Ireland: Relief measures to support businesses (COVID-19)

The government on 24 June 2021 released a bill—the Finance (COVID-19 and Miscellaneous Provisions) Bill 2021 [PDF 662 KB]—that reflects ongoing support for businesses as they re-open and resume normal trading following coronavirus (COVID-19) pandemic restrictions.

The bill includes new and extended measures as announced in the government’s Economic Recovery Plan (1 June 2021) outlining a pathway for businesses emerging from the pandemic. 

New business resumption support scheme (BRSS)

One measure from the bill is the introduction of the new business resumption support scheme (BRSS), which offers relief to businesses that have experienced a significant reduction in turnover as a result of public health restrictions. Trading businesses with turnover during the period 1 September 2020 to 31 August 2021 reduced by 75% (compared with 2019) would be eligible for the scheme that is to be implemented in September 2021.

• The BRSS would not be restricted by location, rate paying or physical premises.
• Qualifying businesses will be able to apply to Irish Revenue for a cash payment under the scheme, which will be treated as an “Advance Credit for Trading Expenses” (ACTE), capped at €15,000.
• Eligible businesses must file a claim between 1 September 2021 and 30 November 2021.
• While the ACTE will not be considered taxable income upon receipt, it will reduce the trading tax deduction allowable by an amount equivalent to the ACTE.

It appears that the relief is only available when a business commenced to trade prior to 26 August 2020.

The bill confirms the extension of the tax debt warehousing scheme previously outlined in the Economic Recovery Plan—relief for businesses concerned about the management of cash flow upon re-opening. The scheme is now extended until the end of 2021, with an interest-free period for 2022, which means that businesses will not have to pay warehoused tax liabilities until 1 January 2023 with a reduced interest rate of 3% applying for a certain period thereafter. The bill also provides for overpayments of the employment wage subsidy scheme (EWSS) to be included in the scheme.

Extension

The COVID-19 restrictions support scheme (CRSS), available to eligible businesses that carry out a business activity that is affected by COVID-19 restrictions, is extended through 30 September 2021. To qualify for the scheme, a business must have been required to prohibit or considerably restrict customers from accessing their business premises due to public health guidelines.
 

Enhanced restart payment

The bill also provides for enhanced restart week payments under the CRSS for businesses re-opening after a period of restrictions, to incentivise them to exit the scheme and to assist them with the costs of recommencing economic activity. Eligible businesses that open on or after 2 June 2021 would be able to claim an enhanced restart payment of three weeks at double rate of payment as they exit the scheme, subject to a maximum of €30,000. This would allow businesses to restock and resume operations in a safe manner.

The employment wage subsidy scheme (EWSS) continues to be key support for many businesses and is being extended through 31 December 2021. The current payments rates are also extended through 30 September 2021.

For those businesses seeking to avail of the EWSS extension, they must demonstrate a 30% decline in turnover / customer orders for all of 2021 (as compared to all for 2019). This means that businesses that experience an increased in turnover / customer orders in the second half of 2021 may no longer meet the eligibility criteria to claim EWSS. No decisions have yet been taken regarding the future of the EWSS beyond the fourth quarter of 2021.  

The continued extension of the 9% value added tax (VAT) rate for tourism and hospitality through 31 August 2022 recognises the ongoing challenges facing the sector, which is among those most deeply impacted by lockdowns imposed during the pandemic. The VAT rate initially decreased to 9% (from 13.5%) for the period from 1 November 2020 through 31 December 2021.

The bill addresses a financial resolution relating to stamp duty arising on the bulk purchase of certain residential property, while also implementing a number of amendments to the financial resolution’s provisions. These sections introduce a 10% rate of stamp duty on the acquisition, on or after 20 May 2021, of certain types of residential units when an aggregate of 10 or more such units is acquired during a rolling 12-month period. The bill includes an exemption from the 10% rate of charge when residential units are acquired and immediately leased to a housing authority for the provision of social housing.
 

Read a July 2021 report prepared by the KPMG member firm in Ireland