Energy subsidies for businesses

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Brendan Burgess

Brendan Burgess

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Temporary Business Energy Support Scheme​

I am introducing a Temporary Business Energy Support Scheme to assist businesses with their energy cost over the winter months.
The scheme will be open to businesses that carry on a Case 1 trade, are tax compliant and have experienced a significant increase in their natural gas and electricity costs.
The scheme will be administered by the Revenue Commissioners and will operate on a self-assessment basis. Businesses will be required to register for the scheme and to make claims within the required time limits.
It is proposed that the scheme will operate by comparing the average unit price for the relevant bill period in 2022 with the average unit price in the corresponding reference period in 2021.
If the increase in average unit price is more than 50 per cent then the threshold would be passed and the business would be eligible for support under the scheme. Once eligibility criteria are met the support will be calculated on the basis of 40 per cent of the amount of the increase in the bill amount.
A monthly cap of €10,000 per trade will apply and an overall cap will apply on the total amount which a business can claim.
The scheme is being designed to be compliant with the EU State Aid Temporary Crisis Framework and will need to be approved by the EU Commission in the advance of making payments.
This is a significant intervention by the government in the Irish economy to protect employment. This support scheme forms a large part of our once off package. We must weaken the ability of a shock to income becoming a loss of jobs. This new policy will help employers with their rising bills, and help to save their businesses.
 
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Thanks for that information , Brendan .What criteria is there to qualify as a Case 1 trade ?
 
Just been told any business that is not a profession ... so accountants , solicitors and doctors are deemed too well off to need it.......
 
Brendan Burgess said:
I would think that energy costs form a very small proportion of their overall costs so an increase is unlikely to threaten their survival.

Brendan
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Are you sure Brendan? I'd have thought for example that dentists with specialised equipment would have sizeable energy bills. And private schools.

However, the following are regarded as being professions or the provision of professional services and as falling within the provisions of Section 441:
Accountant
Actor
Actuary
Archaeologist
Architect
Auctioneer/Estate Agent
Barrister
Computer programmer
Dentist
Doctor
Engineer
Journalist
Optician
Private School
Quantity Surveyor
Solicitor
Veterinary Surgeon.
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T McGibney said:
I'd have thought for example that dentists with specialised equipment would have sizeable energy bills.
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Nothing a dentist uses required large amounts of power. Manufacturing, particularly where significant amounts of heat is required, food processing and things like that are what they are targeting.
 
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Purple said:
Nothing a dentist uses required large amounts of power. Manufacturing, particularly where significant amounts of heat is required, food processing and things like that are what they are targeting.
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I take your point regarding dentistry. My point is really that appearing to include literally everyone except a small range of professional services firms is ridiculous.

We'll soon have bookkeepers and all sorts of unregulated health quacks claiming it, while accredited accountants and doctors can't. And there will be in time even more glaring anomalies.
 
T McGibney said:
I take your point regarding dentistry. My point is really that appearing to include literally everyone except a small range of professional services firms is ridiculous.
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The first thing that struck me is that it's going to be very expensive to administer.
T McGibney said:
We'll soon have bookkeepers and all sorts of unregulated health quacks claiming it, while accredited accountants and doctors can't. And there will be in time even more glaring anomalies.
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And rightly so! ;) :p
 
It seems crazy that some businesses are entitled to avail of the scheme and others whose electricity and gas bills have also risen by 300% and have had their profits badly hit are not.
The government need to come out and clarify with a comprehensive list and clarify who gets it and who doesn't and put people out of their misery. The whole thing is so vague to the ordinary Joe Soap.
Ironically , the €600 credit for residential properties seems to be crystal clear. If you have multiple residential properties with residential meters you get €600 for each no matter how many you have.
 
Sharpie said:
It seems crazy that some businesses are entitled to avail of the scheme and others whose electricity and gas bills have also risen by 300% and have had their profits badly hit are not.
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In what professional services businesses is energy a major cost?
 
Purple said:
In what professional services businesses is energy a major cost?
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Depends on how you define major cost. Some computing businesses would easily hit that 10k cap and seem to be excluded by the "Computer programmer" entry.
 
Accountant
Architect
Auctioneer/Estate Agent
Computer programmer
Dentist
Doctor
Optician
Private School
Quantity Surveyor
Solicitor
Veterinary Surgeon.

With any of the services above you have medium to large operations, with huge heating and lighting costs for their employees. No more , on the other hand than you have small family shops, garages, coffee shops with smaller energy bills but also badly in need of a welcome break. Are they going to be excluded because energy is not a major cost? Of course not, and rightly so but the scheme has to be fair to everyone.
 
ryaner said:
Depends on how you define major cost. Some computing businesses would easily hit that 10k cap and seem to be excluded by the "Computer programmer" entry.
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€10k a month powering computers? My desktop in work costs around 10cent an hour to run.
 
Sharpie said:
Accountant
Architect
Auctioneer/Estate Agent
Computer programmer
Dentist
Doctor
Optician
Private School
Quantity Surveyor
Solicitor
Veterinary Surgeon.

With any of the services above you have medium to large operations, with huge heating and lighting costs for their employees. No more , on the other hand than you have small family shops, garages, coffee shops with smaller energy bills but also badly in need of a welcome break. Are they going to be excluded because energy is not a major cost? Of course not, and rightly so but the scheme has to be fair to everyone.
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I suppose the logic is that the above sectors operate at high margins and so don't need the support.
It's 40% of the difference between last years cost and this years cost so probably a few thousand Euro max over the year for most of the above. There's certainly no doctor in Ireland who would notice a few thousand euro one way of the other.
 
Purple said:
I suppose the logic is that the above sectors operate at high margins and so don't need the support.
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Depends how you define margins.

Accountancy was a high margin business 30 years ago when practices were stuffed with trainees earning £1-£3 an hour. Those days are long gone.

I can't imagine there being too much in the way of margins in the private school business. The only private school in my neck of the woods went public recently because they reckoned the private model is no longer financially sustainable.

Many leading manufacturers enjoy massive margins and all will be included in the scheme.
 
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T McGibney said:
Depends how you define margins.

Accountancy was a high margin business 30 years ago when practices were stuffed with trainees earning £1-£3 an hour. Those days are long gone.

I can't imagine there being too much in the way of margins in the private school business. The only private school in my neck of the woods went public recently because they reckoned the private model is no longer financially sustainable.

Many leading manufacturers enjoy massive margins and all will be included in the scheme.
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I didn't say the logic was sound.
 
Purple said:
I suppose the logic is that the above sectors operate at high margins and so don't need the support.
It's 40% of the difference between last years cost and this years cost so probably a few thousand Euro max over the year for most of the above. There's certainly no doctor in Ireland who would notice a few thousand euro one way of the other.
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Oddly enough, in large swathes of the country, you can't find a doctor for love nor money and doctors are quitting practice quicker than new entrants are arriving, many of them saying that they're sick of continually being taken for granted.
 
T McGibney said:
The only private school in my neck of the woods went public recently because they reckoned the private model is no longer financially sustainable.
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I don't know what the issue is with private schools. They subsidise the public school system. They should be encouraged, much like private healthcare.
 
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