The Minister for Finance announced the introduction of the Covid Restrictions Support Scheme (“CRSS”) in his Budget last week which is currently due to run from 13 October 2020 until 31 March 2021.
This support is in addition to the Employer wage supports and is intended to support businesses who are subject to significant Covid-19 restrictions. The Revenue Commissioners have now issued a short overview of the scheme with a promise that they will publish guidelines on the registration process and on the operation of the scheme in due course.
It is proposed that the CRSS will be available to companies and self-employed individuals operating a business, the profits from which are chargeable to tax under Case I of Schedule D. This normally extends to Trades but interestingly seems to exclude Professions which are taxed under Case II. To qualify, the business must be operating from a premises wholly located in a region subject to restrictions under the Government’s “Resilience and Recovery 2020-2021 : Plan for Living with Covid-19”, with the result that the business is required to prohibit or considerably restrict members of the public from accessing their business premises. Generally, the restrictions apply at Level 3, 4 or 5 of the Plan for Living with Covid-19 but, in the case of certain businesses could apply at lower levels of restrictions.
Where, as a result of the restrictions, a business has been required to temporarily shut their premises or operate at significantly reduced levels, with the result that turnover for that period will be no more than 20% of the average weekly turnover for a period equal to the same number of weeks in 2019 (or using 2020 turnover figures for new businesses), that business will qualify under the scheme and it should be noted that if the business has a number of business premises, they are treated as separate activities for the purposes of CRSS.
The relief will operate as a cash payment known as an “Advanced Credit for Trading Expenses” and is equal to 10% of the average weekly value of the 2019 business’s turnover up to €20,000 and 5% thereafter, subject to a maximum weekly payment of €5,000, for the same number of weeks as the restricted period.
Qualifying Individuals or Companies will be able to register under the Revenue On-Line system shortly which will include providing details such as the location of the business and the average weekly turnover for 2019. They will be able to submit claims from mid-November with such claims to be made within 8 weeks of the commencement of the restricted period. The scheme will operate on a self-assessment basis and is conditional on the taxpayer continuing to file all tax returns on time, holding a current tax clearance certificate and on the intention to resume the business when the restrictions are lifted. Details of taxpayers availing of the scheme will be published on the Revenue website at a later time.
Mairead O'Grady, Tax Partner with RBK commented, "there are currently initiatives for businesses providing assistance towards staff wages, rates, etc, but this is a welcome initiative to businesses severely affected by the Covid 19 pandemic who have lots of other business overheads for which no other relief is available to them."
Update - 4th November 2020:
Revenue’s formal guidelines on the CRSS scheme have now been published and can be accessed here: https://www.revenue.ie/en/corporate/press-office/budget-information/2021/crss-guidelines.pdf.
The registration process for the scheme is now live in ROS and can be accessed via the ‘Manage Tax Registrations’ screen.
To discuss how your business can avail of the Covid Restrictions Support Scheme, contact:
- Mairead O'Grady, Taxation Partner, E: email@example.com