The Finance Bill and the stimulus plan (July 2020) introduced certain tax and financial measures to support Irish businesses adversely affected by the coronavirus (COVID-19) pandemic.
One of these support measures—the COVID restrictions support scheme (CRSS)—is specifically aimed at sectors that have been affected by the restrictions set out in the “Living with COVID-19” plan. The CRSS provides for a weekly cash payment to be made to affected businesses that meet the qualifying conditions.
Beginning from 17 November 2020, qualifying businesses can make a claim for a payment under the CRSS. There is a two-step process for claiming the relief: (1) registration for the CRSS, and (2) submission of a specific claim for relief. Under CRSS, a business can make a claim to Irish Revenue for a cash payment based on the business’ average weekly turnover. Specific rules apply to determine a business’ average weekly turnover depending on when the business commenced. Broadly, the weekly cash payment under CRSS is calculated as the sum of:
There is a cap for weekly CRSS payments of €5,000 per week.
From 17 November, eligible businesses can make a claim for the current COVID-19 restrictions period up to 1 December 2020. The start date for the claim will depend on the level of restrictions that were in place in the area of the country where the business operated during October, with 13 October (the date that the CRSS was announced) being the earliest start date.
For example, if an eligible business was affected by Level 3 restrictions announced by the government in early October 2020, it would be eligible for a CRSS payment for a seven-week period from 13 October to 1 December.
To be entitled to participate in the scheme, the following key qualifying conditions need to be satisfied:
Specific rules apply in calculating the 25% limit on turnover. For established businesses, the average weekly turnover in 2019 must be compared to turnover during the restricted period. The business must be able to demonstrate that, as a result of having to close the premises to customers for the restricted period, the turnover of the business activity during the restricted period will be no more than 25% of average 2019 weekly turnover multiplied by the number of weeks in the claim period.
For example, a retail business with average weekly turnover of €3,000 in 2019, is closed for a six-week period during Level 5 restrictions but undertakes online sales during this time earning €2,000 in total over the six-week period. The €2,000 earned in the six-week period must be compared to the “normal” expected earnings based on 2019 of €18,000 (€3,000 x six (6) weeks). The online sales results in 11% of the 2019 average turnover and on this basis the reduction in turnover test must be satisfied.
In calculating the 25% turnover limit, specific rules apply to newly established businesses, businesses that do not operate on a calendar year-end and in circumstances where different business locations are subject to different COVID-19 restrictions.
Read a November 2020 report prepared by the KPMG member firm in Ireland
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