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How will the government's 'Stay and Spend' scheme work and how can you claim your tax credits?

Taxpayers can claim back 20% of their spend on food and accommodation as a tax credit.

Image: Sam Boal

TODAY, the government officially launched its ‘Stay and Spend’ initiative, which it hopes will give a much-needed boost to Ireland’s hospitality and tourism sector in the lean autumn and winter months.

Speaking at today’s launch, Taoiseach Micheál Martin said the government recognises “the strain” that the Covid-19 crisis has put on the restaurant, hotel and bar operators.

“While many sectors have taken a hit,” he said, “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.” 

With that in mind, let’s take a look at how the scheme actually works, what you are entitled to and how exactly you will be able to claim your tax credit.

What is the ‘Stay and Spend’ initiative?

Starting on 1 October, taxpayers will be able to claim back 20% of their spend on food and accommodation as an income tax credit until the scheme ends in April 2021.

Spending is capped at €625 per individual or €1,250 for married couples or civil partners.

This means that the maximum you can claim back under the initiative is €125 for one person or €250 per couple.

According to Revenue, the credit will then be offset against your income tax liability and “will be applied after all other allowances, deductions or reliefs have been given to the taxpayer”. 

So do I have to spend €625 to get anything back?

No, you don’t.

The €625 and €1,250 figures are the upper limits on expenditure — in other words, you will only be able to claim back 20% of what you spend up to those ceilings.

The flip side is that you have to spend at least €25 to qualify for a tax credit under the scheme.

As Adrian Cummins, chief executive of the Restaurants Association of Ireland, explained this morning, “In line with the minimum spend threshold, each taxpayer must have incurred expenditure of at least €25 in each individual transaction in order to include it in his or her claim.

“As such, if the total bill is €80 and it is split equally between four customers, none of them will be able to include this cost in their claim for the ‘Stay and Spend’ tax credit as they will not have incurred expenditure of at least €25 each in relation to that transaction.”

What services are covered under the scheme?

You first have to spend your money on certain ‘qualifying services’.

These include holiday accommodation, food and non-alcoholic drinks.

Revenue defines ‘holiday accommodation’ as hotels, guest houses, holiday hostels, youth hostels, caravan and camping parks and self-catering properties and B&Bs that have registered with Fáilte Ireland.

(If they have not already registered with the tourism authority, they can do so here).

To receive a tax credit on your food and drink spend, the meal has to be prepared for the customer and has to be consumed on the premises in which it is sold.

That means no burger kits or take-outs.

Cafés, restaurants and pubs serving food can all register for the initiative.

In its guide, Revenue also explains that “food may be served with or without a non-alcoholic drink, but where drink (either alcoholic or non-alcoholic) is served without food, it is not a qualifying service”.

So no booze?

Nope.

Do I have to be on my holidays to avail of the scheme?

Not at all.

The guide explains, “There is no requirement for taxpayers to be on a ‘staycation’ to avail of the scheme.

“Expenditure incurred in a taxpayer’s local area may be included in a claim for the ‘Stay and Spend’ tax credit if it meets the definition of qualifying expenditure.”

How can I tell if a restaurant, hotel or hostel is participating?

All businesses that wish to take part in the scheme have to register and receive confirmation of their eligibility.

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A list of businesses that have signed up to participate in the scheme is currently available on the Revenue.ie website.

To be eligible, businesses have to provide one of the qualifying services mentioned above, they have to be registered for VAT and they have to hold a tax clearance certificate. 

How can I claim my rebate?

There are a few ways to do it.

The simplest thing is to get the Revenue’s new ‘Receipt Tracker’ app, which has just been launched and is available for download on app stores now.

Once downloaded, taxpayers will be required to register for the scheme by providing their PPS number.

To track your spending, you will have to log the name of the business that provided the service, the expenditure that was incurred and how much of that related to non-qualifying expenditure.

You’ll then be required to upload an image of your receipt.

Where a bill has been split between two or more people, the business will have to provide individual receipts for the share of the services for which they paid.

If the business has not issued individual receipts, “each taxpayer will have to upload a copy of the same receipt to the app”, according to the guide.

If you don’t want to download the app, you can log your expenditure and claim your tax credit through the myAccount portal on the Revenue.ie website.

PAYE taxpayers can also fill out and submit a Form 12 in the same way they would for medical or employment expenses.

According to Revenue, the credit will then be offset against your tax liability “at the end of the year of assessment”.

This means that if you go to a restaurant in 2020, log your expenditure and claim the tax credit, it will be applied this year. If you do it between January and April 2021 — when the scheme concludes — it will be offset against your tax liability next year.

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