Everything you need to know about the Temporary Business Energy Support Scheme

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The Temporary Business Energy Support Scheme (TBESS) was introduced to support businesses with increases in their energy costs.

The Government announced changes to the TBESS in yesterday’s Cost of Living Measures package. We’ve highlighted changes below but note that these changes are subject to State Aid approval from the European Commission.

What is the Temporary Business Energy Support Scheme?

The scheme is open to qualifying businesses that have experienced a significant increase in their electricity and/or gas bills to provide support over the winter months.

Under the scheme, eligible businesses can claim a monthly payment of up to €10,000 to help with energy costs. This payment will rise from the current €10,000 to €15,000 per month per trade or profession from next month.

The scheme is self-assessed and operated via a dedicated portal on the Revenue Online Service (ROS).

Who is eligible for financial support?

Businesses carrying on Case I trade or Case II profession assessed under schedule D and also includes charities and approved sports bodies carrying on certain activities.

Eligible businesses must have complied with their tax obligations, including completing registration, filing and paying deadlines and must be eligible for a tax clearance certificate throughout the claim period.

Businesses that have debt warehousing arrangements in place are deemed to be eligible. Businesses must continue to be entitled to tax clearance during the claim period.

You can check your tax status via ROS.

To qualify, businesses must also have experienced a 50% or more increase in their natural gas and/or electricity costs in the relevant claim period when compared to the ‘reference’ period in 2021. The government have now proposed to change this from a 50% increase to a 30% increase.

When does the scheme end?

The TBESS is backdated to 1 September 2022 and has been extended until 31 May 2023.

Businesses can register for the scheme and submit claims via a portal on ROS.

Each claim period will be equal to one calendar month, and claims can be made up to four months after the end of the claim period. However, this deadline has been extended by Revenue and claims can be made beyond 31 January 2023 for September 2022.

 

How does the Temporary Business Energy Payment work?

The TBESS scheme is run on a self-assessment basis and applies to costs of electricity and metered natural gas incurred by an eligible business.

Eligibility is based on the average unit price for the billing period in 2022 compared with the equivalent bill period in 2021 – known as a ‘reference period’.

If the increase is 50% or more, the business is eligible for support under the scheme. The government have now proposed to change this from a 50% increase to a 30% increase.

The owner or representative of a qualifying business must register for the scheme on the dedicated portal on ROS, provide the required information, and make a declaration that they meet the criteria.

The amount to be included in the unit price is the electricity usage, plus standing charges and other charges such as the PSO (Public Service Obligation) levy.

The PSO levy was reduced to nil on 1 October 2022, so this charge should only be included in calculations for September.

The amount excludes VAT and any discounts given by the supplier. Prepayments or arrears balances are not included in the calculation.

There’s no need to carry out calculations as the Revenue system will carry out all the calculations based on the details you input from the relevant electricity and/or gas bills – relating to both reference and claim periods.

The system will generate the reference unit prices and claim unit prices based on the information you have supplied.

Further details on the scheme and how the Temporary Business Energy Payment is calculated are provided in the document: Guidelines on the operation of the Temporary Business Energy Support Scheme (TBESS).

What documents are required to make a claim?

A portal on ROS is open for registration and claims now. The scheme operates on a self-assessment basis; you’re not required to submit any documents when making a claim.

However, when you or your accounts person is signing up for the scheme and/or submitting a claim, it’s worth having the following documents to hand as you’ll be required to input some of the details into the system:

• A current tax clearance certificate
• Energy bills for the reference period
• Energy bills for the claim period.

If you don’t have an energy bill for the reference period because your business is new, has expanded into another location or relocated and has a new electricity or gas account, you can use a ‘deemed reference unit price’ instead of the reference unit price.

A list of deemed monthly reference unit prices for electricity and natural gas has been provided by the Sustainable Energy Authority of Ireland and published in the latest version of the TBESS guidelines.

You should retain all documents related to your claim including details of the business activity, tax clearance and energy bills – for the reference period and claim period – as Revenue may request these at a future date.

The names and addresses of the businesses that use the TBESS will be published by Revenue, which includes total amounts that have been claimed.

How much can businesses claim as part of the scheme?

The amount of support available will be 40% of the increase in the electricity and/or gas bill amount, subject to a monthly cap of €10,000. With the proposed changes the support available will increase from 40% to 50% of eligible costs from March 1st.

The payment will also rise from the current €10,000 to €15,000 per month per trade or profession from next month.

It’s possible for the limit to rise by €10,000 for each electricity account – this is subject to an overall monthly limit of €30,000 for each qualifying business. This overall cap will increase from €30,000 to €45,000 where the business is carried on from more than one location.

A unique meter point reference number (MPRN) identifier is required for each electricity account – and the MPRNs need separate electricity supply addresses.

More information on how to assess whether a business is eligible for multiple payments – with examples – is provided in the scheme guidelines referred to above.

What do the payments mean for tax purposes?

Businesses that receive any payments under the scheme must include the amounts when preparing their accounts.

Any payments you receive under the TBESS will reduce the amount of eligible expenditure – which includes fixed costs such as rent, insurance, energy and wages – that can be deducted from your income and will affect the tax due from your trading profits.

For information on the Temporary Business Energy Support Scheme, or on our audit and business advisory services please contact Deirdre McDermott.

 

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