Covid Restrictions Support Scheme published in Finance Bill 2020

PSC Accountants & AdvisorsCovid Covid Restrictions Support Scheme published in Finance Bill 2020

Covid Restrictions Support Scheme published in Finance Bill 2020

What is the Covid Restrictions Support Scheme (CRSS)
The Covid Restrictions Support Scheme (CRSS) announced on Budget day provides targeted support to businesses that are forced to close temporarily or operate at a significantly reduced level because of COVID-19 restrictions that either prohibit, or significantly restrict, customers from accessing their business premises. Generally, this refers to COVID-19 restrictions at Level 3, 4 or 5 of the Government’s Plan for Living with COVID-19. We have summarised the key features of the scheme below.


1. Who can qualify for the CRSS?
The scheme is available to affected self-employed individuals (sole traders or partnerships) and companies who carry on a trade or trading activities, from a business premises located wholly within a geographical region for which COVID-19 restrictions are in operation. It should be noted that professional service activities do not qualify.


A business will qualify under the scheme where:

  • the business has been required to temporarily shut their premises or operate at significantly reduced levels COVID-19 restrictions that either prohibit, or significantly restrict, customers from accessing their business premises; and
  • can demonstrate that turnover for that period (i.e. the claim period) will be no more than 25% of the average weekly turnover of the business in 2019 (or average weekly turnover in 2020 in the case of a new business). Please note that this 25% test is an improvement from the Budget day announcement of 20%.

A list of qualifying businesses outlined in Revenue’s guidance notes is shown below in Appendix I. This Appendix also outlines some types of businesses which, at present, do not qualify.
Businesses that are exempt from tax, eg, charities and businesses that have been granted a sports body tax exemption, are not eligible for the CRSS.
The claim period refers to the period in which the COVID-19 restrictions are in place. The legislation also provides for an extension period, if required.


2. How much can a business claim under the scheme?
The support will be provided by way of a cash subsidy for an amount equal to:

  • 10% of the average weekly turnover of an affected business up to €20,000 and
  • 5% thereafter
  • subject to a maximum weekly payment of €5,000
  • for each week that their business qualifies.

If a business initially feels that it cannot qualify, but it later transpires that it can qualify, that business may then be entitled to apply for CRSS, as long as a claim is made within 8 weeks of the commencement of the restricted period (generally from 13 October 2020).
In order to make a claim under the scheme, a business must satisfy a number of other conditions in addition to the 25% ‘turnover test’ above, including:

  • Having an up to date tax clearance certificate in place
  • Complying with all VAT obligations, if registered
  • Registering to claim the CRSS on ROS
  • Making a declaration on ROS that they satisfy the conditions to make a claim
  • Having adequate books and records available to be able to determine:
    • The link between Covid 19 and the impact on the business
    • Average weekly turnover for 2019/2020
    • The turnover attributable to each business premises.


3. Can a new business formed in 2020 claim CRSS?
Yes, a new business formed in 2020 may claim under the CRSS, where it can demonstrate that turnover for the claim period will be no more than 25% of the average weekly turnover of the business in 2020. See below for further details.


4. How do you calculate the amount of the CRSS claim?
In order to calculate the subsidy for the claim period, the business must firstly determine the average weekly turnover of the business in the calendar year 2019 (or average weekly turnover from the date the business commenced to trade to 12 October 2020, if the business commenced on or after 26 December 2019). This is based on the VAT-exclusive turnover for 2019. If it qualifies, the business is entitled to a cash payment as outlined in Section 2 above.
Turnover is further explained in Section 9 below.
Special rules are in place for Partnerships.


5. How can a business register for CRSS and submit a claim?
5.1 The business must firstly register for CRSS on ROS. To register, the business must provide certain details including:

  • the name, address, details and description of the business activity
  • the location(s) where it is carried on
  • average weekly turnover as outlined in Section 4 above
  • date of commencement (for new businesses)
  • income other than trading income.

Registrations for CRSS opened on 3 November 2020.
Where an agent is registering, an agent link form must be submitted. A sample form is available through the eRepayments system on ROS.

5.2 Once registered, the business must complete an electronic claim form to claim the subsidy and provide Revenue with the details of their claim. These details include:

  • business premises details
  • claim period start week
  • claim period end week.

5.3 The business must also submit a declaration for the claim period, stating that it satisfies the conditions of the scheme.


6. When can a business submit a claim under the scheme?
A claim in respect of the subsidy must be made no later than 8 weeks from the date the claim period commences (i.e. generally from 13 October 2020).
We expect that the claims process will be available through ROS from mid-November, through the eRepayments system.

There are two types of claim period:

  • a Covid restrictions period, which commenced on 13 October 2020 and which will end on 1 December 2020, and
  • a Covid restrictions extension period, which will only apply if the Covid restrictions period is ever extended.

For claims between 13 October and mid-November (when claims are possible via ROS), it will be possible to combine all weeks into one claim.
For subsequent periods, it will be possible to make a claim immediately. A separate claim must be made for each of these subsequent weeks.


7. What is a “business premises”?
For the purposes of the CRSS, a business premises is a building, or similar fixed physical structure. Mobile premises, etc, do not meet the definition of business premises. Other examples of excluded items include:

  • taxis, vans, trucks or similar vehicles
  • stalls such as market stalls or trade fair stalls, and
  • circuses or fun fairs which are not permanently in place.


