FDC: Knowing the finer details of new electricity costs support scheme

THE Revenue Commissioners have introduced the temporary business energy support scheme to help businesses with the increase in their electricity or natural gas costs. The scheme opened for applications from December 5th and is available to all business who are tax compliant; carry on a Case 1 or Case 11 profession and have experienced a significant increase of 50% or more in their electricity or natural gas average unit price.

A business that qualifies can claim for 40% of the increase in their energy bills. The increase in energy bills must be between the claim period and the reference period. The claim period is a calendar month from September 2022 to February 2023 and the reference period is the corresponding period in the previous year. It may be extended beyond February 2023, depending on the energy cost at that time and this will be decided nearer the time.

It will be also be available to ‘Pay As You Go’ customers provided that they meet the criteria and can supply details from their energy statements to Revenue. 

The claim is calculated by comparing the unit price for electricity or natural gas, against the same period last year and then claiming 40% of the increase, but only if the costs have increased by 50%.

The costs that can be claimed on are net of Vat and do not include any arrears or pre-payment. The allowable cost is the energy costs incurred wholly and exclusively in the running of the trade or profession and do not include any non-business costs. 

If a business is operating from your own home and there is some of the energy cost for personal use, then this will have to be excluded.

To make a claim you will need to register with Revenue for the temporary energy support scheme on the Revenue Online Services system (Ros) and complete details about your business, make a declaration confirming eligibility for the scheme and provide details in respect of the energy costs incurred in the claim period. 

The Revenue has opened the registration for claims since  November 26th and the claims are subject to a four-month time limit from the end of the claim period and are also subject to a limit of €100,00 in most cases. The costs that you claim must correspond with your business’ books and records and they will be validated by Revenue against existing tax returns. All records of the claim will have to be kept for a period of 10 years.

If a business operates from different locations, then they can submit claims for each location and the €10,000 limit is for each electricity account, but this will not apply if the business operates at the same electricity supply address or adjacent to each other. The refund that a business is due will be offset against any tax liabilities that are on their Revenue record, except if they have been warehoused or are on a phased payment arrangement.

Every business should examine their energy costs and compare them against the corresponding period last year to see if they are eligible to make a claim under the scheme. If they are eligible, they should make a claim as soon as possible to help with the large increase in the cost of energy.

• Philip Salter is an accountant with FDC Skibbereen.