Revenue has moved to dispel concerns over the new COVID-19 Wage Subsidy Scheme.

The scheme will see the State refunding up to 70% of salaries for businesses that have been badly hit by the outbreak – up to a maximum of €410 per week.

After it was announced however, the Law Society and business group ISME warned that flaws in the legislation would see many businesses deciding not to take part.

Declaration

The legislation requires businesses to issue a declaration that they had experienced a minimum decline in turnover of 25% and were no longer able to meet their wage bill.

Business groups warned that the requirement would effectively see companies declaring themselves insolvent while continuing to trade – which could leave them in legal difficulty as this is generally seen as fraudulent.

The names of the businesses would also be published online by Revenue – something that is usually reserved for tax defaulters and could potentially affect credit ratings in the future.

Turnover

There were also concerns over how businesses should show that they were experiencing a decline in turnover or unable to pay their wage bill – with the potential for strict penalties and interest down the line if Revenue decided a business had calculated incorrectly.

This morning, Revenue moved to clarify many of the concerns raised about the scheme.

Barbara O’Sullivan, Managing Partner in Finn & O’Sullivan Accountants and Tax Consultants, said the clarification addressed most of her concerns about the scheme.

“In general, I am more comfortable with the scheme as a result of the clarification issued by Revenue,” she said.

“The actual legislation is still, in my view unclear, but I would depend on this guidance in good faith.

She said she contacted her clients as soon as the guidance was published this morning.

“I sent an email out because I knew there were lots of them that were really stressed about this and were feeling that they were being forced to lay off staff they didn’t want to lay off.

“Now, they don’t have to do that and that’s purely down to the clarification of things they felt were ambiguous or worrying in making that declaration.”

The legislation was passed by the Seanad this afternoon and will now go to the President for his signature.