TWSS and tax

anniela

Hi there, unbeknownst to my husband it appears that his employers had claimed the TWSS for him during covid. I understand they were quiet entitled to do so and also do so without his knowledge. However my husband received the exact same wages each week and did the exact same work and hours etc. He has now gotten a tax bill in excess of 3000. How is he expected to pay this when he just received his Normal wages etc - is this not something his employers should have been paying all along ??

Xander10

https://www.boards.ie/discussion/2058271855/twss-and-tax

It was an anomaly of the initial payment that wasn't taxed through payroll. It was probably a bit rushed in.

I would have expected any employer to have made employees aware they were availing of it.

Is the collection not being done be a a reduction of tax credits for coming years as opposed to paying upfront?

SAMTALK

https://www.boards.ie/discussion/comment/119876666#Comment_119876666

Is is being done through tax credits but he was just paid his normal wages so where was the excess 3g bill from ?

If he has to pay this then it means he was paid 3g less over the subsidy time ?

We had this issue in our work place who made a mess of the whole thing but we stood our ground and said tax bill had to be accounted for when changing wages. We eventually got the money back

cruizer101

My understanding is the collection can be done either way, if you want you can just pay it off or have it applied to future tax credits

Allinall

You should double check that he didn't get any tax rebate during Covid.

If the TWSS was being claimed, his gross taxable pay should have been reduced by the TWSS amount on his pay slip, and the subsidy added to his net pay to keep his net pay the same.

By reducing the gross taxable pay, it would have let to a tax rebate.

Xander10

https://www.boards.ie/discussion/comment/119876687#Comment_119876687

I was stuck on in. Essentially the employer only paid a percentage of the wages which was taxed and the govt topped it up to leave you with the same net pay. The problem was the net payment from the govt wasn't taxed at source .

Essentially we were all paid less

SAMTALK

https://www.boards.ie/discussion/comment/119876721#Comment_119876721

TBF our place jumped on bandwagon to get "free money", which is why we argued our case , and won

no way was I going to work same hours for less pay when they were reaping the rewards !

Cape Clear

This would have shown on his payslips during the period. There was/is a mechanism for the employer to pay the tax on an effected employee's behalf. Screenshot of article attached. I have no idea if this can be done at this stage.

201218 Sunday Indo article ex Dec 13 re Employers paying back TWSS for emp'ees without BIK.docx

ThreeGreens

"I understand they were quiet entitled to do so and also do so without his knowledge. "

That's not quite correct. They might have been entitled to do so (if they met the conditions) but they were supposed to disclose that to the employees on their payslips. Of course it's possible your husband didn't notice it on his payslips nor understand the implications.

Cape Clear

https://www.boards.ie/discussion/comment/119881484#Comment_119881484

Revenue also published the name of employers that had gotten the subsidy.

PaybackPayroll

TWSS was an overly complicated mess, made worse by PAYE Modernisation. Yes, it was rushed in, but before TWSS there was another Wage Subsidy scheme in operation, so the people who came up with TWSS did have a bit of breathing space. Why could they not have introduced EWSS from the start? - or even the furlough scheme they had in the UK?

It only 'worked' due to the extreme efforts of company payroll departments, tax agents and (of course!) payroll software companies.

There were many anomalies and simply unfair elements with TWSS. The employee tax liability being one of them.

Tow

https://www.boards.ie/discussion/comment/119884987#Comment_119884987

The OP's employer can pay his TWSS Tax Liability penalty (BIK) free, if they don't he can lodge a case in the WRC. His employers broke his contract by reducing his gross pay to match his original net, while he was still working full hours. They paid him with free money from the state and also saved on Employer PRSI. That was the one of the issues with the scheme, some employers still open (often doing more work than normal) made a lot of money out of it. I also saw cases where employees on kept on the same fixed Net Pay were actually paying money back to their Employer to work. Their Tax Credit Refunds after a few weeks off were resulting in negative Gross Pay.

PaybackPayroll

https://www.boards.ie/discussion/comment/119887491#Comment_119887491

Yes. We put a facility into our software to allow employers to do this. I don't believe many actually did though.

I also heard about employers essentially pocketing the tax refunds.

ThreeGreens

"The OP's employer can pay his TWSS Tax Liability penalty (BIK) free"

As far as I'm aware, that facility ended on 30 Sep 2021. I don't think it can be done now. (But some employers are doing it anyway and taking the risk).

Cape Clear

https://www.boards.ie/discussion/comment/119887491#Comment_119887491

While I agree that this amounts to an under payment I'm not sure would such a case go far in the WRC and given it's over 2 years since the TWSS ended, why have we not seen such a case to date. I also think that revenue may be instructed to collect the tax over a longer period than previously planned.