Q&A: How does the Stay and Spend scheme work?

Consumers will be able to claim back 25% of tax paid on meals and accommodation up to a certain limit

While you may already be familiar with taking pictures of your food in restaurants, you will now have to get used to taking some of your receipts to claim back tax under the Government’s Stay and Spend Scheme. Photograph: iStock.

While you may already be familiar with taking pictures of your food in restaurants, you will now have to get used to taking some of your receipts to claim back tax under the Government’s Stay and Spend Scheme. Photograph: iStock.

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Is the Government going to pay people to go on holidays?

No, it is not. However, it is offering to give people a tax credit of more than €100 if they spend money in restaurants, hotels and cafes in the months ahead as long as certain criteria are met. It is called it the Stay and Spend Scheme.

Stay and spend? What does that mean?

Well, the Government wants to encourage people to stay at home and spend money across the hospitality sector in the autumn, winter and spring, and it is promising to return 20 per cent of what people spend in restaurants, pubs, hotels and other businesses between October and April.

Are pubs included?

No, only food and non-alcoholic drinks are to be covered by the scheme.

Is there a limit on how much I can claim back?

The amount a person will get back in the form of income tax credits has been capped at €125, meaning that the scheme stops having a benefit to the consumer once €625 has been spend. You will also have to spend at least €25 for a transaction to be counted towards the total.

Will that tax relief double for a couple?

It will. A qualifying couple who pay tax will be able to get tax credits worth €250 as long as they spend €1,250.

When does the scheme start?

It will come into effect on October 1st, but accommodation and food businesses can register now with Revenue to insure they are included.

Why do they need to register?

For a business to qualify for the scheme, the tax man will have to know they are part of it. They will have to be registered for Vat, have a current tax clearance certificate and be registered with Fáilte Ireland or another relevant tourism body as well as the HSE Environmental Health Service. They will also have to display a sign stating that they are taking part in the scheme.

Would it not have made more sense to start this during the summer whenpeople are travelling within Ireland?

It probably would have, at least from a tourist’s perspective. But the scheme is intended to support tourism businesses rather than tourists as they do need help. The thinking was that bookings were okay in July and August as Irish people confined to the island because of travel restrictions had little choice but to spend their holiday money at home The tourism sector will really struggle in the winter months when Irish people are - typically - less inclined to book trips away. That is why the focus is on the months between October and April.

How was the summer for the sector?

It is probably too early to say how August went but according to Central Bank figures for July spending on accommodation and restaurants was strong. The bank’s latest credit and debit card statistics show total card spending, including ATM transactions, was some €5.8 billion in July, up 6 per cent on the previous month, but 5 per cent down on last year.

Within this, the accommodation sub-sector recorded month-on-month growth rates of 160 per cent. As the third phase of restrictions were eased in late June, with the reopening of restaurants and some bars, spending in the social sector increased by 35 per cent in July, compared to the previous month.

How do consumer go about getting their money from the tax man?

Taxpayers seeking to avail of the scheme can register by downloading an app - Revenue Receipts Tracker - and providing their name and PPS number. They must also have an income tax or USC liability against which the tax credit can be set. Qualifying people who don’t have a smart phone will also be able to make claim online or by post.

What happens if I don’t pay income tax?

If you don’t pay income tax because you are on social welfare or a pension or earn less than the income tax threshold then you cannot take advantage of the scheme.

Do I have to be on holidays or can I claim the tax credit by eating out in a local restaurant?

You don’t have to be on holidays and once the restaurant is participating in the scheme and you spend more than €25 it qualifies.

How will Revenue know how much I have spent?

All applications for a tax credit will have to be verified with receipts?

Do I have to keep receipts?

No, as we said, there’s an app for that. While you may already be familiar with taking pictures of your food in restaurants, you will now have to get used to taking some of your receipts. If you want to get the tax credit you download the app and register your name and PPS number. Then when you are out eating or in hotels sleeping make sure to get your receipts and to take a picture of them that shows the amount you have spent and the place where you did so. When you reach you cap of €625 the app will alert show that you are done.

Do I get the money back right away?

You will have to wait a while for that The tax credit will not apply until the tax year after you have spent your money. If you hit the €625 threshold between October and December, you will get the tax credit next year. If you leave spending until next year, then you will not get the tax relief on it until 2022.

Will the scheme work?

It is certainly better than nothing, but whether or not it will be sufficient to pull the many Irish businesses who say they are close to the precipice back is very much open to question.

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