Business could receive first energy support payments next month

Businesses could receive the first payments from the Government’s €1.25 billion energy support scheme next month, according to Minister for Finance Paschal Donohoe.

The Minister announced the scheme to aid enterprises hit by soaring energy bills in September as part of Budget 2023.

Mr Donohoe said on Wednesday that the Government hoped organisations could begin applying for the support in mid-November with “payments flowing to recipients shortly after that”.

Firms must be tax compliant and apply within four months of the end of the relevant period to qualify under the Temporary Business Energy Support Scheme, as the programme is called.

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It will cover the months from September 1st to February 28th 2023, while the Minister can extend it to April 30th.

Announcing details of this year’s Finance Bill, he confirmed that Government would extend the scheme to pre-schools and professions including accountants and solicitors.

Mr Donohoe said the Coalition also intends to introduce a mechanism that will allow newly founded enterprises to apply for the aid.

The Government must get EU state aid approval, under the union’s temporary crisis framework, before opening the scheme to applications.

“We have engaged with the [European] Commission on the draft elements of the plan,” Mr Donohoe said.

He added that he did not want to prejudge that process but pointed out the scheme was modelled closely on the framework and on comparable programmes that other member states already operate.

Data centres — widely blamed for the Republic’s electricity shortage — can apply for cash under the scheme along with all other qualifying businesses.

However, Mr Donohoe argued that a monthly cap on payments, ranging from €10,000 to €30,000 for those operating from multiple locations, would deter these facilities from seeking aid.

“This scheme would be of limited use to data centres,” said the Minister.

New businesses will also be able to apply for aid under the programme.

The original formula, that it would refund 40 per cent of an organisation’s energy bills where they had increased by 50 per cent or more over last year, ruled out any enterprise founded in 2022.

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Mr Donohoe said that Revenue, which will administer the payments, would calculate new businesses’ entitlements using price information provided by the Sustainable Energy Agency of Ireland.

The Minister does not believe that extending the aid to pre-schools and professionals will add to its cost, as the Government calculated this on the basis of energy used across the entire economy.

Meanwhile, employers’ group Ibec called for Mr Donohoe to delay a provision taxing company car emissions as a benefit in kind, which the organisation says could cost workers €40 to €80 a week.

Actually passed in the 2019 Finance Act, the tax applies from January 1st. Ger Brady, Ibec’s chief economist, said it would hit workers such as sales staff, who need company cars.

“The easy solution is to delay it, or only apply it where people are moving to new leases,” said Mr Brady.

He argued that this approach would meet the tax’s aim, which was to encourage companies to switch to more efficient vehicles.

In a new provision, workers will not have to pay benefit-in-kind tax up to €3,000 where their employer pays for cargo bikes, including the electric models, under the cycle-to-work scheme.

The bill confirms that the €500 tax credit given to parents paying rent for student children aged under 23 does not apply if the property is not registered with the Residential Tenancies Board.

This could rule out large numbers of students, including those living in digs or shared accommodation, observers say.

The Finance Bill gives effect to most measures announced in Budget 2023.