8. Are there rules regarding a “business activity”?
Where a person carries on a business activity from multiple business premises, then the business activity carried on from each business premises, located in a geographical region subject to Covid restrictions, will be regarded as a relevant business activity. Transactions are apportioned to each business premises on a “just and reasonable basis”. This is for the purpose of distinguishing between premises which qualify and those that do not qualify.
A person may carry on more than one relevant business activity from the same business premises, such as where the person carries on separate trades from that premises. Depending on the particular circumstances, some or all of those relevant business activities may qualify for the CRSS. Each relevant business activity will be assessed on its own merits.
If a person carries on more than one relevant business activity in the same business premises, the amount of the CRSS that can be claimed in respect of all relevant business activities is capped at €5,000.
In cases where customers of a relevant business activity are restricted from accessing substantial elements of the business premises, eg, hotels, it will be accepted that the business will be eligible to make a claim under the CRSS.
If a person carries on a relevant business activity as part of a wider trade, that relevant business activity is to be treated as a separate trade for the purposes of determining the relevant turnover amount. The total turnover of the trade must be allocated between the separate trade and the wider trade on a “just and reasonable basis”.


9. How is Turnover calculated?
Turnover is to be calculated in accordance with the correct rules of commercial accounting.
For the majority of claimants, turnover will simply be the total sales made by the person (exclusive of VAT).
Where the person is in receipt of other types of income, such as grants and public funding, regard must be had to the applicable accounting standards and required recognition treatment of such income.
For the purposes of the CRSS, a self-employed individual in receipt of the Pandemic Unemployment Payment will not include that payment as part of turnover.


9.1 What Accounts figures are used?
For established businesses with an accounting period ending on 31 December 2019, the relevant turnover amount will be based on the accounts made up to that date.
For established businesses with an accounting period that does not end on 31 December 2019, the calculation of the relevant turnover amount of the business will be determined on a pro-rata basis, by apportioning the turnover of the business included in two or more sets of accounts that cover the period 1 January 2019 to 31 December 2019.
However, for accounting periods ending in March 2020 or later, taxpayers may choose to use the actual turnover figures for their business in the period from 1 January 2019 to 31 December 2019, since turnover figures post March 2020 may have been significantly affected by Covid 19.
For new businesses who were prohibited from operating in a week or weeks in the period from commencement to 12 October 2020, and can demonstrate to Revenue that the business received no turnover in that week or weeks, then that week or weeks can be excluded for the purposes of calculating the average weekly turnover.


10. How will the payment under the scheme be treated for tax purposes?
The subsidy payment is a taxable receipt.


11. What happens if a business submits a claim that it is not entitled to?
There are provisions for interest, penalties and publication where incorrect claims are made and where the subsidy has not been repaid. However, provided the taxpayer repays the CRSS as soon as is reasonably practical, the above will not be applied.


12. How long is the duration of the scheme?
The scheme commenced on 13 October 2020 is due to expire on 31 March 2021 but may be extended.


13. Where can I find further information on CRSS?
If you have any queries on CRSS, please call your usual PSC contact.

Updated Revenue guidance on the CRSS will be made available on our webpage once available.

Revenue can be contacted directly through MyEnquiries using the following categories:

  • eTax Clearance queries: Select “Enquiry relates to” and “Tax clearance” and “More Specifically” – “Tax Clearance”
  • CRSS queries: Select “Enquiry relates to” and “COVID restrictions support scheme (CRSS)” and “More Specifically” – “CRSS”
  • Alternatively, you can contact the Revenue Commissioners with queries in relation to CRSS on 01 738 3663.


Appendix I

The public health restrictive measures, as referenced in the Level 1-5 Framework for Restrictive measures broadly apply to the following business:

  • Commercial wedding venues
  • Commercial indoor and outdoor events
  • Commercial sporting events
  • Gyms, leisure centres and swimming pools
  • Museums, public galleries and other similar cultural attractions
  • Bars, cafes and restaurants (including Hotel bars, cafes and restaurants)
  • Pubs, Nightclubs, discos and casinos
  • Hotels, B&B’s, Guesthouses and similar accommodation providers
  • Retail (inclusive of services)
  • Commercial park, commercial children’s play centres and theme parks


The following businesses may not qualify, as matters stand at the moment:

  • Events Businesses
  • Travel Agents
  • Coach Hire Companies
  • Performers
  • Photographers
  • Service Providers
  • Small Food Producers
  • Catering Supply Companies


Example – individual operates a pub in Tralee

Mr. A has been running a pub (that does not serve food) in Tralee for many years. In the year ended 31 December 2019, his turnover from the business was €663,000 (excluding VAT). His VAT returns are up to date and he has tax clearance. On 15 March 2020, he closed the pub to customers in line with Government restrictions. The pub has remained closed for business since that time.

As of 13 October 2020 (the date the CRSS was announced), Level 3 restrictions under the Living with Covid-19 Plan were in place for Co Kerry. These mean that the pub will have to remain closed and, as a result, Mr. A expects that he will have no turnover for the foreseeable future.


Based on:

a) the fact that official Covid restrictions are in place which prohibit customers from accessing the pub, requiring him to temporarily close his pub and

b) Mr. A’s reasonable expectation that he will have no turnover

he is entitled to apply to Revenue for a subsidy (Advance Credit for Trading Expenses – ACTE) for the period from 13 October, which constitutes a claim period.

The amount of the CRSS that he is entitled to for this claim period will be calculated by reference to his turnover for 2019 and the number of full weeks that comprise the claim period, as follows:

Average weekly turnover 2019 €12,750 (i.e. €663,000 / 52)
10% of €12,750 ………………………………………………………..€1,275
Number of full weeks (say to 1 December 2020)……………. 7
€1,275 X 2 ………………………………………………….CRSS is €8,925

If the restrictions for Co Kerry are extended, with the result that his pub remains closed and the pub will have no turnover, he can make a subsequent claim for the extended period of restrictions, which will constitute a new claim period, and on making a further claim he will be entitled to a payment of €1,275 for every week of the new claim period.


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