Government supports overview

The summary below outlines the key supports that have been put in place by government to assist businesses through the challenges caused by the COVID-19 pandemic, including the latest measures introduced in light of increased restrictions and the elements of Budget 2021 that are relevant to tourism and hospitality businesses.

As a member of the tourism industry, we know you have a lot of urgent questions about how COVID-19 is affecting your business, on everything from Government support to crisis management. This section is designed to help steer you through these uncharted waters and remind you that you’re not alone in this.

A. Support scheme updates due to implementation of level 5 restrictions from midnight Wednesday October 21

1. PUP Scheme

In relation to PUP, the Government has now introduced a fourth rate of payment for people whose gross earnings were €400 per week or higher prior to the pandemic.

They will now receive €350 in their PUP payment each with the rate change taking effect for all new applications received since Friday, 16th October.

Existing PUP recipients who previously earned more than €400 per week will have their PUP rate automatically increased and will receive the higher rate of €350 in next week’s payment run.
The other three rates of PUP payment (€203, €250 and €300) remain unchanged.

New applicants are being urged to apply online at www.mywelfare.ie

2. Employment Wage Subsidy Scheme revised rates

The Employment Wage Subsidy Scheme is being enhanced, with a maximum rate now payable at €350, bringing it in line with revisions that are being made to the Pandemic Unemployment Payment.
The objective of this move is to minimise the risk of migration from EWSS to PUP during enhanced level restrictions. To the maximum extent possible, the aim is to have as many as possible of the 350,000 employees currently on EWSS retain their link with their employer rather than become unemployed.

Revised Rates: Gross weekly pay

Less than €151.50 Nil
€151.50 – €202.99 €203
€203 - €299.99 €250
€300 - €399.99 €300
€400 - €1,462 €350
Over €1,462 Nil

Previous rates:

Under EWSS there have been three weekly payment rates/bands benefiting just below 350,000 employees as follows:

1. 0 - €151 = €0
2. €151 to €203 = €151
3. €203 - €1,462 = 203

The revised scheme will run to end January 2021.

3. COVID Restrictions Support Scheme (CRSS)

The COVID Restrictions Support Scheme (CRSS) is designed to assist businesses whose trade has been significantly impacted or temporarily closed as a result of the restrictions as set out in the Government’s Living with Covid-19 Plan.

As the country is facing into a period of greater restrictions nationwide, this will see a greater range of businesses who will be impacted. Minister Donohoe has therefore decided to make a further enhancement to allow more businesses access the scheme.

Enhancements include:

For businesses continuing to trade, they may qualify if their turnover does not exceed 25 per cent of the turnover for the corresponding period in 2019.

The sectors who can now avail of the CRSS include accommodation, food, the arts, recreation and entertainment, non-essential retail and hair and beauty.

B. Budget 2021: Key measures for tourism & hospitality businesses

1. VAT

The VAT rate for the hospitality and tourism sector will be cut from 13.5% to 9% with effect from November 1 until 31 December 2021.

The 9% VAT rate will apply to the following:

  • Catering and restaurant supplies, including take-away food (excluding alcohol and soft drinks sold as part of the meal)
  • Hotel lettings, including guesthouses, caravan parks, camping sites etc.
  • Cinemas, certain musical and theatrical performances, museums, art gallery exhibitions, built and natural heritage, open farms
  • Admissions to fairgrounds or amusement park services
  • Facilities for taking part in sporting activities including green fees charged for golf and subscriptions charged by non-member-owned golf clubs
  • Printed matter e.g. newspapers, brochures, leaflets, programmes, maps, catalogues, printed music (excluding books)
  • Hairdressing services

2. COVID Restriction Support Scheme (CRSS)

  • A new scheme to provide targeted support for businesses worst hit by Level 3 C-19 controls. The scheme will be effective from Budget Day until 31 March 2021.
  • To qualify on the basis of reduced turnover, that turnover cannot exceed 20% of the 2019 turnover (e.g. to cover take-away/outdoor only in restaurants) or in the case of new businesses 20% of 2020 turnover.
  • Payments will be calculated on the basis of of average VAT exclusive turnover for 2019. They work out as follows:
    • 10% of annual turnover up to €1m (1/52),
    • 5% of annual turnover above €1m (1/52), and
    • to a maximum of €5,000;
  • Accommodation, food services, arts entertainment others to benefit.
  • Qualifying businesses can apply to the Revenue Commissioners for a cash payment in the form of an advanced tax credit for trading expenses for the period of restrictions.

