In response to the ongoing COVID-19 pandemic, the Government introduced a number of jobs stimulus measures which included the introduction of the Stay and Spend Tax Credit scheme.
Under the scheme, an income tax credit equal to 20% of “qualifying expenditure” incurred from 1 October 2020 to 30 April 2021 is available subject to certain limits and conditions. The credit can be offset against a liability to income tax and universal social charge (USC).
Qualifying expenditure includes expenditure incurred on accommodation, food and non-alcoholic drink provided by a qualifying service provider. Food and drink provided on a “take-away” basis is not a qualifying service. There is a minimum spend of €25 on qualifying expenditure in a single transaction in order to qualify.
You can claim up to €125 which is the maximum tax credit available under the scheme, meaning that you must spend an amount of €625. For jointly assessed couples, this is doubled with the maximum credit available of €250.
Once all businesses are registered in the next month, you can review the list of qualifying service providers to check that your accommodation or food and drink provider is participating in the scheme.
Making a claim for the Stay and Spend tax credit
Claims for the tax credit must be supported with proof of the qualifying expenditure incurred. It is therefore necessary to ensure you keep receipts and that the receipt clearly identifies any qualifying and non-qualifying services separately. There are a number of ways in which the credit can be claimed depending on whether you pay tax through PAYE or you are self-employed. All receipts backing up the claim must be submitted to Revenue in advance of making the claim.
Revenue is in the process of developing a new app that will allow you to submit a copy of receipts directly to revenue.
All claims for expenditure incurred in this period must be made on or before 31 December 2024.
In order to qualify as a service provider under the scheme you must:
- provide qualifying services
- be VAT-registered
- hold a current tax clearance certificate
- be registered with Fáilte Ireland (for accommodation service providers only)
- register for the Stay and Spend scheme with the Revenue Commissioners.
In order to obtain Tax Clearance, a company’s tax affairs must be kept up to date. Any companies who have not previously been required to apply for Tax Clearance, or whose clearance may have expired, are advised as an initial action to apply for Tax Clearance as soon as is possible if considering to register as a qualifying service provider. In the event the company’s tax affairs are not up to date, the company is advised to engage with the Collector General as soon as possible.
If a holiday accommodation provider has not yet registered or listed their business with Fáilte Ireland, there is time to do so before the commencement of the Stay and Spend scheme on 1st October.
Finally, the registration process for the Stay and Spend Scheme with the Revenue Commissioners opened on Friday 28th August 2020. After registering, you will receive a certificate confirming your status as a qualifying service provider in your ROS inbox. You will then be included in Revenue’s list of qualifying service providers which is publicly available.
Following registration, you can review that your business is noted as a qualifying service provider by checking if included on the list of qualifying service providers.
Individuals are required to submit a copy of their receipt when making a claim for the tax credit and therefore Service providers should issue receipts clearly showing:
- the name of the business, and
- an itemised breakdown of the services provided
The itemised breakdown should enable the qualifying and non-qualifying expenditure to be clearly identified.
Where a bill is split between two or more customers, each customer should receive an individual receipt. This receipt should show the share of expenditure incurred by each customer.
In conclusion, this is a welcome incentive and it is important that all Hotel and Hospitality Service Providers are registered for the Scheme to ensure that their customers can avail of the Tax Credit.
Please do reach out to your RBK contact if you would like to discuss further any aspect of the Stay and Spend Credit, or contact a member of our Tax team on (01) 6440100 / (090) 6480600:
- Sinead McMahon, Taxation Director
- Mairead O’Grady, Taxation Partner