Additional COVID-19 related supports for businesses

Last week, the Government published the Economic Recovery Plan (ERP), setting out a new phase of supports as economic activity resumes and people get back to work. The ERP provides for the enhancement and extension of the Employment Wage Subsidy Scheme (EWSS), the Covid Restrictions Support Scheme (CRSS) and the Tax Debt Warehousing Scheme, along with a new Business Resumption Support Scheme (BRSS).

The ERP is divided into four Pillars focused on a jobs-led recovery.

Pillar 1 – Sustainable public finances

The objective of returning to stable public finances as set out in Pillar 1 is to be balanced with not withdrawing supports too quickly and risking economic progress.

Pillar 2 – Helping people get back to work

Following on from Pillar 1, Pillar 2 provides for the extension of existing support to reduce the risk of labour market scarring and entrenched long-term unemployment due to the pandemic.

Employment Wage Subsidy Scheme (EWSS)

The EWSS will be extended beyond 30 June 2021 until 31 December 2021. The current enhanced payment rates are to be maintained for Quarter 3 (July, August, September) at current turnover thresholds. The current threshold of a 30 percent reduction in turnover is retained but the reference period of assessment is being broadened out so that, for the purposes of determining eligibility for the scheme, a firm’s turnover in the full year 2021 will be compared against its turnover in the full year 2019. For Q3, there are no changes for qualification for EWSS for the childcare sector.

The question of employer contribution to employee wages and the issue of payment rates will be considered for Quarter 4, with a decision expected around the end of August/early September.

Pandemic Unemployment Payment (PUP)

The PUP will be extended beyond 30 June 2021 for existing claimants. The scheme will close to new applicants from 1 July 2021 as there should be no new job lay-offs as a direct result of public health restrictions.

The PUP will be available to students until the start of the 2021/2022 college year (final payment on 7 September).

From 7 September 2021 it is intended that the support available under the PUP will be reduced on a phased basis in increments of €50 per week. Subject to progress, two further phases of changes will take place on 16 November 2021 and 8 February 2022. The Covid-19 illness payment will continue to remain available.

The Department of Social Protection issued a press release setting out the changes announced to the PUP in detail.

Other measures including the Pathways to Work 2021-2025 and re-skilling and up-skilling are considered in Pillar 2.

Pillar 3 – Re-building sustainable enterprise

Pillar 3 includes a renewed package of supports and investments for businesses.

Covid Restrictions Support Scheme (CRSS)

The CRSS will be extended beyond 30 June to 31 December 2021. There will be an enhanced restart payment of three weeks at double rates of payment to support businesses in meeting the costs of reopening as they exit the scheme. The maximum restart payment will be increased from €5,000 per week to €10,000 per week. This allows businesses reopening from 2 June to receive up to a maximum of €30,000.

Revenue confirmed in a press release that it will operate the changes to the CRSS on an administrative basis pending the enactment of the necessary legislation. The press release encourages business to consider when it will be most beneficial to make their claim for the enhanced restart payment, as once it is claimed the business no longer qualifies for CRSS.

Small Business Assistance Scheme for COVID-19 (SBASC)

Eligibility for the SBASC for the second Quarter of 2021 has been broadened in two ways. Where businesses have a minimum turnover of €50,000, they can benefit from a €4,000 grant. This now includes businesses in non-rated premises, thereby benefitting self-employed people working from home, who meet all other eligibility criteria. It also provides for a grant of €1,000 for businesses with a minimum turnover of €20,000 and a maximum turnover of €49,999, with all other SBASC eligibility criteria applying.

Business Resumption Support Scheme (BRSS)

This new scheme will provide support to businesses with significantly reduced turnover as a result of public health restrictions in September 2021.

Businesses with profits chargeable to tax under Case I of Schedule D whose turnover is reduced by 75 percent in the reference period (1 September 2020 to 31 August 2021) compared with 2019 will be eligible. The scheme will not be restricted by location, rate paying or physical premises. Qualifying businesses will receive a cash payment, representing an advanced credit for trading expenses that are deductible for income and/or corporation tax purposes.

Businesses who previously availed of other schemes such as SBASC and the Tourism Business Continuity Scheme for example as well as CRSS will be eligible to apply provided they meet the qualifying criteria.

The BRSS will be administered by Revenue and will operate in a similar way to CRSS. Payments will be calculated on the basis of 3 weeks at 10 percent of the first €1 million in turnover and 5 percent, thereafter, based on average VAT exclusive turnover for 2019, subject to a maximum weekly payment of €5,000. Similar conditions to CRSS and EWSS will apply including tax clearance and payment will be conditional on the intention to trade.

Tax Debt Warehousing Scheme

The Tax Debt Warehousing Scheme will be extended to the end of 2021 for all eligible taxpayers with an interest free period during 2022. Covid-19 related liabilities will then fall to be paid from 1 January 2023 and interest at a reduced rate of 3 percent will apply from this date.

The scheme allows businesses to warehouse liabilities relating to VAT, PAYE (Employer) liabilities, certain self-assessed income tax liabilities and overpayments of Temporary Wage Subsidy Scheme (TWSS). Overpayments of EWSS will now be included in the scheme also.

Commercial rates waiver

The commercial rates waiver will be extended beyond 30 June, to end-September, in its current form. Further information on the extension of the commercial rates waiver is available in a press release issued by the Department of Housing, Local Government and Heritage.

VAT for tourism and hospitality

The lower tourism and hospitality VAT rate of 9 percent will be extended to 1 September 2022.

Other supports in addition to the above are included in Pillar 3 with specific consideration given to the aviation and tourism sectors.

Pillar 4 – Balanced and inclusive recovery

The Government provides a commitment to recovering in a balanced, sustainable and inclusive manner as set out in Pillar 4.

Further information on the additional supports announced by the Minister for Finance is available in the Department of Finance press release.

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