The BRSS relief has been introduced to assist businesses who are struggling to cope with the ongoing Covid-19 pandemic.
The scheme will support eligible businesses who meet the relevant criteria, irrespective of whether they have previously qualified for other Covid-19 related Government Schemes. Successful claims will receive an Advance Credit for Trading Expenses (ACTE), and claims can begin from September 2021 via the eRepayment system on ROS (Revenue Online System). The deadline for submission of claims is 30 November 2021.
Who is eligible for the Business Resumption Support Scheme?
BRSS is available to qualifying self-employed individuals and companies who carry on a trade. The profits are chargeable to tax under Case I of Schedule D. It is also available to persons who carry on a trade in partnership and any trading activity carried out by charities and sporting bodies. If a person has more than one trade that is chargeable under Case I Schedule D, they will qualify for BRSS for each trade.
To qualify under the scheme, the business's turnover during the relevant period (from 1 September 2020 to 31 August 2021) must be no more than 25% of its turnover compared to the reference period.
The reference turnover amount (VAT exclusive) is calculated by taking the weekly average turnover of a business for a comparable prior period, multiplied by 52 weeks. The reference period is dependent on the date that the business commenced its relevant business activity. For most businesses, the reference period will be 2019, but it will be later if the business was established on or after 26 December 2019. The relevant comparable prior periods as detailed in the Revenue guidance notes are as follows: -
Therefore, to determine eligibility, the reference turnover amount is calculated on a pro-rata basis by apportioning the turnover of the business included in a set of accounts that covers the relevant reference period.
The calculation of the turnover requirement can be summarised as follows:
Turnover amount for 1 September 2020 to 31 August 2021 / Average Weekly Turnover (For the comparable period) x 52
Relief is available through the BRSS
Qualifying taxpayers, can claim a ACTE payment, calculated as an amount equal to three times the sum of: -
- 10% of average weekly turnover during the reference period up to €20,000; and
- 5% thereafter (that is of the amount that exceeds €20,000).
An ACTE payment is capped at a maximum of €15,000 for each trade. Payments made under the scheme will be treated as an advance credit for trading expenses.
An ACTE payment should be taken into account by the claimant when calculating taxable profit or loss of the business for the period. This is done by reducing the amount of deductible trading expenditure by the amount of the credit received. An ACTE will not result in an additional tax liability unless that business has trading profits for the year. Where a business is in a loss-making position, an ACTE will reduce the amount of trading losses available to offset against future or previous profits of the business.
Additional qualifying conditions for BRSS
In addition to the fall in the reference turnover amount, the following criteria are required to be satisfied: -
- The taxpayer has an up to date tax clearance certificate and maintains this clearance from 1 September 2021 to 30 November 2021;
- They have complied with their obligations in relation to registering and accounting for VAT;
- Must be actively trading at 1 September 2021 and intends to continue to trade;
- The claimant is not entitled to make a claim for the Covid Restrictions Support Scheme (CRSS) for any week containing 1 September 2021; and
- The business maintains and have available such books and records as may be reasonably required for the purposes of demonstrating that the person is eligible to make a claim under the scheme and to fully support any amount claimed.
How to make a BRSS claim
You must register for BRSS using the eRepayment system on Revenue Online System (ROS) to make a claim. The claimant will be required to make a self-declaration that they satisfy the eligibility criteria. Once registered, claims can be submitted through the eRepayment portal.
For any claims made, backup documentation should be retained that can substantiate the claim in the event of a Revenue verification check. The latest date for any claim is 31 November 2021.
Adjustment or Withdrawal of BRSS claims
Where an ACTE claim is either wrongly claimed or overclaimed, the claimant can withdraw the claim by notifying Revenue and repaying the overclaimed amount as soon as it is reasonably practicable. In these circumstances, penalties and interest should not arise. If Revenue should determine that an ACTE claim was unauthorised or overclaimed, this may lead to clawback of additional tax due, together with interest, penalties and possible publication.
The clawback for a company is calculated as four times the excess ACTE claimed. It is not possible to offset any credits, losses, expenses or allowance against the tax liability.
For an Individual, the clawback is calculated as five times the excess ACTE claimed. The clawback is not subject to PRSI or USC, but similarly, no deduction, relief, tax credit or reduction in tax is permitted.
This relief is a welcome addition for struggling businesses. If together with the fall in the turnover requirement, of the above conditions are satisfied, a business is entitled to make a claim for the ACTE before the deadline on 30 November 2021. Any claim made outside of these dates will not be accepted.
If you have any questions in relation to the above, or if you would like to discuss this topic further, please contact a member of the Mazars corporate tax team below: