Temporary Business Energy Support Scheme (TBESS) 16 December 2022

RMcH states:I have been getting some queries from client in relation Temporary Business Energy Support Scheme (TBESS)

Overview

The TBESS was introduced to support businesses with increases in their electricity or natural gas (energy) costs.

Your business can make a claim under the scheme if it:

    is tax compliant

    carries on a Case I trade or Case II profession. This includes charities and approved sporting bodies that carry on certain activities

    and

    has experienced a significant increase of 50% or more in its electricity and/or natural gas average unit price.

Qualifying businesses can claim for 40% of the increases in their energy bills. The increase in energy bills must be between the ‘claim period’ and the ‘reference period’.

A claim period is a calendar month from September 2022 to February 2023. A reference period is the corresponding calendar month in the previous year. For example, September 2021 is the reference period for the September 2022 claim period.

Further information on the scheme is contained in the TBESS guidelines.

Claim amount

If your business is a qualifying business, it can make a claim for a Temporary Business Energy Payment (TBEP). The TBEP is equal to 40% of a business’ eligible costs. This is subject to a monthly cap.

State Aid

The scheme is designed to be compliant with the European Union State Aid Temporary Crisis Framework (TCF). The TCF sets out overall limits on the financial support that may be claimed by single undertakings. 

Publication

Revenue will publish a list of the names and addresses of all businesses who avail of the TBESS. The list will include the total amounts they have claimed.

As a requirement under the TCF, Revenue will publish additional details in relation to persons who are members of a single undertaking where claims under the TBESS exceed:

    €100,000 for any claim period

    or

    €10,000 per claim period where the single undertaking is engaged in farming or fishery and aquaculture.

Qualifying criteria for eligible businesses

Each of the following is considered an eligible business under the TBESS:

• a business that carries on a trade or profession, which is taxable under Case I or Case II of Schedule D
• certain approved sporting bodies that carry on a trade or profession that would be taxable under Case I or II, but for an exemption

• and

• certain charities that carry on trading activities that would be taxable under Case I, but for an exemption.

This includes companies, sole-traders, self-employed individuals and partnerships.

Pay As You Go customers

If your business pays for electricity or gas on a Pay As You Go basis, it can avail of the TBESS. This is provided it meets the qualifying criteria. You must supply details from your energy statement to Revenue as part of a claim.

Qualifying criteria

For your eligible business to qualify for the TBESS, it must:

• pass the ‘energy costs threshold’ (see below)
• be tax compliant with regards to tax registration, tax payments and filing of tax returns
• be eligible for a tax clearance certificate throughout the claim period
• be an eligible business throughout the claim period and intend to be an eligible business following the end of the claim period

• and

• complete the TBESS registration and claim process, including completion of all required declarations.

These conditions must be met for each period for which your business is making a claim.

Energy costs threshold

An eligible business must satisfy the energy costs threshold in respect of each electricity or natural gas bill per claim.

The average unit price for electricity or natural gas must be calculated for each energy bill arising in a claim period. The average unit price is also calculated for the corresponding reference period in the previous year.

A comparison is then made between the average unit price for the electricity or natural gas costs of the:

• bill in the claim period

• and

• corresponding reference period in the previous year.

To satisfy the energy costs threshold the average unit price must have increased by 50% or more per relevant bill.

Further information on the energy costs threshold is available in the TBESS guidelines.

TBESS Calculator

The average unit price is the total costs of the bill, excluding VAT, divided by the units of consumption.

You can use Revenue’s online calculator to determine if your business has satisfied the energy costs threshold. This calculation is used for each particular electricity or natural gas bill. You will need to provide Revenue with the relevant bill details from:

• the claim period bill

• and

• the corresponding reference period bill.

Understanding your bill

For information on how to find the relevant bill details please see Revenue's guidance Understanding your bill. 

Costs that can be included in a claim

A claim may be made in respect of electricity or natural gas costs only.

Eligible costs

A qualifying business can make a claim to Revenue for a Temporary Business Energy Payment (TBEP). This payment is equal to 40% of the business’s eligible costs.

The eligible costs in relation to an electricity or natural gas bill is calculated as the increase in:

• the bill amount in a claim period

• compared with

• the bill amount for the corresponding reference period.

The following items should not be included in the eligible costs:

• Value Added Tax (VAT)
• any arrears or prepayments (the charges must relate to the particular billing period).

Eligible energy use

The eligible costs must be incurred wholly and exclusively for the purposes of the trade or profession. This means that the eligible costs must be directly related to the running of that business. Any non-business use must be excluded from the eligible costs for the claim.

Where you operate a business from your own home, you should exclude your private energy use when making a claim. You should be familiar with apportioning costs between the business and your private use. This must be done when you are calculating the profits of the business and filing tax returns.

• Example 1

Mary is a dairy farmer in Monaghan, who lives in a cottage on the land used for farming. She has one electricity account, Meter Point Reference Number (MPRN) for the cottage and nearby agricultural buildings.

The profits from the farming business are chargeable to tax under Case I of Schedule D.

Mary determines that 40% of her electricity costs relate to her domestic use with the balance relating to the farming business.

Mary can claim for the proportion of her electricity costs that were incurred wholly and exclusively for the farming business. The portion of her electricity costs that relate to domestic use cannot be included in the claim.

New energy customers

Your business may not have an energy bill for a particular monthly reference period. This may happen for example if:

• the electricity account or gas connection did not exist at the time
• the business acquired a new electricity account or gas connection
• the business moved premises

• or

• the business commenced after the end of the relevant reference period.

In such cases, a ‘deemed reference unit price’ in respect of electricity or natural gas should be used. This is used in determining both the energy costs threshold and the eligible costs of the business.

The deemed reference unit price has been supplied to Revenue by the Sustainable Energy Authority of Ireland. Details are available in the TBESS guidelines.

Making a claim

There is a two-step process to make a claim under the Temporary Business Energy Support Scheme (TBESS). The eligible business needs to:

• register for the TBESS on the Revenue Online Service (ROS)

• and

• complete a claim in respect of energy costs arising in a claim period or claim periods.

A step-by-step guide on how to register and make a claim on Revenue Online Service (ROS) is in the TBESS guidelines.

Registration

When registering for the scheme you will need to:

• provide details about the business
• provide details in relation to electricity or natural gas connections
• make declarations confirming eligibility for the scheme.

You can register on ROS from 26 November 2022.

Making a claim

You can make a claim on ROS from 5 December 2022.

Energy costs for a claim period relate to each calendar month from 1 September 2022 to 28 February 2023.

Energy costs for a reference period relate to each calendar month from 1 September 2021 to 28 February 2022.

You must supply details of energy bills for both the claim period and the reference period. 

For information on how to find the relevant bill details please see Revenue's guidance Understanding your bill.

Revenue’s TBESS calculator will:

• apportion the bills, where the billing period relates to more than one calendar month   
• calculate the energy costs threshold
• calculate the eligible costs

• and

• determine the amount of TBEP that you can claim.

If your business has more than one energy bill in a claim period, you can make a claim in respect of each bill. You will need to meet the qualifying criteria for each claim period. This is subject to a limit of €10,000 per month or up to €30,000 in certain circumstances.

Time limit for claims

Claims for an electricity or natural gas bill must be made within 4 months of the end of the claim period. 

Compliance checks

The billing details you provide should correspond with your business’ books and records. Revenue may validate this information against details already held on Revenue systems including relevant tax returns.

You may be required to submit supporting documentation when making your claim. Revenue may request additional documentation to verify the claim at a later date.

Record keeping

You must keep records relating to your claim for a period of 10 years following the end of a claim period. This is a requirement under the Temporary Crisis Framework (TCF).

Offset

A TBEP will be offset against any outstanding tax due in line with normal Revenue offset rules.

The offsetting rules will not apply to tax liabilities that have been warehoused under the Debt Warehousing Scheme. This is provided the business satisfies the conditions of Debt Warehousing by filing returns and making payments on time.

The offsetting rules will not apply to tax liabilities that a business is paying under a Phased Payment Arrangement (PPA). This is provided it is meeting its obligations under that PPA.

For more information please see  https://www.revenue.ie/en/starting-a-business/tbess/single-undertaking.aspx