse is self-assessed.
- The concession also applies where an employer pays the tax and USC liabilities of a proprietary director(s) in the company, provided that the employer pays the TWSS related liabilities of allemployees in the company.
Some proprietary directors may already have paid their own TWSS liabilities, but not the TWSS liabilities of all other employees. If this is the case, please contact PSC to discuss further.
On a related note, while most employees (for whom their employee does not pay their TWSS tax liabilities) can pay their liability over 4 years (commencing in 2022), this facility is not available to:
- Self-assessed taxpayers, or
- Proprietary directors
These individuals may however avail of debt warehousing.
Further details on the TWSS scheme as it applies to employees are available on the Revenue website.