Energy scheme for Irish businesses included in Budget 2023
The Irish Government has announced Budget 2023, which includes a number of measures to help Irish businesses through what Minister for Finance Pascal Donohoe called “these exceptionally challenging times”.
Among the supports is the Temporary Business Energy Support Scheme to assist businesses with their energy cost over the winter months.
The new scheme will be open to businesses that are tax compliant and have experienced a significant increase in their natural gas and electricity costs. It will be administered by the Revenue Commissioners and will operate on a self-assessment basis. Businesses will be required to register on the scheme and to make claims within the required time limits.
According to Minister Donohoe, the scheme will compare the average unit price for the relevant bill period in 2022 with the average unit price in the corresponding reference period in 2021. If the increase in average unit price is more than 50%, then the threshold would be passed and the business would be eligible for support under the scheme.
Once eligibility criteria are met, the support will be calculated on the basis of 40% of the amount of the increase in the bill amount. A monthly cap of €10,000 per trade will apply, and an overall cap will apply on the total amount which a business can claim.
“This is a significant intervention by the Government in the Irish economy to protect employment,” said Minister Donohoe. “This support scheme forms a large part of our once-off package. We must weaken the ability of a shock to income becoming a loss of jobs. This new policy will help employers with their rising bills, and help to save their businesses.”
Meanwhile, the tax-free bonus amount employers can give employees through the Small Benefit Exemption is set to double from €500 to €1,000. Employers will also be permitted to grant staff two vouchers per year under the exemption.
The Government, however, decided against extending the lower 9% rate of VAT for hospitality beyond February, which means that VAT for the hairdressing industry will return to 13.5% next year. The Irish Hairdressers Federation (IHF) had asked the Government to keep the rate at 9%.
