The scheme operates for the periods of 1st September 2022 until 28th February 2023, claims are made in respect of each calendar month, and can be claimed through The Revenue Online Service (ROS) from December 2022
The scheme may possibly be extended by a further two months to the 30th April 2022 but this will be reviewed in the New Year.
Who can Qualify for the Scheme?
Businesses carrying out a trade or profession*, the profits from which are chargeable to tax under Case I or Case II of schedule D, some Sporting bodies and Charities that carry on certain activities, that would be chargeable to tax as trading income, but for an available tax exemption, all fall within the scope of the scheme
*A business considered to be an ‘eligible business’ can be a company, a self-employed individual or partnership carrying out a trade or profession - A Trade is normally considered such as a hairdresser, hotel, pub, restaurant, insurance broker, farmer, nursing home, travel agent etc.
Credit Institutions and financial institutions, public bodies and businesses engaged in passive activities (e.g., rental or investment income) are not an eligible business
How does my Business Qualify?
The scheme operates by reference to bills or statements for the metered supply of electricity and natural gas through electricity accounts or gas connections identified by its own Meter Point Reference Number (MPRN) or Gas Point Reference Number (GPRN)
To be eligible to make a claim under the TBESS in respect of an electricity bill or a natural gas bill, a business must be able to demonstrate that the average unit price for electricity or natural gas on the relevant bill has increased by 50% or more as compared to the unit price in the same period of the previous year
A qualifying business is entitled to claim a Temporary Business Energy Payment (TBEP) amounting to 40% of its eligible cost (subject to a cap for each monthly claim period). Claims must be made within 4 months of the end of the claim period
e.g., September 2022 must be claimed before 31st January 2023, October 2022 before 28th February 2023 and so forth
What Criteria does my business need to meet to claim?
Eligible businesses must be Tax compliant, having their tax affairs up to date, and so eligible for Tax Clearance Certificate throughout the claim period (you can check your T.C. Status on ROS)
Where a business has debt warehoused under the Debt Warehousing Scheme, the business will be treated as compliant for the purposes of the TBESS provided it continues to be eligible for the Debt Warehousing Scheme.
A business will also be treated as tax compliant where it has entered into a Phased Payment Arrangement (PPA) and is meeting its obligations under that PPA.
The Energy Cost Threshold Test
The energy costs threshold test is based on an increase of 50% or more in the average unit price of an electricity or gas bill as compared to the average unit price in a reference period. The ‘reference period’ is a calendar month that is 12 months prior to the claim period (calendar month) to which the relevant bill relates. For example, a claim in respect of an electricity or gas bill with a billing period covering September 2022 will be compared to the September 2021 reference period.
An eligible business will use a ‘deemed reference unit price’ in respect of a reference period where a comparative unit price, pertaining to the same electricity account / MPRN or gas connection/ GPRN, is not available.
This will be the case where for example:
(a) the business commenced to trade after the relevant reference period and so there are no energy bills for the reference period.
(b) the business has increased its geographic footprint by expanding into another location or relocated so that it has a new electricity account/ MPRN or gas connection/ GPRN and therefore no bills pertaining to that new MPRN or new GPRN in respect of the reference period.
Deemed reference unit prices will be provided by the Sustainable Energy Authority of Ireland (SEAI) in due course
How to Calculate the Unit Price
The Unit Price is calculated from the total bill charges (excluding vat) divided by the number of units consumed during the period
By adding the total units (all Units add Day/Night units together) in the example above the total Units is 1000
Then add the cost of all the charges except Vat - €330 + €17+ €1 + €13 = €361
Divide €331.00 by the 1000 units = €.0361 per Unit
Where a bill covers a period of more than 1 month you must calculate the amount days to which your bill refers and divide the total units by the amount of days covered by the bill then multiply by the number of days in your claim period
e.g., September 30 days, October 31 days etc.,
If your domestic & business energy charges are charged on the same bill, you must decide what % of the bill equates to the business only and claim for this % only
If your bill includes arrears from a previous period these cannot be included
If your bill shows a discount (such as paperless billing below) you must deduct this amount
The Amount that can be claimed under TBESS
Having determined the amount of the eligible cost in relation to an electricity or gas bill, a qualifying business will be able to make a claim for a Temporary Business Energy Payment (TBEP) of an amount equal to 40% of the eligible cost (subject to the monthly and Temporary Crisis Framework caps on payments). The claims for each bill can be made as the bills are received and a business may make more than one claim in any single claim period (for example, in the December 2022 claim period a business might have a claim for one or more electricity bills and one or more gas bills)
Monthly Cap
A monthly cap applies on the amount of payments that can be claimed under the TBESS in respect of the eligible cost relating to electricity and gas bills. For these purposes, a cap of €10,000 per trade generally applies. However, this figure may be increased to a maximum of €30,000 where a qualifying business operates across multiple locations.
