This information sheet is also available in pdf-format.
You can find information on how the NOW schemes work in our factsheet Emergency Measure to Safeguard Employment (NOW)
For all business owners who have submitted an application to the UWV for the Emergency Bridging Measure for Employment 1.0 (NOW 1.0), it is time (to make the necessary preparations) for the final settlement to be determined. The submission period for finalising the NOW 1.0 final settlement began on 7 October 2020.
Submission deadlines
The deadline for submitting an application for the NOW-1 scheme is 31 October 2021.
Adoption of NOW-1
The business owner can submit an application for a determination using the application form made available on the UWV website. The following details are required when applying for a determination:
- company details: name, address, telephone number, email address, Chamber of Commerce registration number, contact person’s details;
- the payroll number for which the NOW-1 scheme has been applied for;
- the actual percentage of the loss of turnover during the period for which the NOW-1 scheme has been applied for;
- the account number and the name on the account;
- a copy of the bank statement;
- Depending on the amount of the advance payment and the final settlement amount, a third-party certificate or an auditor’s report may be required.
The UWV and the Ministry of Social Affairs and Employment have identified the following seven situations:
- Advance payment amount: : < €20,000 and the assessed amount: < €25,000:
In such cases, it is sufficient for the trader to submit a statement of account. In this statement of account, the trader need not no to submit a third-party statement or an auditor’s report.
- Advance payment amount: ≥ €20,000 and < €100,000 and/or the amount determined: ≥ €25,000 and < €125,000:
In such cases, the trader must submit a third-party certificate together with the statement of account.
- Advance payment amount: ≥ €100,000 and < €375,000 and/or the assessed amount: ≥ €125,000 and < €375,000 and the company is not subject to audit:
In such cases, a compilation report from the accountant is required when submitting the final accounts.
- Advance payment amount: ≥ €100,000 and < €375,000 and/or the assessed amount: ≥ €125,000 and < €375,000 and the company is well subject to audit:
In such cases, a limited assurance report from the auditor is required when submitting the final accounts.
- Advance payment amount: ≥ €375,000 and/or the amount to be determined: ≥ €375,000 and the business is not subject to audit:
In these cases too, a limited assurance report from the auditor is required.
- Advance payment amount: ≥ €375,000 and/or the amount to be determined: ≥ €375,000 and the business is well subject to audit:
In such cases, an auditor’s report providing a reasonable level of assurance is required.
- The company is part of a group, but has submitted an application at operating company level, and the advance payment is < €20,000 and the final payment is < €25,000:
In these cases too, an auditor’s report providing a reasonable degree of assurance is required.
The above means that the auditor will determine the depth and scope of the work to be carried out on the basis of the required assurance report for the NOW-1 determination. In this regard, where an audit report with a reasonable degree of assurance is required, the auditor will need to carry out work of considerable depth and scope, including a significant amount of (additional) work. For the other types of report, the auditor’s work will also be extensive, but to a lesser extent and with less depth.
Work to be carried out by the accountant
The (additional) audit procedures required for the compilation and audit reports have been defined in advance on the basis of an audit protocol accompanying NOW 1.0. The (additional) procedures relating to the third-party statement have also been defined in advance and are included in full in the third-party statement.
This (additional) work focuses on the various elements of the assessment. These elements are as follows.
- Group/operating company level component – the auditor must, inter alia, determine on the basis of additional work that:
- the resolution is submitted at the appropriate group/operating company level;
- in the case of a group-level application, the relevant entities have been included in the assessment.
- Turnover component for the reference period[1] – the auditor must, inter alia, determine on the basis of additional work that:
- the correct revenue categories have been included in the turnover for the reference period;
- the revenue for the reference period has been correctly defined;
- the turnover for the reference period has been calculated correctly.
- Revenue component for the reporting period[2] – the auditor must, inter alia, determine on the basis of additional work that:
- turnover for the reporting period has been calculated on the basis of the consistent application of the accounting policies adopted;
- the correct revenue categories have been included in the turnover for the measurement period;
- the revenue for the measurement period has been correctly allocated;
- the turnover for the measurement period has been calculated correctly.
