The first reported case of Covid-19 in Ireland was on 29 February 2020. Within three weeks, the virus was confirmed to have spread across all regions within the state. The Irish government quickly introduced semi-lockdown measures, promoting working-from-home for all non-essential services, before slowly increasing to the current level of restrictions which are in place until 5 May.
Tax
The government has introduced a number of measures to support businesses and individuals with regards to paying taxes, including the extension of deadlines and waiving of certain penalties. Companies have been advised continue filing annual tax returns as normal with the deadline extended from March until the end of June. The situation is under continued review and it is likely the deadline could be extended further by the CRO (Company Registrations Office) if the current climate hasn’t improved by then. Separately, payments for Employer Income Tax/PRSI/USC/LPT are debited on the third last working day of each month for both Fixed Direct Debit and Variable Direct Debit payments. However, where a variable direct debit fails due to insufficient funds, the authorities have suspended the process of issuing a further request for the payments until further notice. Measures have also been introduced to assist SMEs with debt management – all debt enforcement activity has been suspended until further notice. Interest charges on late payments have also been suspended.
Employee / Employers
All non-essential services companies have been encouraged to engage in remote-working for the past five weeks. This is to protect against the spread of the virus and support the country’s efforts to flatten the curve. As well as introducing the aforementioned tax measures to assist businesses, Government has also rolled out a temporary wage subsidy scheme which has effectively enabled employers who have seen their revenue severely impacted by the Covid-19 pandemic, retain staff by paying a percentage of their wage with the remaining percentage paid by the state. The scheme has been welcomed by businesses as a progressive response to the emergency. In addition, employees who may have lost their jobs due to the impact of Covid-19 are entitled to a temporary allowance of €350 per-week which is an increase on the standard €205 entitlement available to jobseekers.
Business Supports
The government has introduced a number of key funding supports for businesses impacted by Covid-19. These strategic initiatives are aimed to assist businesses through direct funding. Grants typically range from €2,500 in the form of a Business Continuity voucher, made available to SME’s from Local Enterprise boards, to loans of up to €3m in the form of SBCI (State Banking Corporation of Ireland) Future Growth Finance Loan made available to companies of less than 500 employees, with an annual turnover below €50m.
Accounting and Audit
Companies are being advised to assess the impact Covid-19 and the associated economic slowdown will have on operations by producing projections, budgets and cash flows, in certain circumstances government grants may be available to assist in performing this assessment. When preparing financial statements the directors must consider whether there are any adjustments and/or disclosures required. Item’s to consider may include:
- provisions or impairments to assets such as Accounts Receivables and stock valuation
- valuation adjustments for fixed assets and investments
- post Balance Sheet events and whether the accounts should be adjusted or if additional disclosures are required
Directors and auditors/accountants will have to assess the going concern assertion, more now than ever, and consider any disclosures which may need to be made in the accounts and modifications to the Directors’ Report. Audit procedures may have to be reviewed in order to implement new processes as a result of social distancing measures, for example this may include stock takes via video call as physical attendance may not be possible. Auditors will also have to consider the audit evidence required in order to gain assurance in relation to recoverability of debtor, impairment of assets, valuations and consider the impact where loan commitments, leases or other onerous contracts may have been breached.Click here to learn more.
