The purpose of the Stay and Spend Tax Credit scheme was 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. The scheme terminated on 30 April.
Since 1 October 2020, a total of 65,661 receipts have been uploaded to the Revenue Receipts Tracker, as at 26 May 2021. The related expenditure recorded on these receipts amounts to €10,762,518, and the potential tax cost is €2,152,504, assuming all such expenditure is claimed and qualifies in full for tax relief. Subsequent to claims being made in respect of this scheme and any other relief or deduction, verification of such reliefs and deductions forms part of Revenue’s comprehensive risk assessment programme.
The scheme was developed at a time last year 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, with the exception of some short periods, public health restrictions have had the effect of impeding the operation of the incentive as originally envisaged.
While I am very mindful of the significant difficulties that remain to be faced by the hospitality sector, I made the determination that the broad interests of taxpayers would not have been best served by extending the scheme over the summer months in circumstances where most will be staying at home and hopefully holidaying in Ireland. This is particularly the case when other very significant support measures will remain in place.
Currently, I do not have plans to re-introduce the Stay and Spend scheme. However, it may be useful to highlight and summarise the significant supports that remain available to support businesses in the hospitality sector:
- 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 but important 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. It will apply until 31 December 2021. It should be noted that this VAT rate reduction came after the introduction of the Stay and Spend Tax Credit and reflects the fact that the latter was not intended to be the sole sector-specific support for hospitality.
- In addition, the Employment Wage Subsidy Scheme (EWSS) continues to be a key component of the Government’s response to the 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. Subject to the Government meeting today, there may be further announcements in this regard.
- 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.
- Finally, businesses may also be eligible under the Debt Warehousing Scheme to ‘park’ certain VAT and PAYE (Employer) liabilities, outstanding balances of self-assessed Income Tax for 2019 and Preliminary Tax for 2020 as well as other liabilities.