Tax

Updates to the Temporary Business Energy Support Scheme (“TBESS”)

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There have been a number of updates to the Temporary Business Energy Support Scheme (“TBESS”) in recent weeks. The updates mainly concern the administration of the scheme and are therefore the focus of this insight.
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Qualification

Recent updates include clarification on the types of businesses that do, and do not, qualify. It is confirmed that businesses that pay for electricity or gas on a Pay As You Go basis, can avail of the scheme once they meet the qualifying criteria. They must supply details from their energy statement to Revenue as part of their claim. 

Credit institutions and financial institutions do not qualify for the scheme, as their exclusion was a pre-requisite for the receipt of State Aid approval from the European Commission. 

Not-for-profit entities are unlikely to be regarded as carrying on a trade that is chargeable to tax and, therefore, would not qualify for the scheme.

As a reminder, an eligible business must satisfy the energy costs threshold in order to qualify. The energy costs threshold test of 50% is a test on the increase of the average unit price of energy suffered by a business; it is not a volume test. It is expected the majority of taxpayers have suffered a 50% increase in the underlying cost of energy per unit and should qualify for TBESS, notwithstanding their overall energy costs might not have increased by 50% if they have conscientiously rationed their energy use. 

Value of TBESS

By way of brief reminder, qualifying businesses will be able to claim a cash payment, equal to 40% of the uplift in energy costs in a calendar month compared to the costs suffered in the same calendar month the previous year.

A qualifying business can claim payments up to a maximum of €10,000 per month for each trade or profession that it carries on.  Where a qualifying business operates across multiple locations and has more than one electricity account, the monthly limit can increase by €10,000 per electricity account, subject to an overall monthly limit of €30,000 per qualifying business. 

For this additional claim to be valid, each electricity account must have its own MPRN identifier, with each MPRN having a separate supply address provided the addresses are not regarded as adjacent. This monthly limit of €10,000 does not increase for entities engaged in farming, fishing or aquaculture.

Making a claim

Revenue developed a portal on Revenue Online Service (ROS) that allows businesses to register for TBESS and make a claim under the scheme.  Registration is available on ROS and from 5 December 2022 businesses can make an online claim via the eRepayments system on ROS.  Businesses must register for the TBESS on ROS and have tax clearance before a claim can be submitted.

There is a four-month deadline to make a claim. This deadline runs from the end of the claim period to which the electricity or gas bill relates.  According to Revenue, payments in relation to September, October and November of this year could be made by the end of the year if businesses register and claim by the third week of December. Any qualifying payments are subject to Finance Bill 2022 enacted into law, which is expected later this month.

Other key updates

A key feature of the scheme is the need for valid tax clearance. A business will be deemed tax compliant where it has entered into a Phased Payment Agreement (PPA) and is meeting its obligations under that PPA.

In line with normal Revenue offset rules, a TBESS payment will be offset against any outstanding taxes due.  The offset will not apply to liabilities warehoused under the Debt Warehousing Scheme and liabilities that the business is paying under a PPA (once the business is fully compliant in relation to these).

There is a €2 million cap on the total amount of relief for group companies.  This limit is €250,000 in the case of farmers and €300,000 in the case of fishery and aquaculture sectors.

Revenue clarified that while businesses are asked to complete the Climate Toolkit 4 Business, this ask is not a legal requirement and completion is not necessary for businesses to qualify for the scheme.  The Climate Toolkit 4 Business is to assist businesses to identify and account for their climate action efforts.

For businesses that do not have a reference bill, the deemed unit prices for electricity and natural gas that must be used in these circumstances, have been made available by the Sustainable Energy Authority of Ireland (SEAI).

Other supports available to businesses 

The Enterprise Ireland Ukrainian Enterprise Crisis Scheme provides two streams of supports to manufacturing and Internationally Traded Services companies.  Both these streams can be applied for now from Enterprise Ireland. The deadline for applications to stream 1 was extended to 30 December 2022. Stream 2 deadline is 2 March 2023.

The Government allocated funding to Sport Ireland to provide support to sporting organisations with the rising energy costs associated with the provision of sport. The Sports Energy Support Scheme (SESS) eligibility period will relate to increased energy costs sustained between 1 September 2022 and 31 March 2023.  The closing date for applications is now past; the first payments under the scheme are expected by the end of the year.

Refer to our previous insight for more details - Temporary Business Energy Support Scheme (“TBESS”) and other supports

Contact us

For additional information on any of the energy supports available to business, please contact our expert team or your usual Grant Thornton contact.