3. Employment Wage Subsidy Scheme (EWSS)

To be extended beyond March 2021 with details to follow.

4. The Recovery Fund

The Recovery Fund will be targeted and will help to stimulate increased domestic demand and employment.

Given the evolving nature of COVID-19 and Brexit, the Fund will be flexible in its design in order to provide Government with the means to react swiftly to a constantly changing environment.

It will focus on three main areas:

  • infrastructure development
  • reskilling and retraining
  • supporting investment and jobs.

The Recovery Fund is worth €3.4 billion.

5. Tourism

a) Tourism Business Support Scheme €55mn

b) Tourism Product Development €5mn

6. Some other general business supports

a) Extension of the commercial rates holiday until the end of this year.

b) €1.1bn to the Department of Enterprise, Trade and Employment to support local enterprise, SMEs. Money also to be used to fund the Credit Guarantee Scheme and the Future Growth Loan Scheme.

7. Greenway

Greenway investment flagged.

8. Insurance

Insurance reforms to stay on the agenda

9. Regarding the arts

a) €50m will be provided in Live Entertainment Supports and

b) Arts Council funding is increasing to €130m, up €50m

C. Amendments to the Pandemic Unemployment Payment

Pandemic Unemployment Payment

Following recent government announcements, the Pandemic Unemployment Payment will be amended as follows:

From 16 October 2020 until 31 January 2021 the COVID-19 Pandemic Unemployment Payment will be paid at 4 rates.

This rate change was announced on 19 October. It is effective from Friday 16 October, therefore payments made on Tuesday 27 October will include the new rate of €350.

  • if you earned €400 or more - you will receive €350
  • if you earned between €300 and €399.99 per week - the rate of the COVID-19 Pandemic Unemployment Payment is €300 per week
  • if you earned between €200 and €299.99 per week - the rate of the COVID-19 Pandemic Unemployment Payment will be €250 per week
  • if you earned less than €200 per week - you will receive €203 per week, which is the same as the primary rate of Jobseeker's Benefit

From Feb 1st, 2021

  • Those who earned €200-€300 pre-pandemic will move from the €250 Pandemic Unemployment Payment rate to Jobseekers' Benefit of €203.
  • Those who previously earned over €300 will see their PUP payment fall to €250.

From April 1st, 2021

The remaining PUP claimants will be required to apply for the standard Jobseekers’ Allowance, and the PUP scheme will be closed.

Additional details can be found on the government website.

Please note that the scheme will close to new applicants at the end of 2020.

D. Tax Considerations

1. Income Tax Relief

  • A change will be made to provide for a new once-off income tax relief for self-employed individuals carrying on a trade or profession who were profitable in 2019 but, as a result of the Covid-19 pandemic, incur losses in 2020.
  • These provisions will allow such individuals to claim to have those losses (and certain unused capital allowances) up to a maximum amount of €25,000 carried back and deducted from their profits for the tax year 2019. This will reduce the amount of income tax payable in respect of those profits.
  • The provisions will also allow for claims for the relief to be made on an interim basis to give a cash flow boost to those taxpayers during 2020.

2. Corporation Tax

  • As above, businesses who pay corporation tax that were profitable in 2019 but incurred a loss due to the Covid-19 pandemic in 2020 will be able to claim a refund of tax paid of some or all of corporation tax paid.

