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Covid-19 Pandemic

Dáil Éireann Debate, Tuesday - 21 September 2021

Tuesday, 21 September 2021

Questions (173)

Mairéad Farrell

Question:

173. Deputy Mairéad Farrell asked the Minister for Finance the reason that business accounts can be used for the purposes of calculating average turnover when an intergenerational transfer of a family business has taken place under the terms of the Covid restrictions support scheme 2019; the reason 2019 business accounts cannot be used when a non-family transfer of a business has taken place; and if he will make a statement on the matter. [44545/21]

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Written answers

Details of the Covid Restrictions Support Scheme (CRSS) are set out in Finance Act 2020. The administration of the scheme is under the care and management of the Revenue Commissioners and the legislation makes provision for Revenue to publish guidelines on matters to be considered by them in determining whether certain eligibility criteria are met. Detailed operational guidelines have been published on the Revenue website.

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 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 and the relevant turnover amount for such a business is based on average weekly turnover in 2019. A new business is a business that commenced between 26 December 2019 and 12 October 2020 and the relevant turnover amount for such a business is based on average weekly turnover in this period.

In certain limited circumstances, where a business is transferred within the family, after 1 January 2019, such that the transferee is carrying on the same trade in the same business premises with no substantial change to the nature or operation of the business, and the transferee has devoted at least 50 per cent of his or her normal working time to the service of the business, Revenue has advised that they will accept that the person making the claim may use the “relevant turnover amount” of the business by reference to the turnover for the period from 1 January 2019 to 31 December 2019, subject to a number of specific conditions.

Details on this treatment, including the conditions that must be met, are set out in Revenue’s detailed operational guidelines. Those guidelines also provide that, where certain conditions are met, on a business reconstruction or amalgamation or on the death of an individual, Revenue will accept that the person making a claim for the CRSS may use the “relevant turnover amount” of the business by reference to the turnover for the period from 1 January 2019 to 31 December 2019. In each of the circumstances where this treatment applies, Revenue considers it to be reasonable and proportionate, with strict conditions applying to ensure it is only available where there has been no substantial change in the nature or operation of the business and, where appropriate, there is no substantial change in ownership of the business.

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