Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

The stay-and-spend scheme provides tax relief by means of a tax credit at the rate of 20% on qualifying expenditure of up to €625 per person, or €1,250 for a jointly assessed couple. It opened on 1 October 2020 and is scheduled to run until 30 April 2021. The tax credit is worth a maximum of €125, or €250 for a jointly assessed couple. The purpose of stay-and-spend is to provide targeted support to businesses within the hospitality sector whose operations are likely to be most affected by continued restrictions.

As it is a demand-led scheme, it is difficult to forecast its cost to the Exchequer in 2021 and 2022. When it was announced in late July, it was estimated that the scheme would involve an Exchequer cost of up to or approximately €270 million. This was an outside estimate based on 2.15 million individual taxpayers availing of the tax credit. In addition, as I indicated at the time, the measure was introduced in anticipation that the economy would be on the way to being fully open and there would be mobility across the country. A number of weeks after we announced the scheme, that all changed. The scheme is due to operate until April of next year, but the flexibility exists for me to extend its operation next year beyond that date. As for uptake and the eventual cost across next year and the year after, a lot will depend on how matters unfold in the weeks and months ahead. As at 18 November, the Revenue Commissioners advise that total qualifying expenditure recorded on receipts uploaded was €2.2 million, with total tax credit of €440,000 due to taxpayers.

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