Reopening of CRSS for Certain Businesses
Who can qualify?
CRSS has been resurrected for businesses which are, once again, significantly restricted from allowing members of the public to access their business premises and where turnover and certain other conditions are met. Specifically, it is available to businesses in the hospitality sector that would normally stay open later than 8pm such as bars, restaurants, nightclubs and hotels as well as indoor entertainment venues such as cinemas and theatres that are required, under specific terms of public health regulations, to close at 8pm each night from 20 December 2021 to 31 January 2022. These businesses will once again be regarded as being significantly restricted from operating for the purposes of the CRSS.
It is specifically provided however that businesses which do not ordinarily operate after 8pm (or much after 8pm), eg, a café that operates daytime hours, will not be eligible for the scheme.
New turnover threshold
For qualifying businesses, an additional measure of relief has been introduced. Specifically, the turnover threshold is being increased from 25% to 40%, which means that a business will eligible where the turnover of the business in respect of the relevant business activity in the claim period is 40% (or less) of the relevant turnover amount. This increase makes it easier for businesses to pass the turnover test.
As before, the reference period will be the calendar year 2019 in the case of a business established prior to 26 December 2019. In the case of a business established in the period 26 December 2019 to 26 July 2021, the reference period will depend on the date on which the business was established – see below.
Other conditions still apply
In order to qualify, all other previous conditions, such as having a tax clearance certificate and having complied with obligations in relations to VAT, must continue to be satisfied.
Relaxation of requirement for business to remain open
Previously, it had been a condition of CRSS that the business must have remained open. This rule has now been relaxed. There may be circumstances where it is not viable for a person, which is significantly restricted from operating under specific terms of Covid restrictions in operation from 20 December 2021, to continue carrying on the relevant business activity during the period of restrictions. An example would be a restaurant, the bulk of whose trade occurs at night-time and usually after 8pm.
In such circumstances, the business can make a claim for support under the CRSS in respect of the relevant business activity where the eligibility criteria are met. To qualify, the person must have actively carried on the relevant business activity up to the date of the latest Covid restrictions and have an intention to continue carrying on that activity when restrictions are eased.
Registration
It is necessary for a qualifying business to re-register for CRSS as before, including the provision of necessary information and signing the necessary declaration.
Expiry date
For the moment, CRSS is due to expire on 31 January 2022. The Revenue guidance notes therefore make reference to this date on a number of occasions.
Amount that can be claimed
For most businesses, the claim calculation is unchanged:
For businesses established prior to 26 December 2019, the weekly amount will be calculated by reference to turnover for the business activity for the period from 1 January to 31 December 2019:
- 10% of average weekly turnover for 2019, so long as it does not exceed €20,000, and
- 5% of so much of average weekly turnover for 2019 that exceeds €20,000.
The claim will comprise this weekly amount multiplied by the number of weeks in the claim period (up to the €5,000 weekly limit).
Where a person carries on more than one relevant business activity in the same business premises, the amount that can be claimed in respect of all relevant business activities will be capped at €5,000.
For businesses established between 26 December 2019 and 12 October 2020, the weekly amount will be calculated by reference to turnover for the period on the date the business commenced and ending on 12 October 2020. These businesses are now referred to as “Category A New Businesses”.
Category B New Businesses
There is now a separate category for businesses that commenced between 13 October 2020 and 26 July 2021. Previously, no relief was due for these businesses. For these Category B New Businesses, relief is now available with the weekly amount calculated by reference to turnover for the period commencing on the date on which the business commenced and ending on 26 July 2021.
For both Category A and Category B New Businesses, where the business was prohibited from operating due to Government restrictions in any week, and can demonstrate to Revenue that the business received no turnover in that week, then that week can be excluded for the purposes of calculating the average weekly turnover. This is of benefit to businesses.
Restart payments are available as before, for businesses who reopen following Government restrictions.
A link to the latest Revenue guidelines is here
Conclusion
While CRSS is now limited to businesses in certain limited categories, this CRSS benefit is likely to be significant for those impacted businesses.
If you have any queries, please email or phone your usual PSC contact.