Last week we spoke about the technology that has helped us a lot in our business since the onset of Covid-19. In case you missed it Read here
To help businesses understand a bit more about the supports that are out there we are going to look at the CRSS. We will focus on 10 key points so that you can understand it better and see if this is something that you can apply for.
1. Who is it for?
It is for trading businesses whether they are companies, sole-trader, or partnerships. The business must be operating from premises, that is in a region where restrictions are in place. There is a prohibition or restriction on the public from entering the premises. In general, this applies when the region the business is in is at level 3,4 or 5 of the Government's Living with Covid Plan. For certain businesses it could work where the levels are lower than level 3.
2. How does your business qualify?
The business may have to close or operate at much-reduced levels to qualify. The business will have to show, due to the Covid restrictions, the turnover has fallen in the claim period. The level of decline has to be 75% or more compared to the average turnover in 2019 For example the current level is 5. This is in place for 6 weeks from the 22nd of October to the 2nd of December. To see if your business is eligible to qualify you will look at your turnover, or expected turnover, for these 6 weeks. You will then compare that to the average of 6 weeks turnover for last year to see if you meet the 75% reduction test.
3. What will Revenue do?
Once you have a qualifying business you can make a claim to Revenue. This claim is for a cash payment called an "Advanced Credit for Trading Expenses" [ACTE]. This payment will be equal to 10% of the average weekly turnover for 2019, up to a ceiling of €20,000 per week and 5% above that. The max weekly payment a business could get is €5,000 for the period of the restrictions. See an example below
4. How do I make a claim?
Once you are happy you have met the qualifying conditions you will have to register on ROS to make a claim. You will provide information and make a declaration that you have met the conditions. You and your business will have to have tax clearance and you are up to date with your VAT. Like other government support schemes there will be a review at a later stage. You will need to retain supporting documentation to show eligibility.
So first you register on ROS and then you make a claim for a claim period. The facility to be able to register on ROS is to be available in mid-November.
5. How long does the scheme run for?
It runs from the 13th of October 2020 until the 31st March 2021.
6. What information do you need to register?
You will need the following information to register
- Business/Premises name [you could be operating from more than one business premises]
- Address including Eircode
- Business Sector
- Average weekly turnover in 2019 [excluding Vat]
- Average weekly turnover in 2020. This is for businesses established after the 26th of December 2019.
- Date of commencement of new business
- Vat in respect of T1 on Vat
7. What is a business premises?
A business premises is a building, or fixed similar structure, in which the business operates from. Mobile premises, or businesses that are not permanently fixed do not meet the criteria. Examples of what does not qualify include vans, trucks, or similar vehicles. Stalls such as market stall and trade fair stalls would also not qualify.
8. What is a business activity?
It is a person's trade from a business premises, the profits of which are chargeable to tax under Case 1 of Schedule D.
Case 1 applies to trades only so this would mean that professions don't qualify.
Mr Charlie Angel has two cafes in Waterford and Kilkenny. For the CRSS he has two business activities, one relating to his cafe trade at his premises in Kilkenny. The other relates to his cafe trade at his premises in Waterford. Where Covid restrictions are in place for both Kilkenny and Waterford, he will have two relevant business activities.
It can be a case where customers of a trade buy goods and services while not attending the premises. For example, online shopping delivered to the customer, or goods or services ordered by phone. Those transactions are part of the trade relating to the business premises. You must apportion those types of transactions on a just and reasonable basis to each business premises where you have more than one. This is to ensure that these types of sales are part of your turnover when you are assessing if you qualify.
9. How is turnover assessed?
Let's have a look at an example to explain it. For established businesses, it will be your average weekly turnover from 1 January to 31 December 2019. For new businesses the average turnover is from the date you set up the business to the 12th October 2020.
Mr. T Bagge has been selling books and gift items from his shop in Cork City since 2015. In 2018 he started selling on-line and this is now a good chunk of his sales. In 2019 his total sales were €240,000 exclusive of Vat. His average weekly turnover was €4,615
As government restrictions are in place in Cork, he has to close his shop for 6 weeks. He will still have some online sales. Based on the previous restrictions in place last March, he thinks his turnover for the six weeks will be €5,400. He has to show that this turnover will be no more than 25% of the relevant turnover amount.
The relevant turnover amount is €4,615 X 6 = €27,690
€5,400 X 100 = 19.5%
Based on these figures, Mr Bagge satisfies the reduction in turnover condition. This means he can make a claim for ACTE, once he meets all the other conditions.
For new businesses see example 9 on page 19 of the guidelines
10. How much can you claim?
For established businesses the claim will be
- 10% of the average weekly turnover for 2019, up to a turnover cap of €20,000, and
- 5% of the average weekly turnover for 2019 that exceeds €20,000
The ACTE will be the weekly amount multiplied by the number of weeks in the claim period. Remember the max weekly limit is €5,000.
For new businesses it is the same percentages as above. But the average weekly turnover is for the trading period as per point 9.
Mr. Noel Butt has been running a wet pub in Galway for 15 years. In the year ended 31 December 2019 his turnover from the business was €780,000 net of Vat. He has tax clearance and his Vat returns are up to date. He closed the pub on the 15th of March in line with Government restrictions. The pub has stayed closed since then, but he plans to reopen it when restrictions lift
As of the 22nd of October the restrictions are in place for Level 5. Noel will have to keep the pub closed until the 3rd of December. Based on having no turnover for the 6 weeks he can apply to Revenue for an ACTE payment for this period. He will have to make sure he meets the other qualifying conditions.
The amount of ACTE that he can claim will be based on this turnover for 2019.
|Average weekly turnover 2019||€780,000/52||€15,000|
|Number of full weeks||6|
|ACTE IS||€1,500 X 6||€9,000|
The above is a very short whistlestop tour of the main provisions of the CRSS guidelines. You or your advisor must read the full guideline before making a claim. There are a lot more detailed examples in the guidelines. You will need to be familiar with claim periods. There will be different claim periods for different counties - see section 5. You will also need to be aware of withdrawal and amendment of claims - see section 7. This is a good scheme and helps traders, mainly in the retail and hospitality sectors. Unfortunately, it won't help many businesses in other sectors owing to the conditions. For a link to the guidelines Click here
If you need help with your business call Deirdre on 051 396703. She will point you in the right direction. Or contact us and we can set-up a meeting to find out more about you and your business.