Helping to keep the lights on with the Temporary Business Energy Support Scheme

Last year I published a book called “Crisis” outlining 25 Business Leaders’ views in dealing predominantly with business issues surrounding the Covid crisis. All royalties go to our Lady’s Hospice in Harold’s Cross. My sincere thanks to all contributors and to Tánaiste Leo Varadkar for writing the book’s foreword. It’s working title was “Keeping the lights on when everyone was at home”. Little did we know the energy crisis coming our way.

On 25 November the Minister for Finance and the Tánaiste issued a press release welcoming EU State Aid approval for the Temporary Business Energy Support Scheme (TBESS). Minister Donohoe explained “TBESS is the largest single item announced as part of Budget 2023…[it] will provide much needed support to thousands of businesses across the country who are experiencing a material shock to the price of their energy inputs”. He said the European Commission’s approval paved the way for Revenue to open the online system for registrations for the scheme and to accept claims under the scheme from early December. He continued that businesses should start to receive payments under the scheme as soon as the Finance Bill is enacted later this month.

The Tánaiste urged business owners and managers to have their bills ready “and make sure that your claim can be processed by Revenue without any undue delay”. Revenue published “version 2” of its guidance on the same day as the above press release and have updated that guidance recently.

The Minister noted at the Finance Bill Committee stage debates that TBESS provides support for companies, self-employed individuals and partnerships carrying on a trade or profession. He continued that “Small and medium sized companies … are facing real difficulties across this period and this scheme will help with that but larger companies tend to be larger employers and the maintenance of that employment in the challenging period that we are now in is something that the State has to play a role in. That is why TBESS does not look at what is happening to turnover or to profitability; it is all about the energy cost change”.

We’ve seen the need for speed in connection with external crises in the past couple of years. We’ve brought about the Temporary Wage Subsidy Scheme (TWSS), the Employment Wage Subsidy Scheme (EWSS), the Covid Restrictions Support Scheme (CRSS) and the Business Resumption Support Scheme (BRSS). And now we have the TBESS.

The scheme, administered by Revenue, provides for a cash payment to qualifying businesses. TBESS is targeted at businesses carrying on a trade or profession that have experienced significant increases in their energy costs. Certain sporting bodies’ or charities’ activities that would be taxable as carrying on a trade but for exemption are included in the scheme. Collectively, these comprise ‘eligible businesses’ for the purposes of the TBESS.

The scheme will operate in respect of electricity and natural gas costs relating to the period 1 September 2022 to 28 February 2023. Claims may be made in respect of each calendar month (‘claim period’) within this period. The first claim period is September 2022 and businesses are now able to make claims through the Revenue Online Service (ROS) from 5 December 2022. The scheme operates by reference to bills or statements for the metered supply of electricity and natural gas through electricity accounts or gas connections.

In broad terms, to be eligible to make a TBESS claim, the business must be able to demonstrate that the average unit price for electricity or natural gas on the relevant bill has increased by 50% or more as compared to the average unit price that is 12 months prior to the claim period to which the relevant bill relates. This 50% increase is called the ‘energy costs threshold’.

Once the eligible business has passed the threshold and satisfies other Ts and Cs, then it’s a ‘qualifying business’. Such businesses can claim a Temporary Business Energy Payment (TBEP) of 40% of its eligible cost (the increase between the electricity or gas bill as compared to a bill amount in the applicable reference period and subject to a cap for each monthly claim period).

Time is of the essence here because a TBEP claim must be made within 4 months of the end of the claim period to which a particular energy bill relates, and the clock is ticking. Where an energy bill covers only part of a claim period then it will be compared with a proportionate amount of the energy costs for the reference period in determining the eligible cost amount.

Provision is made for businesses to assess their eligibility and, where appropriate, to make a claim in respect of an energy bill for a particular electricity account or gas connection for which the business does not have a bill for the reference period e.g. they started up recently and weren’t around in the previous year.

There is a monthly cap, which applies on a per trade basis or a per profession basis. In general, the support available in respect of electricity and natural gas costs is subject to a monthly cap of €10,000 per trade or profession. Where, however, a business carries on its trade or profession from more than one location, as identified by the business having multiple electricity or natural gas accounts in different locations, the cap may be increased by €10,000 per account subject to an overall monthly cap of €30,000 per trade.

To make a TBESS claim, the person should be eligible for a tax clearance certificate and has complied with their tax registration, payment and tax return filing obligations. As with other support schemes provision is made for publishing the names, addresses and amounts received by claimants by the Revenue website. Of course, the person making a claim should retain evidence supporting their TBESS which may be requested by Revenue should they come checking.

The above is a brief overview of almost 30 pages or TBESS legislation and 100 plus pages of Revenue guidance. This is a substantial relief and I’d echo the government’s press release to make sure to claim what’s yours.

Please note this article first featured in the Business Post on Sunday 11 December 2022 and was re-published kindly with their permission on our website.