BUSINESS ENERGY SUPPORT SCHEME (TBESS) - UPDATED

TBESS - April 2023 - Update

TEMPORARY BUSINESS ENERGY SUPPORT SCHEME (TBESS) EXPLAINED & UPDATED – APRIL 2023 The amount of grant assistance available under TBESS has been increased and the scheme has been extended as far as July 2023. The latest amendments are set out here. UPDATE: These were passed into law in May 2023 and a link to the relevant guidelines is shown at the bottom of this article.

By Yvonne Moloney A.C.C.A., C.T.A. – Tax Accountant, DHKN

The Temporary Business Energy Support Scheme or TBESS was warmly welcomed by business owners and other organisations across the country when it was announced as part of Budget 2023.

The scheme was expanded to include professions and new businesses in December 2022. Further changes and potential extensions were announced last month and these are shown in bold type below.

The main goal of the scheme is to keep as many businesses as possible from having to close permanently or temporarily and prevent employee layoffs. It also provides assistance to charities and sporting bodies.

UPDATE 17 April 2023: State Aid approval has been received for the changes which required it.

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TBESS - April 2023 - Update

In short…

What is the scheme?

Financial aid for businesses and other organisations being hit with spiralling energy costs.

Who can apply?

Any business, charity or sporting body if they can show that the unit cost on their electricity or gas bills increased by 50pc or more this year compared to the same period last year.

Subject to legislation, the level of increase will be reduced to 30% and will apply retrospectively from 1st September 2022. This legislation is in place from mid-April 2023.

How much is available?

The scheme will pay out 40% of the increased cost of bills up to a limit of €10,000 per qualifying business per month.

From 1st March 2023 these increase to 50% and €15,000 per month. It was announced on 17 April 2023 that State Aid approval had been received and therefore these changes are effective.

The Detail…

As ever with such schemes there is an amount of detail and procedures to go through to understand if your organisation is eligible before making a claim.

Period covered The scheme is intended to operate in respect of energy costs relating to the period 1 September 2022 to 30 April 2023.

The scheme was extended to 31 May 2023, with an option to extend to 31 July 2023.

It was announced on 17 April 2023 that State Aid approval had been received and therefore these changes are effective..

Eligible businesses TBESS is available to businesses that carry on a trade or profession chargeable to tax under Case I or II including self-employed individuals, companies and partnerships.

It also includes charities and sporting bodies which would be chargeable Case I or II but for an exemption.

Qualifying Businesses To make a claim in respect of an electricity bill or a natural gas bill, a business must demonstrate that the average unit price for electricity or gas on the relevant bill has

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TBESS - April 2023 - Update increased by 50% or more as compared to the average price in the reference period.

This is known as the “energy cost threshold”.

The energy cost threshold will be reduced to 30% and this reduction will apply retrospectively from 1 September 2022. It was announced on 17 April 2023 that State Aid approval had been received and therefore these changes are effective.

The Reference period for claims related to 1 September 2022 to 30 April 2023 is the monthly period that is 12 months prior to the claim period. The claim period is a calendar month between 1 September 2022 and 30 April 2023. Where an electricity or natural gas bill covers only part of the claim period then it will be compared with a proportionate amount of the electricity or gas costs for the reference period.

This was extended to 31 May 2023, with an option to extend to 31 July 2023. This will extend the relevant Reference periods. It was announced on 17 April 2023 that State Aid approval had been received and therefore these changes are effective.

Amount of claim Once the eligible business has passed the energy cost threshold in relation to a particular bill and meets the other conditions noted below, it is a qualifying business and is entitled to claim a Temporary Business Energy Payment.

The amount that can be claimed is 40% of the uplift in the bill as compared to a bill amount in the reference period subject to a cap for each monthly claim period.

From 1st March 2023 this increased to 50% of the uplift in the bill compared to the corresponding bill in the Reference period, subject to the caps below. It was announced on 17 April 2023 that State Aid approval had been received and therefore these changes are effective.

Caps 1.

The aggregate amount that can be claimed by a qualifying business in each monthly claim period is €10,000. This increased to €15,000 from 1 March.

2. Where the trade of a qualifying business operates across more than one location, each with an electricity supply address in a different location and not adjacent to each other, the business will be eligible for an increased cap of €10,000 (€15,000 from 1 March 2023) per MPRN up to a max of €30,000 per monthly claim period (€45,000 from 1 March 2023).

3. TBESS is part of the government’s Temporary Crisis Framework which will include further supports for business, the details of which are to be finalised.

The aggregate amount that may be claimed by a single undertaking carrying on one or more qualifying businesses under the Temporary Crisis Framework (including TBESS) shall not exceed: • €250,000 for a farming trade • €300,000 for trade related to fishery and aquaculture products • €2,000,000 in any other case.

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TBESS - April 2023 - Update Single Undertaking A Single Undertaking includes all enterprises having at least one of the following relationships with each other: •

one enterprise has a majority of the shareholders’ or members’ voting rights in another enterprise;

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one enterprise has the right to appoint or remove a majority of the members of the administrative, management or supervisory body of another enterprise;

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one enterprise has the right to exercise a dominant influence over another enterprise pursuant to a contract entered into with that enterprise or to a provision in its memorandum or articles of association;

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one enterprise, which is a shareholder in or member of another enterprise, controls alone, pursuant to an agreement with other shareholders in or members of that enterprise, a majority of shareholders’ or members’ voting rights in that enterprise.

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In case of entities having direct or indirect relationships with public bodies they are not considered to be a single undertaking.

Other conditions The eligible business has complied with their tax obligations.

The eligible business is throughout the claim period eligible for a tax clearance certificate.

The eligible business must register for the scheme on ROS and make a declaration that they satisfy the relevant conditions. Claims will then be made through ROS. The Claim must be made within 4 months of the end of the relevant claim period which means that claims for the first eligible period, September 2022, should be made by 31 January 2023. Revenue has extended this deadline and claims for September 2022 may be made beyond January 2023.

Other points to note •

Where an electricity or gas account relates to more than one qualifying business, the charges should be apportioned on a just and reasonable basis between the trades of each qualifying business.

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Where part of the electricity or gas bill in the claim period is not wholly and exclusively related to the trade of the qualifying business the reference amount that the bill is compared to is also reduced proportionately.

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The legislation also includes provisions which will allow businesses that did not have an electricity or natural gas connection in the relevant month in the previous year to access the scheme. The deemed reference unit prices for

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TBESS - April 2023 - Update electricity and natural gas (provided by the Sustainable Energy Authority of Ireland) are included in Revenue's guidelines.

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Customers who use Pay-As-You-Go (PAYG) systems for electricity are also now included in the scheme. PAYG customers should base their claims on statements rather than invoices.

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The portal for registrations opened on 26 November 2022

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Claims can be made through ROS.

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Businesses are being asked to take steps to understand and reduce their energy use by completing the Climate Toolkit 4Business. The completion of the toolkit is not a legal requirement and has no impact on the assessment of a business' eligibility for TBESS.

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A new grant for businesses using LPG or Kerosene and which cannot avail of the existing TBESS for those energy supplies will be made available. Details of this scheme have yet to be confirmed.

For further Information Get in touch with DHKN through your regular relationship manager or contact info@dhkn.ie or +091 782020.

Revenue updated its guidelines for the scheme and you can find a complete copy here.

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