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2024 RDTC claims Pre-notification requirement
The Finance (No.2) Act 2023 introduced key changes to the Research and Development (R&D) tax credit regime, most notably the increase in the rate of the R&D tax credit (RDTC) rate from 25% to 30%.
The TBESS was introduced to support businesses with increases in their electricity or natural gas costs. It was subject to much criticism at the outset, and take-up was poor due to the qualifying criteria to access claims being viewed as too stringent. The view of one general manager of a Dublin hotel was that many businesses might be eligible for only low levels of support. As a result of the criticisms made, enhancements were announced to the TBESS and have now been signed into law. Below is a summary of the changes made and a brief overview of the TBESS and how it works.
Initially, the scheme was to operate from September 2022 to February 2023. The scheme is now extended to 31 July 2023.
The monthly limit on payments for claims periods from 1 March 2023 onwards has increased from €10,000 to €15,000 for businesses operating from a single location and €30,000 to €45,000 for businesses operating across multiple locations.
Energy costs were required to have increased by 50% over the same month in the prior year, and this is now reduced to 30%, so that now businesses carrying on a trading activity that have suffered at least a 30% increase in their energy costs over the same month in the prior year, looking on a month by month basis, should qualify for the scheme. The reduction to 30% is effective from 1 September 2022.
The amount of the claim, referred to as the Temporary Business Energy Payment (TBEP), was restricted to 40% of eligible costs, eligible costs being the increase in energy costs in the claim month over those for the same month in the prior year when the scheme was introduced. The TBEP that can now be claimed is increased to 50% from 1 March 2023.
A claim under the scheme can now be made, in respect of any month over the period from September 2022 to July 2023, until 30 September 2023.
The TBESS is administered by Revenue and provides a cash payment to qualifying businesses. It is aimed at businesses carrying on a trade or profession that have experienced at least a 30% increase in energy costs over the prior year. Sporting bodies and charities carrying on a trading activity also qualify for the scheme, provided they meet the requirement of the 30% minimum increase in energy costs.
To make a claim under the TBESS, the business must be eligible for a tax clearance certificate throughout the claim period and have complied with their tax registration, payment and tax return filing obligations.
It is necessary to register for the TBESS on Revenue’s online system, ROS, and to provide information including:
The business must also complete a claim form on ROS and have made a declaration via ROS that the qualifying conditions are satisfied.
The business (including a charity or sporting body carrying on a trade and eligible to make a claim) must have either an active Corporation Tax or Income Tax registration to make a claim.
Review the TBESS Guidelines from Revenue.
An income and corporation tax exemption is provided for charities in respect of the profits of a trade carried on by the charity, provided that it applies the profits solely to the purposes of the charity and either:
or
An example given in the Irish Revenue Commissioners’ TBESS guidelines is outlined below (Example 6 from the Guidelines).
A charity in Cork works with people in the local community who have a disability.
The activities of a sporting body that are usually regarded as trading in nature include:
Where the sporting body is engaged in a mix of trading and non-trading activities, it may be necessary to carry out an apportionment of energy costs between those relating to the trading activities and those unrelated.
If you have any questions in relation to the above, or if you would like to discuss this topic further, please contact a member of the Mazars corporate tax team.
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