Written answers

Wednesday, 24 February 2021

Photo of Imelda MunsterImelda Munster (Louth, Sinn Fein)
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221. To ask the Minister for Finance the amount in tax rebates that have been claimed under the stay and spend scheme; the number of persons who have made a claim; and if he will make a statement on the matter. [10453/21]

Photo of Imelda MunsterImelda Munster (Louth, Sinn Fein)
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222. To ask the Minister for Finance if he plans to close the stay and spend tax rebate on the date originally planned; if he has conducted a review into the scheme and its effectiveness; his plans for further similar initiatives in 2021; and if he will make a statement on the matter. [10454/21]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 221 and 222 together.

The purpose of the Stay and Spend Tax Credit scheme is to provide targeted support to businesses within the hospitality sector whose operations are likely to be most affected by continued restrictions on public health grounds. In order to claim the Stay and Spend Tax Credit, taxpayers are required to upload a copy of their receipt(s) for qualifying expenditure to the Revenue Receipts Tracker and then make a formal claim for the tax credit when submitting their annual Income Tax Return.

Under the scheme a claim may be made in relation to qualifying expenditure incurred between the period 1 October 2020 and 30 April 2021. Broadly, qualifying expenditure includes expenditure on either holiday accommodation or “eat in” food and drink, with a minimum expenditure amount of €25 per transaction being required.

Claims relating to qualifying expenditure incurred in the period from 1 October 2020 to 31 December 2020 can be made when an individual is submitting his/her 2020 Income Tax Return, which is now available for submission.

As at 14 February 2021 a total of 7,799 claims have been included in 2020 Income Tax Returns. These claims relate to €2,755,230 of the qualifying expenditure recorded on the Revenue Receipts Tracker to date and the tax cost of same amounts to €551,046. However, as the filing deadline for the 2020 Income Tax Return is not until 31 October 2021, information on the total number of claims and cost for the 2020 year of assessment will not be available until after the filing date and the returns have been processed.

Subsequent to claims being made in respect of this new scheme and any other relief or deduction, verification of such reliefs and deductions forms part of Revenue’s comprehensive risk assessment programme.

The scheme itself was developed at a time when there appeared to be a steady downward trend in infection rates and there was an expectation that the re-opening of the economy could be sustained uninterrupted. Unfortunately, this has not been the case and, with the exception of some short periods, public health restrictions have had the effect of impeding the operation of the incentive as originally envisaged. A formal review has not been necessary to conclude that this has been the position.

Decisions on next steps relating to the scheme have yet to be taken and I will continue to assess matters as circumstances evolve.

It is important also to recall that Stay and Spend should not be viewed in isolation from the other measures put in place to support businesses generally and the hospitality sector in particular.

In recognition of the unprecedented challenges facing the Hospitality and Tourism sector, the VAT rate was reduced from 13.5% to 9 % from 1 November 2020. This is a temporary measure to provide support to the sector, where many businesses remain closed for now and those that are open are operating at significantly reduced capacity, and will apply from 1 November 2020 to 31 December 2021.

The Employment Wage Subsidy Scheme (EWSS) continues to be a key component of the Government’s response to the COVID-19 crisis to support viable firms and encourage employment in the hospitality and tourism sector and beyond. I have been clear that there will be no cliff-edge to the EWSS and, as the Deputy will be aware from announcements made yesterday, the scheme is being extended to the end of June 2021.

The Covid Restrictions Support Scheme (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 support is available to companies, self-employed individuals and partnerships who carry on a trade or trading activities, the profits from which are chargeable to tax under Case I of Schedule D, from a business premises located in a region subject to restrictions introduced in line with the Living with COVID-19 Plan.

Businesses may also be eligible under the Debt Warehousing Scheme to ‘park’ certain VAT and PAYE (Employer) liabilities, excess payments received under the Temporary Wage Subsidy Scheme (TWSS), outstanding balances of self-assessed Income Tax for 2019 and Preliminary Tax for 2020.

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