Following the confirmation from the Minister in recent weeks that tax liabilities for those employees who were placed on the TWSS would not fall due until at least 2022, Taxback.com have released the results of their latest survey which revealed that 75% of Irish taxpayers believe that the controversial tax should be scrapped completely. The latest Taxback.com Taxpayer Sentiment survey of over 2,100 taxpayers, revealed that the vast majority of respondents feel the tax is unfair and should be waived by Government.
The Taxback.com survey asked the following:
As it stands, many employees whose employer placed them on the Temporary Wage Subsidy Scheme face a significant extra income tax bill. The additional tax deduction will be due even though they didn’t earn any more income during the pandemic. Do you think the Government should waive this extra tax liability?
- Yes, it’s not fair – 75%
- No, we need the taxes – 25%
Commenting on the findings, Marian Ryan, Consumer Tax Manager with Taxback.com
“During the summer we conducted analysis to get an idea of how much people could expect to pay in their tax bill and concluded that Christmas could see workers hit with a tax bill of up to €2,828 This will undoubtedly cause significant financial pain for many households. The fact that 75% of respondents to this survey, some of whom may have been placed on the TWSS and others who have not, indicated their desire for the tax to be waived, is perhaps a reflection of what people throughout the country are feeling. COVID-19 has taken a significant financial and mental toll on many families and there’s a widespread appreciation that people simply don’t need any further financial worry or stress.”
The tax experts believe that although there has been some discussion on the topic in the public domain, the news of the tax bill is still very likely to come as a major shock to thousands of people throughout the country, as a previous Taxback.com survey found that over well half of respondents (57%) were not aware that they may be subject to this additional tax liability.
Payment Impact
The latest statistics from Revenue show that over 663,600 employees have been paid by the TWSS since its inception. Taxback.com say that while the implementation of these supports has been absolutely crucial and has helped thousands of employers and employees to weather the storm of the pandemic, perhaps they could have been structured differently so as not to have the unintended consequence of households even further out of pocket.
Ms. Ryan commented,
“We are very mindful of the fact that this scheme was rolled out in good faith at the start of the pandemic to see employers through the volatility of COVID-19. However, there have been unforeseen consequences as a by-product of the speed with which it was introduced.
While the term “reducing tax credits” might not mean anything to people now, it’s important that workers understand that it will ultimately mean extra tax and a reduction in weekly or monthly take home pay during that period. We’ve run some numbers to give both employers and employees a better understanding of how it could impact them – for example, an average worker on a salary of €38,000, will find the following changes to how much income tax they pay.”
