Stay and Spend Incentive

Back in July, as part of a Stimulus Plan , the government announced the “Stay and Spend” Incentive Scheme.

The stay and spend incentive is an income tax credit that can be claimed on expenditure on accommodation, food and non-alcoholic drinks. It applies to spending between 1st October 2020 and 30th April 2021.

Taxpayers can claim a tax credit of 20% of their spending up to a maximum per taxpayer of €125. This is a total maximum – NOT a maximum per year.

The stay and spend tax credit is capped at just €125 per person.(€250 for jointly assessed couples). To get the maximum tax credit you would need to spend €625 (€1250 for a couple) .

  • The minimum spend per transaction is €25. This means that lots of small orders of cake and coffee over 6 months won’t be eligible!
    • A €100 spend will qualify for a €20 tax credit.
    • A €300 spend will qualify for a €60 tax credit
    • A €625 spend (or greater) will qualify for the maximum €125 tax credit.

A couple could claim a €250 tax credit on a spend of €1250. But if they are assessed separately for tax they will need to split the payments and submit separate claims and receipts

A Tax Credit of €125 will reduce the income tax you pay in a year by €125 .
The stay and spend tax credit can be offset against a claimant’s USC liability if it can’t be fully used against income tax.

The period during which qualifying expenditure may be incurred runs from 1st October 2020 to 30th April 2021. The maximum €125 tax credit is over the tax years 2020 and 2021 – it is not €125 per tax year.

Any expenditure up to Dec 31st 2020 can be claimed on 2020 tax returns. Expenditure from Jan 1st 2021 to April 30th 2021 will need to be claimed on 2021 tax returns.

Is it Just Spending in Hotels that is Eligible ?

Two types of services qualify for relief under this section.

  1. The provision of holiday accommodation that is registered with Fáilte Ireland – including
    1. accommodation in hotels, guest houses, B&Bs
    2. self-catering accommodation,
    3. caravan and camping parks, and holiday camps.
  2. Sale of Food and drinks (excluding alcohol) served in a café, restaurant, hotel or pub may also qualify for relief. (Not takeaway)
    • But if non-alcoholic drinks are provided without any food, the cost will not be qualifying expenditure.

How to Claim

For a claim to be eligible – the service provider will need to be VAT registered and will also have to be approved by Revenue as an “eligible service provider”.
Full details of how to register as a service provider can be found here
Consumers can check the list of registered providers HERE

Claims for the spend and stay tax credit must be supported with proof of the qualifying expenditure incurred. Revenue suggests that the best way to submit proof of expenditure is to photograph the receipt and submit it through the Revenue Receipts Tracker App.

PAYE Workers

If you pay tax through PAYE you will need to claim this credit by submitting an income tax return (Form 12) for the 2020 period. The earliest this can be done is Jan 1st 2021.
This is the same in respect of claims for medical expenses, employment expenses, etc. Taxpayers can file and submit their Form 12 online via Revenue’s “myAccount”

Once Form 12 is completed, Revenue will review any refund due. It should get paid within a few weeks of the receipt of the tax return.

Self Employed

If you are self-employed you will need to make a “stay and spend” claim on your Form 11 tax return for the 2020 period. (or 2021 if applicable). Your total tax payable will be reduced by the amount of the Stay & Spend Tax Credit.

Any expenditure up to Dec 31st 2020 can be claimed on 2020 tax return. Expenditure from Jan 1st 2021 will need to be claimed on 2021 tax returns.
The maximum tax credit of €125 is over 2 years.

Full Revenue Details Here

We can see that many people will possibly be put off by all the form filling and retention of receipts. All for the sake of a maximum of €125 refund on a spend of €625

UK – Eat Out to Help Out Scheme

A scheme to encourage hospitality spending in the UK involved up to £10 per person off meals and non alcoholic drinks. It was available on Mondays Tuesdays and Wednesdays in August 2020.
This was a much simpler scheme and had a much quicker payback time for the consumer. It also benefited non-taxpayers.

A family of 4 in the UK could easily benefit by £160 in August by eating out once a week and ordering food and drink worth £80 each time. (Total spend of £320)
The Irish Spend and Stay incentive will refund just €80 tax on a spend of €320.

More July Stimulus Incentives

The July Stimulus package also included a reduction in the standard rate of VAT .

VAT on the hospitality sector is charged at 13.5% – so the VAT rate reduction will not help them.
However, the potential saving of up to 20% may be a bigger incentive for consumers and will hopefully increase demand for domestic tourism in the winter and spring months.

A temporary increase to the levels of support in the Help to Buy incentive was also included in the July Stimulus package.

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Budget 2021