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What we know about the new COVID-19 Restrictions Support Scheme

New scheme announced in Budget 2021 offers up to €5,000 per week for businesses who are subject to significant COVID-19 restrictions

The COVID Restrictions Support Scheme (CRSS) was one of the centrepieces of Budget 2021 announced by Minister Paschal Donohoe last week.

With the move to Level 5 lockdown resulting in a swathe of closures for businesses due to the heightened restrictions, this will be a vital support for those businesses forced to close or severely curtail their business during the 6 week lockdown period.

Whilst we are still awaiting full publication of the CRSS guidelines here is what we do know so far:

The CRSS will run from 13 October 2020 until 31 March 2021
Your business must continue to file all tax returns on time, hold a current tax clearance certificate and have the intention to resume the business when the restrictions are lifted
You can claim both the CRSS and the Employment Wage Subsidy Scheme (EWSS) at the same time
Details of taxpayers availing of the scheme will be published on the Revenue website at a later time
CRSS will be available to both companies and self-employed individuals
Your business must be operating from a premises wholly located in a region subject to restrictions imposed by the government, with the result that the business is required to prohibit or considerably restrict members of the public from accessing their business premises
If, due to the restrictions in force, your business has been required to temporarily shut your premises or operate at significantly reduced levels, with the result that turnover for that period will be no more than 25% of the average weekly turnover for a period equal to the same number of weeks in 2019 (or using 2020 turnover figures for new businesses), you will qualify under the scheme
The relief will operate as a cash payment equal to 10% of the average weekly value of the 2019 business’s turnover up to €20,000 and 5% thereafter, subject to a maximum weekly payment of €5,000, for the same number of weeks as the restricted period.
The payment is known as an Advanced Credit for Trading Expenses and it will reduce the value of your tax deductible expenses in your tax return for the period in which you receive the CRSS payment by the amount of the payment you receive. However, the receipt of the payment will only result in additional tax where the business is in a profitable position for the chargeable period.

Example – individual operates a clothes shop in Dublin:

Mr. A operates a clothes shop in Dublin.

In the year ended 31 December 2019, his turnover from the business was €663,000 (excluding VAT).

His VAT returns are up to date and he has tax clearance.

From 22 October 2020 he must close the shop to customers in line with Government restrictions for a period of 6 weeks.

Mr. A expects that he will have no turnover in that 6-week period.

He is entitled to apply to Revenue for an Advance Credit for Trading Expenses (ACTE) under the CRSS scheme for the 6-week period of the Level 5 restrictions.

Average weekly turnover 2019 = €12,750 (i.e. €663,000 / 52)

10% of €12,750 = €1,275

Number of full weeks 6

€1,275 x 6 = €7,650 CRSS claim

If the restrictions are extended beyond the 6-week period, then he can make a new claim for the extended period.

Date published 20 Oct 2020 | Last updated 21 Oct 2020

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

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