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Government to allow SME directors to stay on wage supports

U-turn on plans for EWSS pay follows strident complaints from small business owners

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Finance Minister Paschal Donohoe said cutting the standard VAT rate was more effective (Julien Behal/PA)

Finance Minister Paschal Donohoe said cutting the standard VAT rate was more effective (Julien Behal/PA)

PA

Finance Minister Paschal Donohoe said cutting the standard VAT rate was more effective (Julien Behal/PA)

The Government has swiftly reversed plans to remove company directors from Covid-19 pay supports after small firms complained vociferously online and to their local TDs.

Finance Minister Paschal Donohoe announced the U-turn tonight after small business owners denounced plans to make them ineligible for the Employment Wage Subsidy Scheme (EWSS), the successor for the State’s emergency Temporary Wage Subsidy Scheme (TWSS).

The latter support, due to expire on September 1, can be claimed by company directors. The final published rules for EWSS - due to be paid through the end of March 2021 - excluded directors.

“Over the past 48 hours I have listened to the concerns of certain proprietary directors in relation to provisions of the EWSS,” Mr Donohoe said.

“Having considered the points raised with me, I have decided to ask the Revenue Commissioners to reinstate proprietary directors to the EWSS from 1 September where they are retaining ‘ordinary’ employees on their payroll,” he said.

The rapid policy reversal followed mounting condemnation by company directors, particularly hospitality firms that were shut for months by Covid-19 disruption and are struggling now to generate sufficient turnover.

Neil McDonnell, chief executive of Isme, which represents more than 1,000 small and medium-sized firms nationwide, emailed them earlier today and issued contact details for their local TDs.

“We are not in the business of preventing politicians taking a holiday. But this one went over their heads because they weren’t paying attention. … You need to snap them out of it,” Mr McDonnell told Isme members.

He said the intention to cut directors off from EWSS wage support “is yet another sign - if we needed one - of how detached the Government and the senior civil service have become from the needs of small business”.

Kark Purdy, owner of five Coffeeangel shops in Dublin, said SME directors “don’t expect or accept being singled out and assaulted by those who represent us”.

Adrian Cummins, chief executive of the Restaurants Association of Ireland, tweeted earlier that Mr Donohoe “needs to urgently amend this injustice so that all SME owners who are struggling economically can avail of the EWSS”.

On Tumbler, Cork’s Idaho Café posted what it called an “open letter” to the Government.

The firm’s owners, Mairead and Richard Jacobs, said they were closed from March 14 to July, when they reopened their 32-seat premises with social distance rules capping indoor seating at 12.

“Despite our investment in extra outdoor furniture, our turnover is down 40pc,” they wrote. “The Government ... are now pulling the plug on our business.”

The couple said they are ‘directors’ who “make the coffee and cook the food, but because we own our own business, the Government say they will not subsidise our wages. … We cannot afford to work without pay in a loss-making business. To do so would be illegal under company law.”

Online Editors