It is difficult to ignore the contrast between the patience the Government is showing towards businesses with warehoused tax debts and the rush to claw back Covid subsidies from PAYE workers.
The Government has responded swiftly to concerns raised by the Restaurants Association and other lobby groups in recent weeks about the rising cost of doing business. Speaking last week, Tánaiste Micheál Martin and Minister for Finance Michael McGrath indicated the Coalition will explore changes to the warehousing scheme, a commonly cited source of angst for employers. The Fianna Fáil leader went so far as to suggest the deadline for businesses to either pay the balance or enter into a repayment scheme with the Revenue Commissioners — set for May 1st having been extended last year — could be moved out.
Is the restriction on passenger numbers at Dublin Airport doing untold damage to our economy?
It’s no secret that small and medium businesses require fresh breathing room and there is an argument for forbearance. But it begs the question why PAYE workers were not given similar leeway.
Since 2022, the Government has been clawing back the money paid out under the original Covid wage support scheme, the Temporary Wage Subsidy Scheme, through tax credit reductions. Under the scheme, employers had their wage bills subsidised at great cost to the State, saving countless jobs during the emergency phase of the pandemic. What was not clear to many employees though was that the payments were not taxed at source, leaving many of them — about 600,000 workers — saddled with an income tax bill for March to September 2020.
If our finances go flat, how will Ireland pay its bills?
One Border, two systems, endless complications: ‘My NI colleagues work from home while I am forced to commute to an empty office’
Geese and sharks show airlines the way to fuel efficiency
Barriers to cross-Border workers and an outsider’s view of the Irish economy
In 2021, Revenue said affected workers could clear their balance in one go or repay it gradually through reductions in their tax credits, over four years, starting in 2022. “Many employees are disappointed,” wrote tax accountant Norah Collender in a blog post on the Chartered Accountants Ireland website in late 2020, “as they feel the subsidy benefited the employer while they, the employee, ended up with less take-home pay and a pending tax bill”.
The sums owing to Revenue were, in the grand scheme of things, relatively small. For others, the burden will have been greater, particularly as inflation ticked upward. Either way, the contrast in the treatment of businesses and employees is striking.
- Sign up for Business push alerts and have the best news, analysis and comment delivered directly to your phone
- Find The Irish Times on WhatsApp and stay up to date
- Our Inside Business podcast is published weekly – Find the latest episode here
