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 ended on 30 April.
Since 1 October 2020, a total of 66,058 receipts have been uploaded to the Revenue Receipts Tracker, as at 9 June 2021. The related expenditure recorded on these receipts amounts to €10,862,004, and the potential tax cost is €2,172,401, 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 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 was originally to apply until 31 December 2021. However, as I announced recently, the reduced rate will be extended to 1 September 2022. The extension until the end of the 2022 summer season allows for a longer period of recovery for the sector. 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) (extended to 31 December 2021) 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.
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.
The extension of the tax debt warehousing scheme to allow the period where liabilities arising can be “warehoused” to be extended to the end of 2021 for all eligible taxpayers, with an interest free period during 2022, and to include overpayments of EWSS in the scheme.