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Ireland Launches New Business Resumption Support Scheme

Ireland Launches New Business Resumption Support Scheme
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Ireland Launches New Business Resumption Support Scheme

In a bid to help businesses in Ireland to recover from the economic restrictions put in place during the pandemic, the Irish Government has launched the Business Resumption Support Scheme (BRSS), the main points of which are summarised here.

Introduction

The BRSS, announced under the Government’s Economic Recovery Plan for Ireland, will support businesses that were significantly impacted throughout the COVID-19 pandemic, even during periods when restrictions were eased. This is subject to certain qualifying criteria, including that they can demonstrate a significant reduction in trade in the year from 1 September, 2020 to August 31, 2021.

Under the scheme, successful applicants will be able to make a claim to the Revenue Commissioners for a payment known as an Advance Credit for Trading Expenses (ACTE).

Details of the BRSS are included in the Finance (Covid-19 and Miscellaneous Provisions) Bill 2021 and applications may be made until November 30, 2021.

Qualifying Criteria

To claim an ACTE payment, a business must show that its turnover in the period from September 1, 2020, to August 31, 2021, was no more than 25 percent of turnover during a comparable period, known under the scheme as the “reference period”. The comparable period will be either a prescribed period in 2019 or 2020 depending on when the business was established.

The BRSS is available to businesses that carry on a trade or trading activities, including companies, sole traders, or self-employed individuals and partnerships, provided their business profits are subject to tax under Case 1 of Schedule D of the Taxes Consolidation Act of 1997. The scheme is also available to certain charities and sporting bodies that carry on a trade, the profits from which would be chargeable to tax but for available income and corporation tax exemptions.

Further, businesses must be in possession of a valid tax clearance certificate confirming their tax affairs are in order. Also, they must be actively trading (or intending to actively trade) and not be eligible to make a claim for the COVID-19 Restrictions Support Scheme for any week that includes September 1, 2021.

Scheme Rates

The ACTE payment will be calculated as three times the sum of: 10 percent of the average weekly turnover of the reference period up to EUR20,000 and 5 percent of the average weekly turnover of the reference period that exceeds EUR20,000. ACTE payments will be capped at EUR15,000.

Other Considerations

Businesses may apply for an ACTE payment even though they may have claimed under the Government’s various other COVID-19-related support schemes. However, it is also worth noting that the Revenue will publish a list of businesses who claimed an ACTE when the scheme concludes. Also it should be noted that where a profitable business receives an ACTE payment, it may lead to an increased corporation tax liability for that year as the amount of tax deductible expenditure for that year will be reduced by the amount of ACTE received.

Irish Companies WP CTA

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