Let’s celebrate, this could very well be my last Covid subsidy related article! I hear everyone rejoicing and looking forward to some rather mundane articles on transfer pricing and the like.
It has been an extraordinary 2 years. I started writing these articles in the spring of 2020 and didn’t expect to still be writing them now. At the time we thought it might blow over after a few weeks. Of course, in hindsight that was never going to happen.
Unfortunately for some, it was only certain sectors who were hit really badly from the pandemic, most notably the hospitality sector. Your time has now come and I urge everyone to go spend their money in the many fine establishments we have dotted around our city and county. Don’t be shy, get out there!
The government subsidies played a big part in keeping these businesses open. Many had to reimagine how they were doing business and credit to them for that. Without the subsidies though I fear businesses across the country would be closed long ago. With a bit of luck, and with all your support, these businesses will get back on their feet.
CRSS
The CRSS was reopened from 21 December 2021 for any business affected by the new restrictions at the time. These restrictions were essentially where members of the public were either prohibited or restricted from accessing a business premises. The most obvious example is a pub that was forced to close at 8pm. For a business to qualify they also needed at least a 60% reduction in turnover based on the average turnover for the same number of weeks in 2019 (the base period). This base period can be different for businesses who set up after 26 December 2019.
The payment will be equal to
- 10% of their average weekly turnover in 2019 for the first €20,000 of turnover, and
- 5% of their average weekly turnover in 2019 for anything above €20,000
- The maximum weekly payment is €5,000.
The claim must be made within 8 weeks of the claim period commencing, so 8 weeks from 21 December 2021. The CRSS has ceased on 22 January 2022, however all qualifying companies will be entitled to an additional restart week once they come off the scheme.
There is little point in going into any more detail than this, for those businesses who qualify will be all to familiar with the rules and regulations of the scheme.
EWSS
A quick update on my most recent article on this. The higher rate has been extended to now include February for businesses affected by the restrictions that came into force on 21 December 2021. Bars, restaurants, theatres, sporting venues and operators of indoor events (including wedding venues) should benefit from this (amongst others). The rate will then decrease in March and decrease again for April and May (so an additional months EWSS for those businesses effected by the December 2021 restrictions). Employers PRSI will kick in fully from 1 March.
For restaurant worker on a weekly salary of €400, their employer will be entitled to a subsidy of the following:
- €350 in January and February,
- €203 in March and
- €100 in April and May.
Debt Warehousing
For any business in receipt of a subsidy claim for the period 1 January 2022 to 30 April 2022 they will be entitled to warehouse tax debt up to 30 April 2022. For all other businesses the ability to warehouse debt ended on 31 December 2021. Remember you have a 12 month interest free period before the debt becomes due. When it does, each company will have the option to repay the debt or to enter into a payment proposal with Revenue and avail of a 3% interest rate.
Fingers crossed this is the end of pandemic and the associated subsidies. While I realise some businesses could have done with the subsidies lasting longer, in the main I think the government did a good job with these. They were overly complicated to begin with but in the end they got it right.
Onwards and upwards from here. Support your local businesses as much as you can.
Thanks and best of luck to all.
Dave O'Brien
Tax Partner