3. Tax Warehousing

  • VAT and PAYE (employer) deductions
  • Liabilities incurred during restricted trading and the first bi-monthly VAT period after a business has resumed trading will be parked for a period of 12 months
  • Non-Covid related debts will be charged at a low interest of 3% p.a.
  • Business contacts Revenue
  • Helps with cashflow difficulties

Please contact Revenue to discuss warehousing debt and to find turther details on the scheme.

E. Restart Grant Plus

1. Overview of the grant

  • A further €300m is being provided to businesses through the enhanced Restart Grant Plus.
  • The grant will be based on the amount of the rates assessment for the premises for 2019 (excluding arrears) with a new minimum grant of €4,000 and a maximum grant of €25,000 (Increased from €2,000 min and €10,000 max).
  • Eligible firms now include medium-sized firms and independent hotels with up to 250 employees, as well as small firms (increased from 50 employees).
  • Businesses impacted by a 25% reduction in turnover will be eligible provided they commit to reopening and to hiring and sustaining employment.
  • A turnover of up to €25m is now allowable, increased from €5m. There is a cap of €100,000 turnover per employee.
  • Commercial sports businesses and trading charity shops in rated premises can now apply for the grant.
  • The hospitality sector, restaurants, pubs, activity centres and tourist attractions, for example, galleries, museums, are eligible if they are operating from a rated premise.
  • Under the revised Restart Grant, support will also be provided for enterprises that could not access the original grant scheme. Non-rated B&Bs and rateable sports businesses will be eligible for a grant payment of €4,000.

 

2. How to access the grant

Applications for the Restart Grant Plus are available through the Local Authorities.

Non-rated B&Bs will be eligible to apply to Fáilte Ireland.

F. Enterprise Support Grant

Enterprise Support Grant for Self-Employed Business Owners

  • The Enterprise Support Grant is available to assist eligible self-employed business owners with a once-off grant of up to €1,000 to restart their business which was closed due to the COVID-19 pandemic.
  • The Grant will be awarded to self-employed people who:
    • are tax and PRSI compliant
    • are not liable for commercial rates
    • have been in receipt of the COVID-19 Pandemic Unemployment Payment and have closed their claim on or after 18 May 2020
    • have reopened their business which was closed due to the pandemic
    • employ less than 10 people
    • have an annual turnover of less than €1 million
    • are not eligible for the COVID-19 Business Restart Grant or similar COVID-19 business restart grants from other government departments
    • can produce VAT receipts/invoices in respect of business restart costs and expenses claimed, if requested to do so by the department.
  • Funding will be awarded for eligible costs up to a maximum of €1,000. Grants will be awarded on costs related to reopening your business, including safety measures, business advice or mentoring, repairs, fuel, and wages. Normal business costs are not generally included.
  • Find details of the scheme, including application forms, on the government website. Application forms must be returned to your local Intreo office.

 

 

 

G. Commercial rates waiver

Commercial rates waiver

  • A 100% waiver, in the form of a credit in lieu of commercial rates will be applied to the rate accounts
    of all businesses, for a further three month period, up to the end of 2020.
  • There is no application required for the waiver. Local authorities should automatically apply a 100% credit in lieu of commercial rates, for a six-month period, to classes and categories of occupied rateable property where the occupying business is not in an excluded category.
  • The waiver is applied automatically and no direct individual notice to ratepayers will be issued.
  • If you have already paid your rates bill for 2020, a refund or a credit towards the 2021 bill will be
    arranged by the relevant local authority

Businesses should contact their Local Authority directly with any queries relating to the scheme.

Microfinance Ireland/Local Enterprise Office loans

Microfinance Ireland/Local Enterprise Office Loans

A package of liquidity and enterprise investment measures worth €55 million will be put in place to support small and micro companies through additional resources for MicroFinance Irelandand the Local Enterprise Offices.

This will include measures to reduce interest rates on lending for micro and small businesses, including grants equivalent to 0% interest on the first year of SBCI and MFI loans.

Talk to a Business Advisor in your Local Enterprise Office for more information.