Another month and another government financial support scheme for businesses who need it becomes live. From 1 September businesses who qualify will be entitled to this one off payment, which is a maximum of €15k.

Who Qualifies?

Businesses who can demonstrate their turnover in the period 1 September 2020 to 31 August 2021 will be no more than 25% of a reference turnover amount. In other words the turnover must be down 75% compared to the calendar year 2019 (for businesses who commenced in 2019 or before). If your business commenced before 26 August 2020 then you may still qualify but any business who  commenced after 26 August 2020 will not qualify.

How do you calculate what you are entitled to?

The scheme works similar to the CRSS in terms of doing the calculation. The one off payment will be equal to the following:

• 10% of average weekly turnover for 2019 up to €20,000
• 5% of any excess average weekly turnover above €20,000
• Add the above together and multiply by 3
• Payment is maxed at €15,000

Example

A long established hotel had turnover of €3m in 2019. Its average weekly turnover was €57k. It has remained mostly closed during the period from 1 September 2020 to 31 August 2021. The business qualifies for the BRSS as its turnover is down 75% compared to 2019. It can get 10% of its first €20k (€2k) of weekly turnover and 5% of everything above that (€1,850) [€57k-€20k)*5%]. You add the €2k plus the €1.85k and multiply your answer by 3 giving a total payment of €11,550.

Any other conditions?

Nothing too onerous. As with all other supports tax clearance is necessary for a business to claim the BRSS. The business must be trading at 1 September in order to make the claim. The business must no longer be claiming the CRSS.  All claims to be made on ROS from 1 September.

Anything else to be made aware of?

• Charities and sporting bodies may make a claim even if their income is exempt from income or corporation tax.

• The claim relates to a relevant business activity. You can make a separate claim for each relevant business activity. For instance, if you have a coach business and a restaurant trading out of the one entity then you can make 2 separate claims as they are each a relevant business activity. However, if you have 2 separate hotels operated through a single entity then you can only make one claim as they would be considered the same business activity. Of course, if each hotel was traded through a separate entity, then each entity can make a claim.

• Seasonal businesses which have closed on 1 September will not qualify – the business must be trading on 1 September.

• The scheme may apply for businesses who have undergone a corporate restructure, but you will need to review how this restructure was completed before making the claim.

• The scheme may also apply if the business has been transferred to the next generation, but again caution needs to be advised here as in order to qualify the transferor must have been eligible to claim retirement relief on the transfer to the child.

• All businesses who avail of the scheme will be listed on the Revenue’s website.

As ever if you have any questions on this scheme please contact me or your usual contact within Quintas.

Kind Regards,

Dave O'Brien

Tax Partner