In his recent Budget Speech, the Minister for Finance announced plans to introduce a new support scheme for businesses severally impacted by Government-imposed restrictions linked to the Covid Pandemic. The scheme involved businesses being able to claim a weekly payment based on their 2019 turnover levels assuming certain conditions applied.

The scheme is called the Covid Restrictions Support Scheme or “CRSS”. The Revenue published their preliminary guidance notes for this scheme including some examples – please see the attached. Please note that this guidance was issued before the move to ‘Level 5’ was announced and it is expected that further guidance will issue shortly.

Official Revenue Guidance for the Scheme

In the meantime, the following is a summary of the core points as well as some preliminary observations.

1. The business must be wholly located in a region subject to restrictions imposed by the Governments Plan for living with Covid-19 – “Resilience and Recovery 2020-2021:Plan for Living with Covid-19” – called simply ‘the Plan’ hereafter.
   
2. The restrictions must involve the business being required to prohibit – or severally restrict – the public/customers from accessing their premises. In practice this means that the Restrictions will fall within Levels 3, 4 or 5 of the Plan.
   
3. The impact of this temporary closure and/or restricted access must result in an 80% decline in turnover – i.e. the business’s turnover for that period cannot exceed 20% of the ‘average weekly turnover’ for 2019 (2019 AWT) for the same length of time. In crude terms, if the business is locked-down for 8 weeks then its turnover for that period must be 20% or less of 2019 AWT x 8 (i.e. 2019’s Total Turnover / 52 x 8).
   
4. The business can claim the ACTE within 8 weeks of the commencement of the restriction period – so if the business does not expect to meet the 80% reduction requirement and later finds that its turnover was less than they projected, they have 8 weeks to apply.
   
5. Businesses can register for the CRSS via ROS – the process will include providing details of their location, nature of their business etc as well as confirmation of their 2019 average weekly turnover. Details of the Registration process will issue shortly but it will probably involve the usual MyEnquiries Declaration via ROS. Note however that all applicants will be required to:
   – Ensure that they continue to file their tax submissions on a timely basis
   – Hold a valid eTCC (Tax Clearance Certificate)
   – Intend to resume trading once the restrictions are lifted.
   – Retain accurate records of their calculations.
   
   It is important that any business that has unpaid taxes formally deal with same either via the warehousing scheme or PPA immediately or an eTCC will not be available and they will not be able to take part in the scheme.
   
6. The Revenue reference that the first payments to be issued by mid-November but this is expected to be expedited in light of the move to Level 5.
   
7. The scheme started on 13th October and will run until 31st March 2021.
   
8. The cash payments will be based on 10% of the 2019 AWT up to €20k and 5% thereafter, with a weekly cap of €5,000.
   
9. The payments are called Advance Credit for Trading Expenses or ACTE and will subsequently be set against any trading costs incurred during the restriction period, but will only be taxable if the business was profitable during that period.
   
10. The Revenue reference the scheme as applying to businesses that are ‘chargeable to tax under Case I’. This could mean that anyone carrying on a profession will not be able to avail of the scheme as these are assessed via Case II and the Revenue have been careful to make this distinction in the past.
    
11. There is no example in the guidance or a business that could remain open but chooses not to. This raises a question over the entitlement of such businesses, for example if you serve take-away but decide to close anyway? If you remain open to on-line sales but then close?

There is no mention whether ‘new businesses’ can qualify – e.g. it they had no turnover in 2019 or if they only started trading late last year.

It is not clear at this stage if there will be legislation under-pinning this scheme or if the Revenue will be tasked with setting its parameters. Based on recent examples, it is safe to assume that the guidance will be updated regularly so expect changes over the coming days, weeks and month.