How is the Restart Grant taxed?

The restart grant was introduced last year to give direct aid to micro and small businesses to help them with the costs associated with reopening and reemploying workers following COVID-19 closures.

Paying Tax on the Restart Grant and Restart Grant Plus:

Where the grant is used for expenditure which is revenue in nature, such as utilities or insurance expenses that provide immediate or short-term benefits, it will be taken into account when calculating the trader’s taxable trading profits for that tax year. 

If the grant is used for expenditure which is capital in nature e.g. to fund the acquisition of plant and machinery for use in your business, you will be entitled to claim capital allowances in respect of that expenditure net of the grant received.

For example, if you used a restart grant of €2,000 to help buy a piece of equipment worth €6,000 then you will be able to claim capital allowances on the net cost of €4,000.

The Restart Grant and the EWSS:

In relation to the Employment Wage Subsidy Scheme (EWSS) and the calculation of the reduction in turnover of the business during COVID-19, Revenue regards the Restart Grant as capital in nature and therefore it is not included in the definition of turnover for the purposes of assessing employer eligibility for EWSS. 

 

 

Date published 22 Apr 2021 | Last updated 22 Apr 2021

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.