Wednesday, 17 February 2021

Questions (151, 159)

Catherine Murphy

Question:

151. Deputy Catherine Murphy asked the Minister for Finance his plans to extend the stay and spend tax credit initiative beyond April 2021. [8409/21]

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Alan Dillon

Question:

159. Deputy Alan Dillon asked the Minister for Finance if he will provide information on the stay and spend scheme; the number of businesses registered; the total stay and spend receipt uploads for accommodation, food and accommodation and for food only; the value accrued on the scheme; and if he will make a statement on the matter. [8638/21]

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Written answers (Question to Finance)

I propose to take Questions Nos. 151 and 159 together.

The purpose of the Stay and Spend Tax Credit scheme is to provide targeted support to businesses within the hospitality sector whose operations are likely to be most affected by continued restrictions on public health grounds. In order to claim the Stay and Spend Tax Credit, taxpayers are required to upload a copy of their receipt(s) for qualifying expenditure to the Revenue Receipts Tracker and then make a formal claim for the tax credit when submitting their annual Income Tax Return.

Under the scheme a claim may be made in relation to qualifying expenditure incurred between the period 1 October 2020 and 30 April 2021. Broadly, qualifying expenditure includes expenditure on either holiday accommodation or “eat in” food and drink, with a minimum expenditure amount of €25 per transaction being required.

The scheme was developed at a time when there appeared to be a steady downward trend in infection rates, and there was an expectation that the re-opening of the economy could be sustained uninterrupted. Unfortunately, this has not been the case and, thus far, with the exception of some short periods, public health restrictions have had the effect of impeding the operation of the incentive as originally envisaged. Stay and Spend is scheduled to operate until 30 April but the flexibility exists for me to extend its operation in 2021 beyond that date (to end 2021). It is too early as yet to take definitive decisions in that regard. Much will depend on how circumstances unfold in the months ahead. As I have said before, I will keep an eye on how matters develop and the role that the scheme might play and consider if any changes need to be made.

Claims relating to qualifying expenditure incurred in the period from 1 October 2020 to 31 December 2020 can be made when an individual is submitting his/her 2020 Income Tax Return, which is now available for submission.

As at 10 February 2021, the number of business registered to take part in the Stay and Spend scheme is 3,137.

A total of 51,494 receipts have been uploaded by taxpayers to the Revenue Receipts Tracker and the expenditure recorded on these receipts amounts to €8,406,533. The potential tax cost is €1,681,307 assuming all such expenditure is claimed and qualifies in full for tax relief. Of the 51,494 receipts uploaded 9,917 relate to accommodation and food, 8,185 for accommodation only and 33,392 for food only.

As at 14 February 2021 a total of 7,799 claims have been included in 2020 Income Tax Returns. These claims relate to €2,755,230 of the qualifying expenditure recorded on the Revenue Receipts Tracker to date and the tax cost of same amounts to €551,046. However, as the filing deadline for the 2020 Income Tax Return is not until 31 October 2021, information on the total number of claims and cost for the 2020 year of assessment will not be available until after the filing date and the returns have been processed.

Subsequent to claims being made in respect of this new scheme and any other relief or deduction, verification of such reliefs and deductions forms part of Revenue’s comprehensive risk assessment programme.

It is important also to recall that Stay and Spend should not be viewed in isolation from the other measures put in place to support businesses generally and the hospitality sector in particular.

In recognition of the unprecedented challenges facing the Hospitality and Tourism sector, the VAT rate was reduced from 13.5% to 9 % from 1 November 2020. This is a temporary measure to provide support to the sector, where many businesses remain closed for now and those that are open are operating at significantly reduced capacity, and will apply from 1 November 2020 to 31 December 2021.

The Employment Wage Subsidy Scheme (EWSS) has been a key component of the Government’s response to the continued COVID-19 crisis to support viable firms and encourage employment in the hospitality and tourism sector and beyond. I have been clear that there will be no cliff-edge to the EWSS.

The Covid Restrictions Support Scheme (CRSS) is a targeted support for businesses significantly impacted by restrictions introduced by the Government under public health regulations to combat the effects of the COVID-19 pandemic. The support is available to companies, self-employed individuals and partnerships who carry on a trade or trading activities, the profits from which are chargeable to tax under Case I of Schedule D, from a business premises located in a region subject to restrictions introduced in line with the Living with COVID-19 Plan.

Businesses may also be eligible under the Debt Warehousing Scheme to ‘park’ certain VAT and PAYE (Employer) liabilities, excess payments received under the Temporary Wage Subsidy Scheme (TWSS), outstanding balances of self-assessed Income Tax for 2019 and Preliminary Tax for 2020.