Laois Chamber Alliance welcomes supports benefitting businesses as part of Government’s €1.2 billion Cost-Of-Living Support Package

Cabinet has today (Tuesday 21st February) signed off on a €1.2 billion cost-of-living support package, with many of the measures included benefiting businesses.

Included in today’s measures, the temporary reduction in VAT on Tourism and Hospitality from 13.5% to 9% will be extended to 31 August 2023. The Temporary Business Energy Support Scheme (TBESS) will also be extended to 31 May 2023. The scheme will also be enhanced by reducing the threshold for qualification from a 50% increase in electricity or gas costs, to a 30% increase. This will apply retrospectively from 1 September 2022.

From 1 March, the level of relief will be increased from 40% to 50% of eligible costs, subject to a monthly limit. This will also be increased from March to €15,000 per month per trade or profession, subject to an overall cap of €45,000 where the business is carried on from more than one location. These changes are subject to state aid approval from the European Commission. The cost of this extended scheme will be met from the allocation provided in Budget 2023.

Speaking about the announcement, Laois Chamber Alliance CEO Caroline Hofman welcomed the announcement, and said:

“Having lobbied extensively for the extension of business supports, we very much welcome the signing off of this significant package. It is positive to see the extension of the 9% VAT rate for the hospitality sector, and this is positive news for our members in the sector for the time being, although there will be concerns if the lower VAT rate is not extended beyond 31 August.

The extension and change in criteria for the TBESS is significant, as the scheme in its initial form saw a far lower uptake than anticipated and was simply not fit for purpose. I would envisage that the enhanced scheme will allow more businesses to avail of it, particularly at a time when soaring energy costs are one of the biggest challenges faced by businesses.”

A phased restoration of the rates of excise on petrol, diesel and marked gas oil will take place in three stages over the coming eight months. This will see rates restored on 1 June by 6 cent per litre of petrol, 5 cent per litre of diesel and 1 cent per litre of marked gas oil. On 1 September these rates will increase by a further 7 cent for petrol, 5 cent diesel, 1 cent for marked gas.

Rates will then be fully restored on 31 October with a final increase of 8 cent for petrol, 6 cent for diesel, and 3 cent for market gas oil.

Caroline Hofman added:

“The restoration of the rates of excise on diesel and petrol on a phased basis will have a negative impact for our members and the wider community. Transport costs have increased considerably, and this will continue having a knock-on effect on products and services as businesses can only absorb a certain level of costs before having to pass these on to customers. It is something we are all feeling in our pockets.”

The temporary reductions in VAT on gas and electricity, from 13.5% to 9%, will be extended to 31 October 2023. There will also be a new grant for businesses using LPG or kerosene.

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