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Tax Incentives

Alternative to Stay and Spend Scheme not being examined, says Paschal Donohoe

The scheme was set up last year to encourage people to holiday at home and is terminates at the end of this month.

FINANCE MINISTER PASHCAL Donohoe has said that an alternative to the government’s Stay and Spend Scheme is not being examined at present by his department. 

Last October, the government launched the Stay to Spend scheme, which allowed taxpayers claim a maximum of €125 back in tax credits on their spending in the hospitality sector until 30 April 2021.

To qualify for the maximum amount, you must spend up to €625 (or €1,250 for married couples or civil partners) in restaurants, pubs, hotels, B&Bs and other qualifying businesses. 

However, the scheme never really took off due to restrictions being imposed in the autumn up until the present.

With the scheme due to expire at the end of the month, some are querying if it will be extended or if an alternative voucher scheme will be rolled out in a bid to boost hospitality and tourism. 

However, responding to a parliamentary question, Donohoe said: 

“My Department is not examining any alternative to the Stay and Spend Tax Credit Scheme at the present time.”

He said the scheme is scheduled to terminate at the end of this month, adding that while he is “very mindful of the significant difficulties that remain to be faced by the hospitality sector, I have made the point previously that the broad interests of taxpayers also need to be taken into account”.

“These may not be best served by extending the scheme over the summer months in circumstances where we will all be staying at home and hopefully holidaying in Ireland,” he added.

“This is particularly the case when other very significant support measures will remain in place. Taking these factors into account, it may be more appropriate to take stock again in a number of months’ time and assess if the position needs to be reconsidered at that point,” said Donohoe.

Speaking about the Stay and Spend Scheme earlier this week, Tourism Minister Catherine Martin said the unpredictable nature of the pandemic has meant that the scheme was “completely underutilised”.

The tourism minister said she is in favour of a new scheme to provide a boost to the industry in the off-peak season again.

Adrian Cummins, CEO of the Restaurants Association of Ireland (RAI), said there was no consultation with the industry in advance of the launch of the scheme, which is now becoming the norm with the hospitality sector.

He said the RAI would like to see a scheme similar to the Eat Out to Help Out Scheme in the UK.

The Eat Out to Help Out Scheme (EOHO Scheme) was one of the UK Government’s policy measures aimed to support businesses reopening after the lockdown period. 

Under the scheme, the UK Government provided 50% of the cost of food and/or non-alcoholic drinks eaten at participating businesses. It helped businesses with cash flow and drove demand which in turn accelerated employment, he said.

Cummins said restaurants are seeking a commercial rates waiver to the end of 2021, the Vat rate of 9% extended to 2025, the continuation of EWSS – Employment wage support scheme until next March and the CRSS payment to the end of 2021.

With additional reporting by Ian Curran

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