Stay and spend scheme: Ins and outs of tax-incentivised dining

The Government finally unveiled details of its stay and spend scheme at the beginning of September. The tax incentive scheme is aimed at increasing turnover in the hospitality sector during the off-season.

The good news is taxpayers will be able to claim up to €125 in tax credits if they spend €625 or more in restaurants, pubs, hotels, B&Bs and other qualifying businesses between October and next April. The bad news is you have to spend a minimum of €25 on each occasion and none of it can be on alcohol.

The scheme will operate by taxpayers submitting receipts to Revenue by taking a photograph of them using a mobile phone and uploading it using the newly updated Revenue Receipts Tracker mobile app. Taxpayers can continue to submit receipts until the cap on expenditure of €625 is reached. Revenue will then provide an income tax credit of up to €125 – 20 per cent of the spend – per taxpayer in an end of year balancing statement. Jointly assessed couples will receive up to €250.

Qualifying businesses

The taxpayer will get the benefit of the credit in the year after the expenditure is incurred – 2021 for spending between October 1st and the end of this year and 2022 for expenditure between January and April 30th next.

People will need to ensure their receipts come from qualifying businesses. These business must have registered with Revenue to participate, be registered for VAT, have a current tax clearance certificate, be accredited by or registered with relevant official bodies such as Fáilte Ireland and the Health Service Executive Environmental Health Service, and display appropriate signage indicating participation in the scheme.

Taxpayers can register for the scheme by downloading the app from the Apple Store or Google Play Store and provide their name and PPS Number. They must also have an income tax or universal social charge liability against which the tax credit can be set.

A bit complicated

This is where things start to get a bit complicated. According to Revenue, receipts much include the name of the business and an itemised breakdown of the services provided. The itemised breakdown should enable the qualifying and non-qualifying expenditure to be clearly identified – so no hiding a few sneaky drinks in an overall amount. Where a bill is split between two or more customers, each customer should receive an individual receipt. This receipt should show the share of expenditure incurred by each customer.

And uploading the itemised receipts isn’t the end of the matter. If you pay tax through PAYE you make your claim by submitting the income tax return Form 12 for the relevant period in the Revenue MyAccount service. Self-employed individuals will make your claim by submitting the Form 11 for the relevant period in ROS. Both the income tax return and Form 11 for the 2020 period will be available from January 1st, 2021. Receipts should be submitted prior to submitting the return.

So, download the app and register, collect your itemised receipts and upload them, make a claim in your tax return and then wait for your tax credit the following year. It’s well-intentioned but don’t be surprised if it isn’t a roaring success.