By Robert Lohan FCA, CTA – Tax Director, DHKN
The Temporary Business Energy Support Scheme or TBESS was warmly welcomed by business owners and other organisations across the country when it was announced as part of Budget 2023. (This update reflects changes made by Revenue up to 5 December 2022.)
The main goal of the scheme is to keep as many businesses as possible from having to close permanently or temporarily and prevent employee layoffs. It also provides assistance to charities and sporting bodies.
It has now been confirmed that the scheme will apply to professions as well as trades and that new businesses will also be eligible when they meet qualifying conditions.
In short…
What is the scheme?
Financial aid for businesses and other organisations being hit with spiralling energy costs.
Who can apply?
Any business, charity or sporting body if they can show that the unit cost on their electricity or gas bills has gone up by 50pc or more this year compared to the same period last year.
How much is available?
The scheme will pay out 40pc of the increased cost of bills up to a limit of €10,000 per qualifying business per month.
The Detail…
As ever with such schemes there is an amount of detail and procedures to go through to understand if your organisation is eligible before making a claim.
Period covered
The scheme is intended to operate in respect of energy costs relating to the period 1 September 2022 to 28 February 2023.
Eligible businesses
TBESS is available to businesses that carry on a trade or profession chargeable to tax under Case I or II including self-employed individuals, companies and partnerships. It also includes charities and sporting bodies.
Qualifying Businesses
To make a claim in respect of an electricity bill or a natural gas bill, a business must demonstrate that the average unit price for electricity or gas on the relevant bill has increased by 50% or more as compared to the average price in the reference period. This is known as the “energy cost threshold”.
The Reference period for claims related to 1 September 2022 to 28 February 2023 is the monthly period that is 12 months prior to the claim period. The claim period is a calendar month between 1 September 2022 to 28 February 2023. Where an electricity or natural gas bill covers only part of the claim period then it will be compared with a proportionate amount of the electricity or gas costs for the reference period.
Amount of claim
Once the eligible business has passed the energy cost threshold in relation to a particular bill and meets the other conditions noted below, it is a qualifying business and is entitled to claim a Temporary Business Energy Payment.
The amount that can be claimed is 40% of the uplift in the bill as compared to a bill amount in the reference period subject to a cap for each monthly claim period.
Caps
- The aggregate amount that can be claimed by a qualifying business in each monthly claim period is €10,000.
- Where the trade of a qualifying business operates across more than one location, each with an electricity supply address in a different location and not adjacent to each other, the business will be eligible for an increased cap of €10,000 per MPRN up to a max of €30,000 per monthly claim period.
- TBESS is part of the government’s Temporary Crisis Framework which will include further supports for business, the details of which are to be finalised. The aggregate amount that may be claimed by a single undertaking carrying on one or more qualifying businesses under the Temporary Crisis Framework (including TBESS) shall not exceed:
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- €250,000 for a farming trade
- €300,000 for trade related to fishery and aquaculture products
- €2,000,000 in any other case.
A Single Undertaking includes all enterprises having at least one of the following relationships with each other:
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- one enterprise has a majority of the shareholders’ or members’ voting rights in another enterprise;
- one enterprise has the right to appoint or remove a majority of the members of the administrative, management or supervisory body of another enterprise;
- one enterprise has the right to exercise a dominant influence over another enterprise pursuant to a contract entered into with that enterprise or to a provision in its memorandum or articles of association;
- one enterprise, which is a shareholder in or member of another enterprise, controls alone, pursuant to an agreement with other shareholders in or members of that enterprise, a majority of shareholders’ or members’ voting rights in that enterprise.
- In case of entities having direct or indirect relationships with public bodies they are not considered to be a single undertaking.
Other conditions
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- The eligible business has complied with their tax obligations.
- The eligible business is throughout the claim period eligible for a tax clearance certificate.
- The eligible business must register for the scheme on ROS and make a declaration that they satisfy the relevant conditions. Claims will then be made through ROS.
- The Claim must be made within 4 months of the end of the relevant claim period.
Other points to note
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- Where an electricity or gas account relates to more than one qualifying business, the charges should be apportioned on a just and reasonable basis between the trades of each qualifying business.
- Where part of the electricity or gas bill in the claim period is not wholly and exclusively related to the trade of the qualifying business the reference amount that the bill is compared to is also reduced proportionately.
- The legislation also includes provisions which will allow businesses that did not have an electricity or natural gas connection in the relevant month in the previous year to access the scheme. The deemed reference unit prices for electricity and natural gas (provided by the Sustainable Energy Authority of Ireland) are included in Revenue’s guidelines.
- Customers who use Pay-As-You-Go (PAYG) systems for electricity are also now included in the scheme. PAYG customers should base their claims on statements rather than invoices.
- The portal for registrations opened on 26 November 2022
- Claims can be made through ROS in the week commencing 5 December 2022.
- Businesses are being asked to take steps to understand and reduce their energy use by completing the Climate Toolkit 4Business. The completion of the toolkit is not a legal requirement and has no impact on the assessment of a business’ eligibility for TBESS.
For further Information
Get in touch with DHKN through your regular relationship manager or contact info@dhkn.ie or +091 782020.
Revenue has just updated its guidelines for the scheme and you can find a complete copy here.
