The TBESS is a support available for businesses that carry on a trade or profession chargeable to tax under Case I or II of Schedule D, including self-employed individuals, companies and partnerships. Charities and sporting bodies that carry on certain activities which would be chargeable to tax under Case I or II of Schedule D but for an available exemption are also included in the scheme. Businesses within the scope of the scheme are referred to as “eligible businesses”.
The scheme operates by reference to bills for the metered supply of electricity and natural gas through electricity accounts or gas connections which are identified by their own Meter Point Reference Number (MPRN) or Gas Point Reference Number (GPRN).
To be eligible to make a claim under the TBESS in respect of an electricity bill or a natural gas bill, a business must be able to demonstrate that the average unit price for electricity or gas, as the case may be, on the relevant bill has increased by 50 per cent or more as compared to the average unit price in a reference period. In broad terms, this is the average unit price in the month that is 12 months prior to the month to which the relevant bill relates. This is known as the “energy cost threshold”.
Once the eligible business has passed the energy cost threshold in relation to a particular bill, and satisfies a number of other conditions, it is a qualifying business and is entitled to claim a Temporary Business Energy Payment amounting to 40 per cent of its eligible cost (subject to a cap for each monthly claim period).
The eligible cost amount in relation to an electricity or natural gas bill is calculated as the uplift in the bill as compared to a bill amount in a reference period. For these purposes, electricity costs relating to a MPRN and/ or gas costs relating to a GPRN in respect of each monthly claim period falling within 1 September 2022 and 31 December 2022 must be compared with the electricity or natural gas bill costs, as the case may be, for the reference period, which is a monthly period that is 12 months prior to the claim period Where an electricity or natural gas bill covers only part of a claim period then it is compared with a proportionate amount of the electricity or natural gas costs for the reference period in determining the eligible cost amount.
Provision is made for businesses that do not have an electricity or natural gas bill for the reference period because the electricity account or natural gas connection, as the case may be, either did not exist or was not held by the eligible business during the reference period. In such circumstances, a deemed monthly reference unit price in respect of electricity or natural gas must be used for the purposes of the energy costs threshold and also, where the energy costs threshold is passed, for determining the eligible cost amount. Deemed monthly reference unit prices for electricity and natural gas is made available by the Sustainable Energy Authority of Ireland (based on data provided by suppliers and the Commission for Regulation of Utilities) and is contained in operational guidelines published by the Revenue.
The support available in respect of electricity and natural gas costs is subject to an overall monthly cap of €10,000 per trade. However, where the trade of a qualifying business operates across more than one location, as demonstrated by the fact that the qualifying business has more than one MPRN, each with an electricity supply address in a different location (and not adjacent to each other), the business is eligible for an increased cap of €10,000 per MPRN, which is available as regards both electricity and natural gas costs, up to a maximum amount of €30,000 per claim period.
There is an overall maximum payment limit for support given under the TCF of €500,000 per undertaking carrying on one or more qualifying business (lower limits apply to businesses engaged in farming (€62,000) and fishing (€75,000) activities). A claim for the TBESS must be made within 4 months of the end of the relevant claim period.
In order to be a qualifying business and entitled to make a claim under the scheme, a number of other conditions must be satisfied including that the business is eligible to obtain tax clearance and has complied with their tax obligations. The person must register to claim on the ‘Revenue Online Service’ and make a declaration that they satisfy the relevant conditions.
VAT on Fuel
The 2023 Act amended the rates of Mineral Oil Tax (MOT) as set out in Schedule 2 of Finance Act 1999 to provide for an extension to the current VAT inclusive per litre reductions of 21 cent in respect of petrol; 16 cent in respect of diesel; and 5.4 cent in respect of Marked Gas Oil which were due to expire on 28 February 2023. The section provides for an extension to these reductions with an incremental restoration of the full rates, to 31 October 2023. The effect of this is that excise on petrol, diesel and MGO did not increase on 1 March.
On 1 June the rates will be restored by 6 cent for petrol, 5 cent for diesel and 1 cent on MGO. These rates will be in place until 1 September, when the rates will increase by a further 7 cent, 5 cent and 1 cent per litre for each of petrol, diesel and MGO respectively. The remaining balance of the reductions, amounting to 8 cent for petrol, 6 cent for diesel and 3.4 cent for MGO will be restored on 31 October.
The 2023 Act provides for three amendments to the Value-Added Tax Consolidation Act 2010.
- the extension of the 9 per cent rate of VAT on the supply of electricity and gas until 31 October 2023.
- extension of the 9 per cent rate of VAT on the supply of certain goods and services which primarily relate to hospitality and tourism until 31 August 2023.
- the continuation of the application of the zero-rate of VAT to the supply of Covid-19 testing kits.
Scheme in 2023
The Temporary Business Energy Support Scheme (TBESS) is amended to provide that the scheme may be extended beyond 31 May 2023 to a date no later than 31 July 2023.
It provides as follows:
- To provide that the specified period for the scheme will end on 31 May 2023.
- the increase in the average unit price of electricity or natural gas, between the reference period and the claim period, required by the energy costs threshold, is reduced from 50 per cent to 30 per cent with effect from 1 September 2022.
- increase the amount of the temporary business energy payment (TBEP) from 40 per cent of the eligible costs to 50 per cent for claim periods from 1 March 2023 until the end of the scheme.
- a new time limit for making claims under the scheme which will be two months from the end of the specified period (and no longer 4 months from the end of the claim period to which the claim relates).
As the amendments are subject to State aid approval, provision is made for a commencement order to give effect to the amendments when such approval is received.