In his Budget speech on 13th October 2020, the Minister for Finance announced his intention to introduce the Covid Restrictions Support Scheme (“CRSS”) as an additional support for businesses subject to significant Covid-19 restrictions. The scheme is intended to be in addition to the supports provided to employers under the Employer Wage Support Scheme (“EWSS”).
It is proposed that CRSS will be available to companies and self-employed individuals operating a business, profits from which are chargeable to tax under Case I of Schedule D. To qualify, the business must be:
- operating from a premises wholly located in a region subject to restrictions under the Government’s plan for living with Covid-19 “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.
From today, qualifying taxpayers will be able to log on to ROS and register for CRSS. The registration process will include providing details such as the location of the business and average weekly turnover for 2019. Once they have registered, a taxpayer will be able to make a claim for the period their business is restricted from operating. Revenue will publish guidelines on the registration process and on the operation of the scheme in due course.
The relief will operate as a cash payment equal to:
- 10% of the average weekly value of the 2019 business’s turnover up to €20,000
- 5% thereafter, subject to a maximum weekly payment of €5,000, for the same number of weeks as the restricted period.
The payment is known as an “Advanced Credit for Trading Expenses” and is taken into account when computing the profits and gains of the business under Case I of Schedule D as a reduction against deductible trading expenses. However, the receipt of the payment will only result in additional tax where the business is in a profitable position for the chargeable 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.
The Scheme will run from 13th October 2020 until 31st March 2021.
Prepared for ISME by: Byrne & McCall | Accountants & Tax Advisors | Tel: (01)612 0580 | Fax: (01) 620 5625 | email: [email protected] | www.byrnemccall.ie