Like all business owners we have been spending the last few days trying to come to terms with the worsening Covid-19 situation. While the health of the nation is the most important thing at this time, as business owners, we are all extremely uneasy about what the future holds.
We have attempted to summarise below some of the key announcements and supports that have been made by the Government and various stakeholders over recent days.
We will continue to do this as the days and weeks progress. Please bear with us on this. We are trying to get certainty on everything ourselves!
Employment Issues
A number of measures and supports have been announced by the State. The latest available detail on all of the employment supports can be found here https://www.gov.ie/en/publication/99104a-covid-19-coronavirus/
From discussions we are having with various business owners the main support required at the moment is around unemployment or short term lay off. The department announced over the weekend a fast track way for employees to obtain jobseekers payments. There is effectively one of two routes to choose from:
1.Where employers continue to pay employees after ceasing to trade due to the impact of Covid 19:
Employers will be able to claim a refund from the Department of Employment Affairs and Social Protection. A temporary refund scheme is being established for this purpose.
This refund will be for €203 per worker per week. This means that workers retain their link with employers and there is no need for them personally to submit a job seekers claim.
The refund scheme will take some time to set up but in the meantime the Banks have been requested to provide working capital finance in the form of overdrafts or short term loans to cover costs.
Banks have said they will assist in this process by providing credit to employers but no specifics are known as yet
There may be instances where employers want to continue to pay in excess of €203 per week. It is not certain how this should be treated through payroll. We are in new territory here. We would believe that the €203 should be processed as non-taxable pay while any excess paid over €203 should be processed as taxable pay as normal. This is how illness benefit would be treated through payroll. Generally an employee’s tax credits are adjusted for the amount of benefit received. We are awaiting revenue guidelines on the correct way to process these payments.
This payment support is for both employed and self-employed individuals
2. Where employers are not in a position to continue to pay:
A new simple one page process form has been introduced. The employee completes the form (UP1 – very straight forward) and posts to the department. (FREEPOST, PO BOX 12896, Dublin 1).
The form has bank details on it and the benefit will be paid at a rate of €203 directly to the employee bank account for 6 weeks. The department guidance says to check bank account as payment may issue before you have been formally notified.
You will need to formally apply for Jobseekers to ensure you continue to receive your entitlement after 6 weeks. If you are owed additional benefit this will then be paid.
There are 3 self-declarations to be made on this form. Everyone needs to be honest here as they will get what they are properly due and by making a false declaration could be denying themselves some entitlements
See further guidance attached – https://www.gov.ie/en/service/be74d3-covid-19-pandemic-unemployment-payment/
Finance / Working Capital
We have been assured that all banks are going to support business in whatever way they can.
1.Working Capital Scheme
Specific details on working capital scheme aspect of the reliefs announced are due to be available this week. We will share once we know the exact details.
What we know:
€200m of funding will be available for working capital lending
maximum interest rate of 4%
individual loans up to €1.5m
possible no security required on up to €500k
Covid 19 impacted business eligibility – criteria will be detailed
2. Micro Finance Ireland
Micro Finance Ireland loan values have been increased from €25,000 to €50,000. This funding is available for businesses with up to 9 employees.
3. SME Credit Guarantee Scheme
This is available to Covid 19 impacted businesses. The scheme operates by providing an 80% guarantee to participating finance providers (currently AIB, Bank of Ireland and Ulster Bank) on qualifying loans to SMEs.
Loans available from €10,000 to €1m
Terms of up to 7 years
https://sbci.gov.ie/schemes/sme-credit-guarantee-scheme-cgs
Revenue
Revenue issued guidance early last week and updated that guidance on Friday 13th. Some positive help for SME’s;
Still get returns filed on time (even if you are struggling for cashflow and may not be able to pay)
Revenue will suspend debt enforcement until further notice
Tax clearance – your current status will remain. This is critical for certain businesses and basically it means if you currently have tax clearance that will not be taken away if you run into payment issues with upcoming returns
Interest will not be applied to late payments of Jan/Feb VAT or Feb and March payroll taxes
The subcontract rate review which was due to take place in March will now not take place – good news for sub contractors with RTD’s or other returns o/s – get them filed now!
It is important that businesses and people that are in a position to pay should do so!
