Changing Goal Posts


Benjamin Franklin’s famous statement that only two things in life are certain, death and taxes is as true today as it was 300 years ago. The other fact that can be stated with certainty is that business needs certainty.

It is therefore with some element of surprise and disappointment that the recently passed Finance Bill again altered the terms of the Employment WAGE Subsidy Scheme. The relevant section is in two parts unrelated to each other. The first closes a loophole which no one could argue with. The second part changes the goalposts for every business in the country who is considering claiming the support in the first quarter of 2021.

The first pay date for 2021 will for many be the 1st January and therefore for many accountants and advisors the decision to claim or not to claim must be made before Christmas. Many had expected that the current criteria that business was down 30% for the second half of 2020 compared to 2019 would remain. This would have allowed the existing position of businesses to continue.

However, the new criteria is that expected turnover (or orders) must be down 30% in the period January June 2021 when compared with 2019. The next three months are more unpredictable than any of the last year with the possibility of a third lock down; the roll out of the vaccine and a general air of uncertainty. How is business expected to know how the last two weeks of March are going to be? What will St Patrick’s day 2021 look like? One then has to look beyond Easter, will the roll out of the vaccine be complete in April, May or later?

As a result, the only sensible thing to say to a business is to claim the subsidy unless you are 100% positive it will not apply and to reassess each month.  Therefore, there is a distinct possibility of a claw back.

The current warehousing scheme currently operates to February 2021 for both PAYE and VAT therefore is not covering March but, in all likelihood, it will be extended. This again is an area of uncertainty, the one certainty that business does not want or need, particularly in these times.

Paddy Malone PRO Dundalk Chamber of Commerce and a practising Chartered Accountant




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