e.g., A person that carries on, for example, a hairdressing trade from a single salon is entitled to claim up to €10,000 per month in respect of their eligible electricity and gas costs. Where, however, the person has several salons in different locations which are operated as a single hairdressing trade, the person will be eligible for an increased cap. In circumstances where, for example, a person carries on two trades including a hairdressing salon and a beauty salon, and each is considered a separate trade having regard to the facts and circumstances and as evidenced in financial accounts and tax filings, a cap of €10,000 for each trade would apply (where they are both qualifying businesses)
Increased caps (where a business has multiple MPRNs in connection with a single trade)
The maximum that can be claimed in respect of costs relating to a single electricity account/ MPRN in any
monthly claim period cannot exceed €10,000. Similarly, the maximum that can be claimed in respect of costs relating to a single gas connection/ GPRN cannot exceed €10,000 per month.
Where a business is operating its trade across multiple locations where it has multiple electricity accounts, each with their own MPRN and each having a separate electricity supply address. The increased cap only applies where a business has multiple MPRNs. Where it only has one MPRN and multiple GPRNs, the increased cap will not apply.
The cap will be increased by €10,000 per month for each electricity account/ MPRN held by the business in the claim period, subject to a maximum overall monthly cap of €30,000.
Where an increased monthly cap of €20,000 applies (if a business holds two electricity accounts in different locations), or an increased monthly cap of €30,000 applies (if a business holds three or more electricity accounts in different locations), this will be available as regards the eligible cost relating to both electricity and gas bills in the relevant monthly claim period (and not just the eligible cost of electricity bills).
It is important to bear in mind that, for the purposes of determining whether an increased monthly cap of €10,000 applies for each electricity account/ MPRN (up to a maximum of €30,000 per month), electricity accounts/ MPRNs that have the same electricity supply address (as identified on the relevant bills), or that have electricity supply addresses that are located adjacent to each other, will in each case be counted as having one electricity account. This means, for example, where a building, from which a large food retailer carries on its trade, has two electricity accounts/ MPRNs, the retail business will be regarded as having one electricity account/ MPRN and a monthly cap of €10,000 will apply.
Similarly, where as part of its hotel trade, a business has a hotel building with its own MPRN and a separate spa facility located in the grounds of the hotel with a separate MPRN, the business will be regarded as having one electricity account/ MPRN and the monthly cap applicable for the hotel trade (which includes the spa) will be €10,000 per month. Also, where as part of a retail trade a business has a retail outlet and an adjoining storage facility, each having their own separate MPRNs, the retail outlet and the storage facility will be regarded as adjacent, and the business will be treated as having one electricity account and a monthly cap of €10,000 will apply.
How to Register for TBESS and make a claim
A claim for a Temporary Business Energy Payment (TBEP) may be made through Revenue’s Online Service (ROS) by qualifying businesses in respect of their eligible costs.
A two-step process is necessary to make a claim under the TBESS. The eligible business must:
1. register for the TBESS on ROS, and
2. complete a claim in respect of a claim period
Registration
It is necessary to register for the TBESS via the eRegistration system on ROS.
It is important to note that the business must be eligible for a tax clearance certificate in order to successfully register.
When registering for the TBESS, eligible businesses are required to provide various details about their business and trade(s) or profession(s). They are also required to input certain data regarding their energy supply and whether they have an electricity account and/ or gas connection.
Particulars that will be required to make a claim
Further particulars from electricity and gas bills will be required when making a claim. The following particulars will be required in respect of the electricity and gas bills for both the reference period and the claim period:
• the invoice number,
• the start date and end date of the billing period of the electricity or gas bill
• the total amount of charges on the electricity or gas bill (exclusive of VAT)
• the total number of units of electricity or gas consumed during the billing period.
Lastly,
How is the TBEP treated for tax purposes?
As the TBEP reduces the amount of fixed costs (e.g., Heat/Light), the taxable trading profit is increased by the TBEP and tax is payable on the increased profit
If you are in doubt as to whether your business qualifies or you need assistance with the application for this scheme please contact your usual point of contact at Quintas or our reception on 021-4641400 or info@quintas.ie
Regards
Catherine Caplice
Management Account - Quintas
