James O'Connor (Cork East, Fianna Fail)
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266. To ask the Minister for Enterprise, Trade and Employment if he will outline possible State aid funding for businesses which face pressures following the no-reduction decision on VAT taken in Budget 2025 (details supplied); and if he will make a statement on the matter. [41298/24]

Peter Burke (Longford-Westmeath, Fine Gael)
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As part of Budget 2025, I announced the Power Up Grant which builds on the success of the Increased Cost of Business Scheme. This scheme is for businesses in the hospitality, retail and beauty sectors who received a second payment of the ICOB grant. These businesses are now in line to receive a €4,000 Power Up Grant once they continue to meet the eligibility requirements.

As was the case with ICOB, a business must be rates compliant, however, a business in a performing payment plan agreed by the local authority may be deemed to be compliant. This is a matter for the relevant local authority as they are best placed to understand the specific circumstances in relation to any arrears.

Under Power Up, it is also intended that businesses who became rateable in 2024 may be eligible. Officials in my Department are currently working on final details and implementation of the new scheme.

The Increased Cost of Business Scheme (ICOB) which was open this year has successfully paid out over €243m to date to almost 75,000 SMEs right around the country, including over 38,000 SMEs in the retail and hospitality sector.

As the Deputy will be aware, any changes to the VAT rate are a decision for the Minister for Finance as part of the Budget process. While the 13.5% VAT rate applied to the Hospitality sector remained unchanged following the Budget, there were a number of enterprise tax measures announced in Budget 2025 which may be of relevance to businesses operating in the sector. These include:

• Changes to the CGT Retirement Relief to support intergenerational transfers;
• Raising the VAT registration threshold to €85,000 for goods and €42,500 for services;
• Enhancements to the Small Company Start Up Relief;
• Increasing the Small Benefit Exemption Limit to €1,500, and the number of benefits allowable from 2 to 5 annually;
• A €125 increase in the Earned Income Tax Credit.