- Pay bill component – the accountant must determine, on the basis of, amongst other things, additional work, that:
- the total payroll matches the payroll records;
- the total wages have actually been paid to the employees;
- there are no deemed or fictitious employment relationships.
Turnover definition based on NOW 1.0
One of the complex aspects of the scheme is that the NOW 1.0 scheme defines a broader concept of turnover than the turnover reported annually in the annual accounts or financial statements. Under Article 1(2) of the NOW 1.0 scheme, all income arising from the conduct of an organisation’s normal business activities, even if it is usually referred to by a term other than ‘turnover’, is considered to be turnover for the purposes of this scheme. Examples of this include sickness benefit payments received, wage cost subsidies and turnover bonuses.
This means that turnover, based on this definition of turnover, must be determined for both the reference period and the measurement period, and differs from the turnover normally presented in the annual accounts or interim results.
Determination/delimitation of turnover
The auditor must also ensure that turnover is correctly allocated to the relevant period. This means that turnover must be recognised in the correct period. To this end, additional work must be carried out in relation to the recognised amounts for work in progress and/or turnover yet to be invoiced and/or invoiced in advance. This applies to the demarcation of the reference period and at the start and end of the measurement period. Subsidies such as TVL, TOGS and TOZO are allocated to the measurement period, taking into account the period for which they were received.
Turnover within a group/conglomerate
If the business is part of a group (and the NOW has been applied for at group level), the turnover of the entire group must be taken into account. Turnover arising from transactions between the various companies within a group is eliminated in this context. Turnover from affiliated companies abroad is only taken into account if Dutch social security contributions are paid there.
No findings
Any business owner who has determined, in the light of the actual figures, that they are not entitled to the NOW-1 scheme may make this known by submitting a zero declaration. In such cases, the business owner is not required to submit any additional (auditor’s) statement, and the full advance must be repaid to the UWV. Naturally, it is important to first carefully check whether a zero declaration is correct. Otherwise, the business owner would be wrongly foregoing the allowance under the NOW-1.0 scheme.
No determination
If the business owner does not submit an application to the UWV for the NOW 1.0 scheme, or does not do so in time, the UWV will assume that the business owner is not entitled to the NOW 1.0 scheme. The business owner will then be required to repay the full advance.
Verification and processing by the UWV
If, based on the amount of the advance payment and the amount of the final assessment, the business owner is not required to submit a third-party statement or an auditor’s report, the assessment will be reviewed by the UWV.
If, when determining eligibility for the NOW 1.0 scheme, the business owner is required to submit a third-party statement or an auditor’s report, the UWV will assess the claim taking these documents into account. If necessary, the UWV may request further information.
The UWV also determines any discrepancy between the advance payments made and the final assessment. If the business owner has received too much NOW, they must repay the excess. If the business owner has received too little, they will be paid the remaining amount. The UWV aims to send the final payment to the business owner as soon as possible. The deadline for this is 52 weeks after the application for final assessment has been submitted.
Once the NOW 1.0 has been definitively determined by the UWV by means of a decision and a sum under the NOW is to be repaid, this must be done within six weeks (within six weeks of the UWV’s decision).
If this cannot be resolved within six weeks, you should contact the UWV, which can arrange a payment plan lasting 12 months and, in extreme cases, even longer.
The purpose of this note is to outline a scheme. For the sake of readability, matters have therefore been simplified. VWG is therefore not liable for the consequences of actions taken or not taken as a result of this memorandum.
[1] Turnover for the reference period is one quarter of the turnover for 2019. If the company was established after 1 January 2019 and/or has a non-standard financial year, additional rules apply for determining the reference turnover.
[2] Turnover for the reference period refers to the turnover for the three consecutive months for which the business owner has applied for the NOW 1.0 scheme.