Dáil Éireann Debate, Wednesday - 17 January 2024
408. Deputy Cian O'Callaghan asked the Minister for Enterprise, Trade and Employment the supports available for small businesses that are struggling with increased costs since the return to 13.5% VAT rate and the upcoming repayment of debt warehouse tax; and if he will make a statement on the matter. [1986/24]
View answerAs part of the Budget 2024 package, the Government announced the introduction of the Increased Cost of Business (ICOB) grant.
While this grant is intended to aid firms with the challenge posed by increased costs, it is not intended to directly compensate for all increases in wages, or other costs, for every business. It is important that I be clear that this scheme is not related to the change in the rate of VAT applied to the Hospitality sector or the repayment of warehoused tax debt.
In this context it is also important to recognise the favourable interest rates that were provided to businesses who availed of the tax debt warehousing scheme offered by Revenue. Revenue has also provided the option for participants to enter into Phased Payment Arrangements (PPA) by 1 May 2024.
The ICOB grant is particularly targeted at small and medium sized businesses who operate from a rateable premises. Firms who do not have a rateable premises are not within the scope of this scheme. The total allocation for the ICOB grant is €257m.
The grant is intended to be paid at a rate of half the enterprise’s 2023 commercial rates bill, for firms paying up to €10,000 in rates. For those paying between €10,000 and €30,000 in rates, they will receive a flat grant of €5,000 each. No grant will be available for firms paying more than €30,000.
Officials in my Department are currently working with the Local Authorities on the administration of the ICOB grant. This grant will be paid through the Local Authorities and it is intended that this will be done in the first quarter of this year. It is not intended that there be a formal application process, rather it is intended that the business will be contacted directly by the local authorities.
Eligibility for the ICOB grant will be assessed on the basis of an applicant satisfying a minimum of the below conditions:
- The business is a commercially trading business operating directly within a premises that is commercially rateable by a Local Authority.
- The business has provided confirmation of its bank details to the respective Local Authority.
- The business is rates compliant, including those businesses with a phased payment arrangement in-place.
- The business is tax compliant, and in possession of a valid Tax Registration Number.
- I would emphasise that this scheme should not be looked at in isolation and should be considered in light of the range of supports that have been made available to business in recent years, with shocks ranging from Brexit to COVID-19, to supply change disruption and to rising energy costs associated with the crisis in Ukraine. These include the Covid-era Commercial Rates grant and waiver schemes, the Restart Grant, and Small Business Assistance Scheme for Covid (SBASC); the Temporary Business Energy Support Scheme (TBESS); and the Ukraine Enterprise Crisis Scheme. In addition, the Business Users Support Scheme for Kerosene (BUSSK), launched in September 2023, provides assistance to businesses impacted by significant increases in the cost of kerosene heating oil.
I would further note that broader supports for SMEs announced in Budget 2024 included the extension of the 9% VAT rate on gas and electricity from the end of 31st October 2023 to the end of October 2024. Furthermore, the temporary excise rate reductions applying to auto diesel, petrol and marked gas oil were due to expire on 31st October 2023 and were also extended until 31st March 2024.
