Stay and Spend Tax Credit

As announced in the July Stimulus Package, a new income tax credit has been introduced for 2020/2021.
The new Stay and Spend credit will be available to taxpayers who incur qualifying expenses from 01st October 2020 – 30th April 2021.

Qualifying Expenditure

Qualifying Expenditure includes holiday accommodation in Ireland and ‘eat-in’ food and drink, excluding alcohol. Holiday Accommodation must be registered or listed with Fáilte Ireland. There is a minimum spend of €25 required to qualify.

The Stay and Spend scheme has been introduced to encourage people to support the domestic tourism sector, opening the scheme only to those holiday accommodation providers who are registered or listed with Fáilte Ireland ensures minimum standards with regard to the relevant health and safety standards and protocols and other best practice and governance matters.

If non-alcoholic drinks are provided on a “sit-in” basis without any food, for example, a number of hot drinks, the cost will not be qualifying expenditure regardless of whether or not the minimum spend requirement of €25 is met. If food is provided with the hot drinks, both the hot drinks and the food will be a qualifying expenditure, subject to the combined cost meeting the minimum spend requirement of €25.
Taxpayers must submit a copy of the receipt to Revenue through their new Revenue Receipts Tracker App or Receipts Tracker service online. Details must be included such as the name of the service provider, type of service, and total expenses incurred. The Tracker app will be available to download shortly.

How does it work?

The Stay and Spend tax credit is equal to the lesser of:

• 20% of the qualifying expenditure incurred between 1 October 2020 and 30 April 2021; and
• €125 per person or, in the case of married persons or civil partners who are jointly assessed to tax, €250.

This means that qualifying expenditure over the life of the Stay and Spend scheme is capped at €625 per person or, in the case of married persons or civil partners who are jointly assessed to tax on that basis, €1,250.

The Stay and Spend tax credit will be offset against the taxpayer’s income tax liability in the year of assessment and will be applied after all other allowances, deductions or reliefs have been given to the taxpayer.

If the credit available to a taxpayer is higher than their income tax liability in the year of assessment, any excess credit may be offset against their liability to USC in that same year. Details of expenditure that were stored in the Receipts Tracker app will be available to the taxpayer when completing his or her annual tax return (i.e. the amount will be used to prepopulate the income tax return).

Limits and Conditions

• No requirement for taxpayers to be on a ‘staycation’ to avail, can be in taxpayers’ own local area.
• A list of all qualifying service providers who are participating in the scheme will be available on Revenue’s website in due course

Eligible Service Providers

Service providers will be eligible to complete Revenue’s Stay and Spend registration process if their business fulfills all of the following criteria:

1. the business provides qualifying services (i.e. holiday accommodation or “sit-in” food and non-alcoholic drink);
2. the business is registered for Value Added Tax (“VAT”); and
3. the business holds tax clearance.

If the business is eligible to participate in the scheme it must then register with Revenue as a qualifying service provider. This is a very quick and simple process. . This registration process will open on Friday 28th August 2020.

While you are here, read our previous blogs here