Due to low consumer demand and skyrocketing energy bills, businesses face uncertain times. As a way to support businesses during inflation, the government, through the 2023 budget, announced multiple strategies to help them stay afloat. Aside from providing special cost-of-living payments and cutting back on taxes, the government is helping businesses with energy bills through the Temporary Business Energy Support Scheme (TBESS). Discover what TBESS is, how to apply for the scheme and the support that businesses receive.
About the Temporary Business Energy Support Scheme
The TBESS scheme was introduced in the 2023 budget as one of the measures to support businesses affected by high energy costs. The scheme is aimed at professions and businesses impacted by the increase in electricity and natural gas costs over winter. Under the scheme, an eligible business can claim up to €10,000 monthly payments to help them with energy costs. The TBESS scheme was recently updated to provide qualifying businesses up to €15,000 per month.
TBESS is administered by Revenue and complies with European Union State Aid Temporary Crisis Framework policies. It is also self-assessed and administered through the Revenue Online Service. That means eligible businesses can easily claim the support.
Who Qualifies for TBESS?
Your business can claim the support if you carry on Case I trade or Case II profession under schedule D. Some charities and approved sports bodies conducting specific activities may also be eligible for the financial support. You can check your eligibility status via the Revenue Online Service (ROS). Aside from businesses, professions working in businesses classified for tax under Case I and II also qualify for the TBESS scheme. Some trades that can claim energy support include retail shops, cinemas, hairdressers, food & drinks suppliers, hotels and pubs. Professions eligible for the scheme include architects, accountants, engineers, solicitors, dentists, opticians and auctioneers. Charity organisations are only eligible if they carry out specific activities.
Aside from meeting the eligibility criteria, a business should be tax compliant. That means the business applying for the scheme should be registered for tax purposes, file their taxes before the deadlines and be eligible for a tax compliance certificate during the claim period. Even trades and businesses with debt warehousing arrangements can claim for energy costs, provided they remain qualify for a tax clearance within the claim period.
Before receiving support from TBESS, businesses should prove that they have experienced a substantial increase in energy or natural gas costs. The rise in energy costs should be 50% more in the claim period compared to the same period in 2021. With the updated changes, the government is proposing a 30% increase in energy costs, which makes businesses eligible for the scheme.
When Will the TBESS Scheme End?
The Temporary Business Energy Support Scheme was set to end on 28th February 2023. However, the government has extended the end date to 30th April 2023. With the proposed changes to the scheme, it may end on 30th May 2023 if the state aid approves. However, businesses can claim TBESS four mounts after the claim period. While each claim period is a calendar month, businesses can make claims of up to four months at the end of their claim period. For instance, businesses can make claims beyond 31st January 2023 and receive support for energy bills for September 2022. You can register and submit claims through the portal for up to the last four months.
How Does the TBESS Scheme Work?
The TBESS scheme applies to metered natural gas and electricity costs incurred by a business eligible for the scheme. Since the scheme is run on a self-assessment basis, eligibility is clearly defined. Businesses qualify for the TBESS scheme based on the average unit of the billing period in 2022 compared to the equivalent energy bill in 2021. If the business experienced a 50% increase in energy costs, they qualify for the scheme.
A representative of the business or the owner can register on the ROS portal, provide the necessary information and declare their eligibility. When providing details on the unit price, you include the electricity usage, standing charges and Public Service Obligation (PSO) levy. Since the PSO levy was reduced to zero on 1st October 2022, you only add the PSO levy for September claims. The unit price of electricity used to make a claim should be exclusive of VAT and supplier discounts. Also, don’t include any prepayments and arrears on your energy bills.
The Revenue system will calculate the claims you are eligible for from the information you provide. Hence, you should provide accurate information about the claim periods and reference. The system will also generate claim and reference unit prices that determine eligibility. Filling in the information doesn’t guarantee a claim from TBESS. Your business may not be eligible for the claim period if the energy bills increase doesn’t meet the required threshold. However, being ineligible for a claim in one month doesn’t mean you will not be eligible in the next month.
What Documents Do You Require to Make a Claim?
You provide the relevant information through the ROS portal, and since it is a self-assessment system, you don’t need to submit any documents to make a claim. When registering for the scheme, it is important to have the following documents since you will be required to input information available in the documents:
• Energy bills for the reference period in 2021
• Energy bill for the claim period in 2022 or 2023
• Current tax clearance certificate
New businesses may not have information on the reference period, but they can still make a claim from TBESS. You can provide the deemed reference unit price based on the information from the Sustainable Energy Authority of Ireland. When you relocate and change your gas and electricity account, you can also make a claim using the deemed reference unit price.
While documents aren’t required when making a claim, businesses should retain the documents relating to the energy costs and tax clearance since Revenue may request the information later. When your business qualifies for a claim, Revenue will publish your business name, and the total amounts claimed on the scheme.
How Much Does Your Business Qualify for in the Scheme?
The scheme will provide a claim equivalent to a 40% increase in gas or electricity bills. However, there is a monthly limit of €10,000 per business. The €10,000 monthly cap on the claim applies for September 2022 to February 2023 claim periods. Businesses operating in multiple locations have a €30,000 monthly cap with a limit of €10,000 on each electricity account. A meter point reference number (MPRN) with different supplier addresses is required for a business to be eligible for the scheme in multiple locations.
When the scheme was extended up to 30th April 2023, a few changes were made that apply to the March 2023 and April 2023 claim period. The proposed changes increase the support available from 40% to 50% of electricity coats. That means the payment from the scheme will rise to €15,000 per month per profession or trade. The overall cap increases to €45,000 per month for businesses with multiple electricity accounts.
When preparing your books for tax purposes, ensure you include the payments received under the scheme. The amount reduces the expenses eligible for tax and affects the tax due on your profits.
Conclusion
The Temporary Business Energy Support Scheme provides financial support to cushion businesses from increasing energy costs. If your business meets the eligibility requirements, you can register for the claim and provide the relevant information to receive the claims. Keep an eye on the updated changes to the scheme to enjoy its benefits.
You can check with your Payroll Provider for more details.