Budget 2023: This is how the new energy subsidy for companies works

The government has announced a major energy support program for businesses to help stem their skyrocketing energy bills.

But what is it, how will it work, who qualifies, how much can companies get, and how quickly will they get it?

What is the scheme?

The Temporary Business Energy Support Scheme or TBESS is a €1.25 billion program to provide financial support to businesses affected by rising energy costs. It will be managed by the Revenue Commissioners who will draw on their experience managing various Covid support programs since 2020.

Who can apply?

Any company in the country can apply as long as it can show that the unit cost on its electricity or gas bills has increased by 50 percent or more this year compared to the same period last year.

“So if the unit cost of electricity or gas has increased by 50 percent or more over the past year, you qualify,” Tánaiste and Enterprise Minister Leo Varadkar told a news conference on Tuesday.

“It’s pretty much every company, there’s a small number of companies that have long-term contracts with very low energy prices, but that’s not common.”

Mr Varadkar said that “potentially the majority of businesses in Ireland” will apply for the scheme.

How much support can they get?

The program pays 40 percent of the increased cost of bills up to a limit of €10,000 per building per month.

How soon will the system be up and running?

The government intends to issue the first payments to businesses in November and they will be backdated to September.

However, this is subject to legislation being brought through the Dáil and Seanad in October and the systems of revenue administration being put into operation.

Another potential fly in the ointment is that the program requires European Union approval, as state aid rules place a cap on the amount of support a government can give to an individual company.

Mr Varadkar said TBESS is “almost” allowed but acknowledged it has yet to be approved by Brussels.

If that seems like an ambitious timeline, Mr Varadkar said the first wage subsidy scheme to fund the pandemic was implemented in a similar timeframe.

Ministers Damien English and Dara Calleary, sitting next to him on Tuesday, pointed out that the benefit of the program is that its mere existence would help companies manage their cash flows in anticipation of government support.

How long does the program run?

It will run until “at least” February 2023, but the inclusion of the word “temporary” in its name is revealing given that it was referred to as just the Business Energy Support Scheme in government circles over the weekend.

However, Mr Varadkar seemed more than willing to extend it, pointing out that the future cannot be predicted.

“If energy prices don’t fall and we can still afford to support the economy at that level, then I think it would be extended in that scenario,” he said. “If we have to extend them, we will, provided we can afford it.

Could it be abused by profitable businesses that don’t need it?

The simple answer is yes, but Revenue will monitor any business that makes use of it. Varadkar said the scheme was not designed to prevent companies from making a profit, but to allow companies to continue making profits, continue operating and “not have to close several days a week or lay off employees”.

How much will it cost the taxpayer?

A total of €1.25 billion will be allocated to the scheme, but this is an estimate based on how many companies will apply and an assumption that it will run until February. “It could cost a lot more,” Mr Varadkar admitted.

https://www.independent.ie/business/budget/budget-2023-heres-how-the-new-energy-support-scheme-for-businesses-will-work-42022104.html Budget 2023: This is how the new energy subsidy for companies works

Fry Electronics Team

Fry Electronics.com is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – admin@fry-electronics.com. The content will be deleted within 24 hours.

Related Articles

Back to top button