Tuesday, 20 October 2020
Department of Finance
Covid-19 Pandemic Supports
220. To ask the Minister for Finance the details of the Covid-19 restrictions support scheme; if the scheme is an advanced tax credit scheme; and if so, the tax implications for businesses that access funds under the scheme in the coming years. [31293/20]
221. To ask the Minister for Finance the reason the Covid-19 restrictions support scheme does not include suppliers upstream in the business chain (details supplied); if there will be support for suppliers whose business may be drastically affected by the effects of the public health measures to their customers downstream in the business chain that are affected by level 3 to level 5 restrictions; and if he will make a statement on the matter. [31294/20]
224. To ask the Minister for Finance the way in which the Covid-19 restrictions support scheme will be operated, in particular the way it will impact tax deductible trading expenses in future years; the timeframe for same; and if he will make a statement on the matter. [31453/20]
236. To ask the Minister for Finance if the Covid restrictions support scheme, CRSS, applies to companies that support the entertainment sector but that do not have a physical product, companies that provide a service to the entertainment industry that may rent venues, products and so on, for example, event promoters, arts and lighting specialists; and if he will make a statement on the matter. [31574/20]
I propose to take Questions Nos. 197, 220, 221, 224 and 236 together.
The details of the Covid Restrictions Support Scheme (CRSS) will be set out in the Finance Bill due to be published this week. The CRSS is a targeted support for businesses significantly impacted by restrictions introduced by the Government under public health regulations to combat the effects of the Covid-19 pandemic.
The CRSS will provide support for companies and self-employed individuals who carry on a trade or trading activities from a business premises located in a region subject to restrictions, introduced in line with the Living with Covid-19 Plan, with the result that the business is required to prohibit or considerably restrict customers from accessing their business premises.
Generally, this refers to Covid restrictions at Level 3, 4 or 5 of the Government’s Plan for Living with Covid-19 but certain businesses may qualify for the support where lower levels of restrictions are in operation.
Where a company or individual is either forced to temporarily close their business, or the business is required to operate at significantly reduced levels, because of the restrictions, the company or self-employed individual will qualify for the support. Certain other conditions will apply, including that the person has a tax clearance certificate.
Qualifying businesses will be able to make a claim to Revenue under the CRSS for a cash payment to be known as an “Advance Credit for Trading Expenses” (“ACTE”). The ACTE will provide an immediate cash support to companies and self-employed individuals.
With the Revenue Commissioners making the tax credit available directly in cash, this valuable upfront cash boost to businesses will be hugely beneficial in enabling them to meet their normal fixed costs such as rent, insurance, utilities and so on. At a later point when the business makes its annual tax return to Revenue for the chargeable period in which the support is received, the normal tax deductions for those fixed costs will be reduced by the State’s contribution provided through the CRSS. . Whilst the CRSS payment will reduce the amount of trading expenses that are deductible in computing the taxable income of a business, the CRSS payment will not result in additional tax unless that business has trading profits for the period. The tax treatment of the ACTE is similar to that which would apply had it been a direct State grant.
The CRSS covers the provision of both goods and services. For a business that provides a service to a qualifying business (such as a trading company that operates a theatre), to be eligible to make a claim under the scheme, that other business must meet the eligibility criteria in its own right.
The CRSS is targeted at businesses whose premises are affected by the restrictions. Companies and self-employed workers who do not qualify under this scheme may be entitled to support under various measures put in place by Government, including the range of measures announced as part of Budget 2021 to support live entertainment in 2021, and existing supports available under the COVID Pandemic Unemployment Payment (PUP) and the Employment Wage Subsidy Scheme (EWSS).