Tuesday, 13 October 2020
Department of Finance
Covid-19 Pandemic Supports
101. To ask the Minister for Finance if payments issued under the restart grant and restart grant plus will be exempt from payment of income tax and other tax liabilities; and if he will make a statement on the matter. [29929/20]
The restart grant and restart grant plus are a contribution towards the cost of re-opening or keeping a business operational and re-connecting with employees and customers.
I am advised by Revenue that in the case of a sole trader who is within the charge to income tax, such a grant would be taken into account in computing amounts chargeable to income tax. The tax treatment of the grant will depend on how it is used:
- Where the grant is used by the sole trader to defray expenditure which is revenue in nature, such as utility or insurance expenses costs, it will be taken into account when calculating the trader’s taxable trading profits.
- Where a grant is used to fund the acquisition of plant and machinery for use in the sole trader’s business, expenditure which is capital in nature, the trader will be entitled to claim capital allowances in respect of that expenditure net of the grant received.
Revenue also advise that a similar treatment applies for a company in receipt of the restart grant or restart grant plus.
102. To ask the Minister for Finance if the stay and spend scheme will be expanded to include takeaway meals in view of the recently announced restrictions on indoor dining; and if he will make a statement on the matter. [29965/20]
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, in respect of 2020 and 2021. The tax credit is worth a maximum of €125, or €250 for a jointly assessed couple.
As the Deputy will be aware, the Stay and Spend scheme is just one of a broad range of measures to support various sectors, including hospitality, at this time. The purpose of the Stay and Spend scheme is to provide targeted support to businesses within the hospitality sector whose operations are likely to be most affected by continued restrictions. While I appreciate the point raised by the Deputy, food and drink service providers which operate on a take-away basis are not expected to be as heavily affected by the current restrictions as service providers offering ‘dine-in’ food and drink services and so would not fall within the particular objectives of the scheme.
103. To ask the Minister for Finance if he will address a matter (details supplied) regarding the pandemic unemployment payment and level 3 restrictions; and if he will make a statement on the matter. [30059/20]
The design of the Employment Wage Subsidy Scheme (EWSS) reflects the changing environment around the COVID-19 pandemic which has shifted from crisis mode to one of living alongside the virus, in line with the recently announced Resilience and Recovery 2020-2021: Plan for Living with COVID-19.
The Government’s focus has therefore shifted from an employee income support paid via the employer that maintained the existing employee/employer relationship insofar as was possible, to a direct employer subsidy to help support viable firms and encourage employment, including prospective employment of new hires and seasonal workers.
It is appropriate that the level of State subsidy be moderated as many of the strictest public health restrictions on the economy that were in place in April and May have been eased and so it is expected that businesses are able to shoulder more of the economic burden of their businesses, including wages. At the same time, it is recognised that economic outputs are unlikely to return to normal for many businesses for much of the rest of 2020, which is why the Government remains committed to supporting employers by means of a wage subsidy.
A number of new flexibilities have been included in the EWSS, while the rates and eligibility criteria have been modified so that the support is sustainable into the more medium term. In that regard, I would note that the level of subsidy being granted under the EWSS is commensurate with the average payment per worker under the TWSS which had been reducing since the start of June and when the TWSS ceased at the end of August was €282 across all recipients and €225 in the case of first-time recipients.
It is important to emphasise that the adaptation from the TWSS to the levels of support in the EWSS will allow employers to rely on the continuation of support over a longer period of up to 8 months while also ensuring such support is sustainable and affordable.
Finally, for those businesses who need further support, or who experience cash-flow difficulties arising for the timing of the subsidy payments, there are a number of options open to them – including State backed loans which may be repaid using EWSS funds as well as grants. Particular attention is drawn to the comprehensive package of business and employer supports that have been made available as part of the July Stimulus Plan - including the Credit Guarantee Scheme, the SBCI Working Capital Scheme, Sustaining Enterprise Fund, and the Covid-19 Business Loans Scheme.