From today eligible businesses can claim cash payments under the Government’s Covid Restrictions Support Scheme. This scheme will provide valuable cash assistance to businesses who have had to close due to the pandemic restrictions. In order to qualify, businesses will need to have been forced to close completely or restrict customer numbers from entry to their business due to level 3 or higher Covid restrictions. Turnover must also have been impacted to 25% of the business’s average weekly turnover for last year. Each business must have tax clearance and have the intention of reopening following the lifting of current restrictions.
Claims can be made through the Revenue Online System (ROS) following e-registration through the portal. However, for any further periods of restrictions, each business will be re-assessed for eligibility. The current period of restrictions are in operation until December 1st.
Payment in respect of claims will be paid three days after approval of eligibility. A qualifying business can make a claim to Revenue under the CRSS for a cash payment known as an ‘Advance Credit for Trading Expense’. This payment will be equal to 10% of the business’s average weekly turnover in 2019 up to €20,000, and 5% thereafter, subject to a weekly maximum payment of €5,000 for each week that the business is impacted by the Covid restrictions. For businesses established between December 26th, 2019 and October 12, 2020, the claim is based on actual weekly turnover in that period.
These payments are treated as an Advance Credit for Trading Expenses and so will be deducted from expenses (wages & salaries, rent & rates, light & heat etc.) that are deductible in computing profits taxable under Schedule D, Case I.
Ultimately therefore, the payments may be subject to either income tax or corporation tax, but such liability will only become payable once the business is profitable again.