Staycation scheme: details of tax breaks for holidaymakers revealed

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Sarah Mooney
Details of a scheme designed to encourage people to staycation and eat out in Ireland have been revealed as part of a Government effort to support the hospitality sector.

The Stay and Spend scheme will provide a tax credit of 20 per cent to anyone who spends up to €625 in restaurants, pubs, hotels or B&Bs between now and next spring.

People will be able to submit receipts through the Revenue Receipts Tracker app and claim back some of their spend to receive a maximum of €125 in income tax credits.

“While many sectors have taken a hit, the hospitality industry is undoubtedly one of the worst affected by the public health measures which have had to be imposed to stop the spread of the virus,” Taoiseach Micheál Martin said at the scheme’s launch today.

“We recognise the strain that restaurant owners, hoteliers, bar and café owners are under and have taken steps to help them through this difficult period.”

'Complicated'

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The tax break scheme aims to drive sales in the hospitality sector during the off-season following the impacts of the Covid-19 pandemic, and will come into effect on October 1st.

The scheme is part of the Government’s July Jobs Stimulus, with Minister for Finance Paschal Donohoe saying the hospitality sector was “vital to the Irish economy and accounts for over 10 per cent of the country’s workforce.”

The Government is now encouraging accommodation and food businesses to register with Revenue to participate in the scheme, however, its launch comes as a Co Clare hotelier said it was too complicated with “too many hoops” for people to jump through to avail of the tax rebate.

Individual taxpayers can avail of the scheme as follows:

  • Tax relief will be provided on accommodation and food, including soft drinks but not including alcohol. In the case of food, consumption on the premises is required to avail of the scheme.
  • To benefit from the scheme, an individual will need to register by downloading the app and providing their name and PPS Number, and having an income tax or USC liability against which the tax credit can be set.
  • A minimum spend of €25 per person per time on qualifying expenditure such as accommodation, food and non-alcoholic drinks is required, with a maximum spend limit of €625 including VAT over the life of the scheme.
  • For married couples who are jointly assessed, the maximum spend over the life of the scheme will be €1,250.
  • The taxpayer will submit the receipt by taking a photograph of it using a mobile phone and submitting it to Revenue using the Revenue Receipts Tracker App. The taxpayer may continue to submit receipts until the cap on expenditure of €625 is reached.
  • Taxpayers will receive a refund of 20 per cent of the vouched cost verified by a receipt from the establishment through income tax, with a maximum tax credit of €125 per person.
  • The taxpayer will get the benefit of the credit in the year after the expenditure is incurred.
  • The scheme will run from October 1st 2020 to April 30th 2021, including over the Christmas period. The expiry date may be altered by the Minister for Finance.

Businesses can qualify to participate in the scheme as follows:

  • The business must be registered for VAT.
  • It must have a current tax clearance certificate.
  • It must be accredited or registered with relevant official bodies as appropriate, such as Fáilte Ireland and the HSE Environmental Health Service.
  • It must register with Revenue to participate.
  • It must display appropriate signage indicating participation in the scheme.

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