The Temporary Business Energy Support Scheme (TBESS) was announced in Budget 2023 as part of a range of supports to assist businesses affected by rises in energy costs.
The TBESS is one of five new targeted schemes and is aimed at businesses carrying on a trade or profession that have experienced a significant increase in their electricity and natural gas costs.
The new €1.25bn scheme is being administered by Revenue and is designed to be compliant with the European Union State Aid Temporary Crisis Framework.
In this article, we focus on the TBESS introduced to support owners of small and medium-sized enterprises (SMEs) and cover the following:
- What is the Temporary Business Energy Support Scheme?
- Who is eligible for financial support?
- When does the scheme end?
- How does the Temporary Business Energy Payment work?
- What documents are required to make a claim?
- How much can businesses claim as part of the scheme?
- What do the payments mean for tax purposes?
- Final thoughts on the Temporary Business Energy Support Scheme
What is the Temporary Business Energy Support Scheme?
The scheme is open to qualifying businesses that have experienced a significant increase in their electricity and/or gas bills to provide support over the winter months.
Under the scheme, eligible businesses can claim a monthly payment of up to €10,000 to help with energy costs.
The scheme is self-assessed and operated via a dedicated portal on the Revenue Online Service (ROS).
Who is eligible for financial support?
Businesses classified for tax as Case I or Case II (professionals in this category were added a month after TBESS was announced) under schedule D – which includes most businesses carrying on a trade or profession – are eligible for the scheme.
Examples of trades include:
- Retail shops
- Food and drinks suppliers.
Meanwhile, examples of professions include:
Some sporting organisations and charities might be eligible under the scheme.
Eligible businesses must have complied with their tax obligations, including completing registration, filing and paying deadlines and must be eligible for a tax clearance certificate throughout the claim period.
Businesses that have debt warehousing arrangements in place are deemed to be eligible. Businesses must continue to be entitled to tax clearance during the claim period.
You can check your tax status via ROS.
To qualify, businesses must also have experienced a 50% or more increase in their natural gas and/or electricity costs in the relevant claim period when compared to the ‘reference’ period in 2021.
When does the scheme end?
The TBESS will be backdated to 1 September 2022 and runs until 28 February 2023.
Businesses can register for the scheme and submit claims via a portal on ROS.
Each claim period will be equal to one calendar month, and claims can be made up to four months after the end of the claim period.
So, for example, costs for September 2022 can be claimed up to 31 January 2023, and each subsequent claim month will have a corresponding time limit of four months.
How does the Temporary Business Energy Payment work?
The TBESS scheme is run on a self-assessment basis and applies to costs of electricity and metered natural gas incurred by an eligible business.
Eligibility is based on the average unit price for the billing period in 2022 compared with the equivalent bill period in 2021 – known as a ‘reference period’.
If the increase is 50% or more, the business is eligible for support under the scheme.
The owner or representative of a qualifying business must register for the scheme on the dedicated portal on ROS, provide the required information, and make a declaration that they meet the criteria.
The amount to be included in the unit price is the electricity usage, plus standing charges and other charges such as the PSO (Public Service Obligation) levy.
The PSO levy was reduced to nil on 1 October 2022, so this charge should only be included in calculations for September.
The amount excludes VAT and any discounts given by the supplier. Prepayments or arrears balances are not included in the calculation.
There’s no need to carry out calculations as the Revenue system will carry out all the calculations based on the details you input from the relevant electricity and/or gas bills – relating to both reference and claim periods.
The system will generate the reference unit prices and claim unit prices based on the information you have supplied.
Further details on the scheme and how the Temporary Business Energy Payment is calculated are provided in the document: Guidelines on the operation of the Temporary Business Energy Support Scheme (TBESS).
You might find your business is ineligible for one claim period due to the increase in energy bills being less than 50%.
However, you could still be eligible under the criteria in a different claim period.
What documents are required to make a claim?
A portal on ROS is open for registration and claims now. The scheme operates on a self-assessment basis; you’re not required to submit any documents when making a claim.
However, when you or your accounts person is signing up for the scheme and/or submitting a claim, it’s worth having the following documents to hand as you’ll be required to input some of the details into the system:
- A current tax clearance certificate
- Energy bills for the reference period
- Energy bills for the claim period.
If you don’t have an energy bill for the reference period because your business is new, has expanded into another location or relocated and has a new electricity or gas account, you can use a ‘deemed reference unit price’ instead of the reference unit price.
A list of deemed monthly reference unit prices for electricity and natural gas has been provided by the Sustainable Energy Authority of Ireland and published in the latest version of the TBESS guidelines.
You should retain all documents related to your claim including details of the business activity, tax clearance and energy bills – for the reference period and claim period – as Revenue may request these at a future date.
The names and addresses of the businesses that use the TBESS will be published by Revenue, which includes total amounts that have been claimed.
How much can businesses claim as part of the scheme?
The amount of support available will be 40% of the increase in the electricity and/or gas bill amount, subject to a monthly cap of €10,000.
If someone has more than one profession or trade, there’s a monthly limit of €10,000 that will apply to each qualifying business.
However, this limit can be increased if the qualifying business is operating across a number of locations and has more than one electricity account.
It’s possible for the limit to rise by €10,000 for each electricity account – this is subject to an overall monthly limit of €30,000 for each qualifying business.
A unique meter point reference number (MPRN) identifier is required for each electricity account – and the MPRNs need separate electricity supply addresses.
More information on how to assess whether a business is eligible for multiple payments – with examples – is provided in the scheme guidelines referred to above.
What do the payments mean for tax purposes?
Businesses that receive any payments under the scheme must include the amounts when preparing their accounts.
Any payments you receive under the TBESS will reduce the amount of eligible expenditure – which includes fixed costs such as rent, insurance, energy and wages – that can be deducted from your income and will affect the tax due from your trading profits.
So you may incur an additional tax liability when filing and paying your taxes for 2022 when the tax return is due in October 2023 (or November 2023 if you pay and file using ROS).
Final thoughts on the Temporary Business Energy Support Scheme
The TBESS is aimed at providing financial support as energy bills increase, particularly during the winter months.
Revenue has provided a dedicated portal where you can easily register for the scheme and submit claims.
The system will carry out the required calculations so as a business owner, once you’ve registered for the scheme, submitting a claim is straightforward.
All you need to do is input the details from your bills and the system will do the heavy lifting for you.
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