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Covid-19 Pandemic Supports

Dáil Éireann Debate, Wednesday - 3 March 2021

Wednesday, 3 March 2021

Questions (220)

Richard Boyd Barrett

Question:

220. Deputy Richard Boyd Barrett asked the Minister for Finance the supports available to small start-up businesses that have not begun trading yet but have been attempting to start up in the midst of the Covid-19 crisis; if directors of such start-up companies can avail of any income supports; if a company (details supplied) that is attempting to trade since the crisis can avail of funding supports under current Covid specific supports for businesses; and if he will make a statement on the matter. [11950/21]

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Written answers

The main direct Covid-19 supports under the aegis of my Department and the Revenue Commissioners are the Employment Wage Subsidy Scheme (EWSS) and the Covid Restriction Support Scheme (CRSS).

The EWSS was legislated for under the Financial Provisions (Covid-19) (No. 2) Act 2020. The scheme is an emergency measure to deal with the impact of the Covid-19 pandemic on the economy and to deliver an enterprise support to employers based on business eligibility delivering a per-head subsidy on a flat rate basis.

The EWSS is administered by Revenue on a 'self-assessment' basis. The eligibility criteria for EWSS states that in addition to having tax clearance for the duration of the scheme, an employer must be able to demonstrate that their business is expected to experience a 30% reduction in turnover or orders between 1 July and 31 December 2020 for 2020 paydates and between 1 January to 30 June 2021 for 2021 paydates, looking at the period as a whole rather than on a monthly basis; and this disruption is caused by COVID-19.

For 2020 paydates, this reduction in turnover or orders was relative to

- the same period in 2019 where the business was in existence prior to 1 July 2019;

- where the business commenced trading between 1 July and 1 November 2019, the date of commencement to 31 December 2019; or

- where a business commenced after 1 November 2019, the projected turnover or orders for 1 July 2020 to 31 December 2020.

For 2021 paydates, this reduction in turnover or orders is relative to

- the same period in 2019 where the business was in existence prior to 1 January 2019;

- where the business commenced trading between 1 January and 1 May 2019, the date of commencement to 30 June 2019; or

- where a business commenced after 1 May 2019, the projected turnover or orders for 1 January 2021 to 30 June 2021.

Proprietary directors are directors who can control, either directly or indirectly, more than 15% of the share capital of a company.

Revenue issued a press release on 31 August 2020 confirming that the EWSS can be claimed in respect of proprietary directors from 1 September 2020, subject to the following conditions:

- the employer meets the eligibility criteria for the EWSS,

- the proprietary director is on the payroll of the eligible employer, and

- the proprietary director has been paid wages which were reported to Revenue on the payroll of the eligible employer at any stage between 1 July 2019 and 30 June 2020.

Where a person is a proprietary director of two or more eligible companies, a claim for an EWSS can only be submitted in respect of a single company.

The 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.

Details of CRSS are set out in Finance Act 2020 and detailed operational guidelines, which are based on the terms and conditions of the scheme as set out in the legislation, have been published on the Revenue website at: https://www.revenue.ie/en/corporate/press-office/budget-information/2021/crss-guidelines.pdf

To qualify under the scheme a business must, under specific terms of the Covid restrictions, be required to either prohibit or significantly restrict, customers from accessing their business premises to acquire goods or services, with the result that the business either has to temporarily close or to operate at a significantly reduced level. A business must be able to demonstrate that, because of the Covid restrictions, the turnover of the qualifying activity (“relevant business activity”) during the period of restrictions will be no more than 25% of the “relevant turnover amount”.

The “relevant turnover amount” is calculated by reference to a business’s average weekly turnover for the relevant business activity in a prior period, the identification of which period depends on whether the business is an “established business” or a “new business”. An established business is a business that commenced trading prior to 26 December 2019. The relevant turnover amount for a “new business”, i.e. a business commenced by a person between 26 December 2019 and 12 October 2020, is based on the average weekly turnover of the business in the period from commencement to 12 October 2020.

A new business who was prohibited from operating due to Government restrictions in a week or weeks in the period from commencement to 12 October, and who can demonstrate to Revenue that the business received no turnover in that week or weeks, can exclude the week or weeks when calculating the average weekly turnover. This ensures periods in 2020, during which a business was unable to operate because of public health restrictions, do not impact negatively on the business’s average weekly turnover and, therefore, on its entitlements under the scheme.

Additional information on the wide range of supports available to help businesses impacted by the COVID-19 crisis is available on the Department of Enterprise, Trade and Employment website at https://enterprise.gov.ie/en/What-We-Do/Supports-for-SMEs/COVID-19-supports/ .

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