The TBESS was introduced to support businesses with increases in their electricity or natural gas (energy) costs.
Overview of the TBESS (Per Revenue Guidelines):
TBESS is targeted at businesses carrying on a trade or profession, the profits from which are chargeable to tax under Case I or Case II of Schedule D, that have experienced a significant increase in their electricity and natural gas costs.
The key features of the scheme are:
The scheme will operate in respect of electricity and natural gas costs relating to the period 1 September 2022 to 28 February 2023. Claims may be made in respect of each calendar month (referred to as a ‘claim period’) within this period. The first claim period for which a claim can be made is September 2022 and businesses will be able to make claims through the Revenue Online Service (ROS) from early December 2022.
The scheme operates by reference to bills or statements for the metered supply of electricity and natural gas through electricity accounts or gas connections identified by its own Meter Point Reference Number (MPRN) or Gas Point Reference Number (GPRN).
To be eligible to make a claim under the TBESS in respect of an electricity bill or a natural gas bill, a business must be able to demonstrate that the average unit price for electricity or natural gas on the relevant bill has increased by 50% or more as compared to the average unit price of electricity or natural gas in a reference period. In broad terms, this is the average unit price in the month that is 12 months prior to the claim period to which the relevant bill relates. This 50% increase is known as the ‘energy costs threshold’.
Once the eligible business has passed the energy costs threshold in relation to a particular electricity or natural gas bill, and satisfies a number of other conditions, it is a ‘qualifying business’. A qualifying business is entitled to claim a Temporary Business Energy Payment (TBEP) amounting to 40% of its eligible cost (subject to a cap for each monthly claim period). A claim for a TBEP must be made within 4 months of the end of the claim period to which a particular electricity or natural gas bill relates.
The eligible cost amount in relation to an electricity or natural gas bill is calculated as the increase between the bill amount on that electricity or natural gas bill as compared to a bill amount in the applicable reference period.
For these purposes, electricity costs relating to an electricity account (MPRN) and/or gas costs relating to a gas connection (GPRN) in respect of each monthly claim period falling within 1 September 2022 and 28 February 2023 must be compared with the electricity or natural gas bill costs, for period that is 12 months prior to the claim period concerned.
Where an electricity or natural gas bill covers only part of a claim period then it will be compared with a proportionate amount of the electricity or natural gas costs for the reference period in determining the eligible cost amount.
Provision is made for businesses to assess their eligibility and, where appropriate, to make a claim in respect of an electricity or natural gas bill for a particular electricity account or gas connection for which the business does not have a bill for the reference period. This will be relevant where -
the business commenced after the end of the relevant reference period, or
the business had commenced before or during the reference period, and the relevant electricity account or gas connection was not held by the business during the reference period. This might arise because the relevant business has expanded its operations by setting up in an additional location with a new electricity account or gas connection or where it has acquired a premises with an existing electricity account or gas connection. It might also arise because the business has moved premises since the relevant reference period.
The TBEP is subject to a monthly cap, which applies on a per trade basis or a per profession basis. In general, the support available in respect of electricity and natural gas costs is subject to a monthly cap of €10,000 per trade or profession. Where, however, a business carries on its trade or profession from more than one location, as identified by the business having multiple electricity accounts/ MPRNs in different locations, the cap may be increased by €10,000 per electricity account/ MPRN, subject to an overall monthly cap of €30,000 per trade
The energy costs threshold test:
An eligible business wishing to make a claim under the TBESS in respect of an electricity or gas bill, must satisfy the energy costs threshold in relation to that bill for a claim period in order to be eligible to make a claim under the scheme. The energy costs threshold operates as a gateway to support under the TBESS. If the relevant threshold is reached, and provided the business satisfies a number of other conditions, it is regarded as a qualifying business in respect of that claim and will therefore be eligible to apply for a payment under the TBESS in respect of the electricity or gas bill.
The energy costs threshold test is based on an increase of 50% or more in the average unit price of an electricity or gas bill as compared to the average unit price in a reference period. The ‘reference period’ is a calendar month that is 12 months prior to the claim period (calendar month) to which the relevant bill (in respect of which the eligible business wishes to make a claim) relates. For example, a claim in respect of an electricity or gas bill with a billing period covering September 2022 will be compared to the September 2021 reference period.
An eligible business will use a ‘deemed reference unit price’ in respect of any reference period where a comparative unit price, pertaining to the same electricity account / MPRN or gas connection/ GPRN, is not available. This will be the case where for example:
the business commenced to trade after the relevant reference period and so there are no energy bills for the reference period;
the business has increased its geographic footprint by expanding into another location or relocated so that it has a new electricity account/ MPRN or gas connection/ GPRN and therefore no bills pertaining to that new MPRN or new GPRN in respect of the reference period.
Deemed reference unit prices will be provided by the Sustainable Energy Authority of Ireland (SEAI) and will be published in these guidelines when available.
Unit price:
A unit price, in respect of an electricity or gas bill, is calculated as the total bill charges, exclusive of VAT, divided by the number of units or electricity or gas, as the case may be, consumed during the period covered by the bill. A unit price must be determined in respect of each electricity or gas bill in respect of which a claim is to be made and a unit price must also be determined in respect of each reference period. If there is a 50% or greater increase in the average unit price determined for an electricity or gas bill when compared to the average unit price of the reference period, then the energy costs threshold will have been met. In order to apply the energy costs threshold, the following unit prices will need to be determined:
The electricity or gas reference unit price, and
The electricity or gas bill unit price In practice, a business will supply details of the electricity or gas bills for the claim period and reference period to Revenue on ROS.
Calculating the electricity or gas bill unit price:
In relation to an electricity or gas bill, being a bill that is received during the period September 2022 to February 2023 and in respect of which a business wishes to make a claim, the unit price for that bill is calculated as being the total amount of charges on the electricity or gas bill exclusive of any VAT charged thereon, divided by the number of units of electricity or gas consumed during the billing period covered by the relevant electricity or gas bill.
Example:
The energy costs threshold calculation:
In relation to an electricity or gas bill, an eligible business is regarded as having met the energy costs threshold for the claim period, where the percentage amount determined by the formula –
(A – B) B x 100
where –
“A” is the electricity or gas bill unit price, and
“B” is the electricity or gas reference unit price, is greater than or equal to 50 per cent.
The above information is only an overview of the Temporary Business Energy Support Scheme (TBESS). Please also be mindful that if you wish to avail of the above scheme, you must be tax complaint and hold a tax clearance certificate.
Further information on the scheme is contained in the https://www.revenue.ie/en/starting-a-business/documents/tbess-guidelines.pdf