Today, the Irish government announced additional measures to help businesses deal with the cost-of-living increases.
VAT
A final extension of the 9% reduced VAT rate for the tourism and hospitality sector for a further six months. The reduced VAT rate was due to expire on 28th February 2023, but has been extended until the end of August 2023.
This extension will be a welcome relief to businesses in the sector who had feared that the temporary reduction would not be extended beyond the original expiry date.
The 9% VAT rate on electricity and gas has also been extended to the end of October to ease pressure on bills.
Temporary Business Energy Support Scheme (TBESS)
The measures announced today will also see the TBESS extended until the end of May 2023.
In order to help more businesses to qualify, the threshold for qualification will be cut from the current 50% increase in electricity or gas costs compared to the same period a year ago, to a 30% increase.
These changes will apply retrospectively from September 2022.
The level of relief will also increase from 40% to 50% of eligible costs from March 1st.
The scheme is open to businesses that:
- are tax compliant
- carry on a Case I trade or Case II profession (including certain charities and approved sporting bodies in relation to certain activities), and
- have experienced an increase of 30% or more in their electricity and/or natural gas average unit price.
The increase in energy bills must be between the ‘claim period’ and the ‘reference period’. A claim period is a calendar month from September 2022 to May 2023. A reference period is the corresponding calendar month in the previous year.
For example, September 2021 is the reference period for the September 2022 claim period.
The following items can not be included in the eligible costs:
- Value Added Tax (VAT)
- any arrears or prepayments (the charges must relate to the particular billing period)
Payments will remain subject to a monthly limit, but will rise from the current €10,000 to €15,000 per month per trade or profession from next month.
The €15,000 limit can be increased where a qualifying business operates across multiple locations and has more than one electricity account. In such cases, the monthly limit can increase by €15,000 per electricity account, subject to an overall monthly limit of €45,000.
TBESS does not enable businesses that use LPG, kerosene or fuels other than natural gas or electricity to claim, however, the Government is to look at introducing a new grant to help such businesses.
