Revenue have now issued guidelines on businesses registering and applying for the Temporary Business Energy Support Scheme.
Features of Scheme
The scheme will cover costs of gas and electricity between the period 1 September 2022 to 28 February 2023. Businesses can make claims through the Revenue Online Service (ROS) from 5 December 2022.
Log into ROS and select ‘Mange Tax Registrations’, ‘TBESS’, Select ‘Register’.
Who can apply?
A business will be considered an ‘eligible business’, and therefore within the scope of the TBESS, where it is a company, self-employed individual or partnership carrying on a trade or profession. Sporting Bodies and Charities are also included as eligible businesses. Credit institutions and financial institutions are not eligible businesses.
To be eligible to make a claim under the TBESS, a business must be able to demonstrate that the average unit price for electricity or gas on the relevant bill has increased by 50% or more, compared to the 12 months prior. This is known as the ‘Energy Cost Threshold’.
The business must be eligible for a tax clearance certificate and has complied with their tax registration, payment and tax return filing obligations
The scheme operates on a self-assessment basis. A person registering their details and the details of their business activity for the purposes of a making a claim should retain evidence supporting their basis for making a claim under the scheme, which may be requested by Revenue under future eligibility checks. In some instances, supporting documents may be required as part of the claim process.
Example of Calculation
A qualifying business is entitled to claim a Temporary Business Energy Payment (TBEP) amounting to 40% of its eligible cost (subject to a cap for each monthly claim period). A claim for a TBEP must be made within 4 months of the end of the claim period to which a particular electricity or gas bill relates.
The eligible cost is calculated as the increase between the bill amount compared to a bill amount in the 12 months prior. Where a bill covers only part of a claim period then it will be compared with a proportionate amount of the costs for the 12 months prior in determining the eligible cost amount
The TBEP is subject to a monthly cap, which applies on a per trade basis or a per profession basis. In general, the support available in respect of electricity and gas costs is subject to a monthly cap of €10,000 per trade or profession.
Where, however, a business carries on its trade or profession from more than one location, as identified by the business having multiple electricity accounts/ MPRNs in different locations, the cap may be increased by €10,000 per electricity account/ MPRN, subject to an overall monthly cap of €30,000 per trade. The increased cap is available in relation to both electricity and natural gas costs relating to the trade or profession.
Where the claimant has relevant outstanding tax liabilities, the provisions of the TBESS legislation allow for the offset of a TBESS claim against those outstanding tax liabilities.
In effect, normal offsetting rules will apply in relation to amounts payable under the TBESS, that is, the TBEP will first reduce tax liabilities where any are outstanding and then the balance will be paid to the business. Where a business is availing of the Debt Warehousing Scheme and continues to satisfy the conditions of Debt Warehousing (i.e. filing their returns and making payments on time), the offsetting rules will not apply to the tax liabilities that have been warehoused. Similarly, the offsetting rules will not apply to tax liabilities that a business is paying under a Phased Payment Arrangement (PPA) where it is meeting its obligations under that PPA.
Please note this article is for information purposes and does not constitute advice. Details correct at time of publishing.