The ‘Stay and Spend’ scheme was announced in July 2020 as part of the government’s multi-billion-euro stimulus plan. Kicking off from 1st October, the “Stay and Spend” scheme allows you to claim an additional tax credit of up to €125, by giving you 20% back on certain accommodation, food and drink costs. Revenue have estimated that up to 2.7 million taxpayers could qualify for the Stay and Spend tax credit.
To ensure you don’t miss out on this tax credit, here’s a summary of the main details:
What is the Stay and Spend Scheme?
Under the ‘Stay and Spend’ scheme you can obtain 20% back on “holiday accommodation” costs and “eat in” food and non-alcoholic drinks from qualifying service providers. You don’t need to be on holiday to avail of the scheme – expenditure in your local area can be claimed so long as it meets all the criteria outlined below.
When does it start?
The Stay and Spend scheme commenced on the 1st October 2020 and runs until the 30th April 2021.
What expenditure qualifies for 20% back?
Qualifying expenditure includes money spent on
- “Holiday” accommodation;
- Food and non-alcoholic drinks;
which have been provided by a “qualifying service provider”.
The cost of take-away food and drinks do not qualify.
Importantly, please be aware that you must spend a minimum of €25 in each transaction. Any expenditure lower than €25 in a single transaction cannot be included in a Stay and Spend tax credit claim, even if it meets all other criteria.
Who are the qualifying service providers?
A full list of qualifying service providers can be found on Revenue’s website at: https://www.ros.ie/stay-spend-web/rev/sas
Are there minimum or maximum limits on the tax credit?
The Stay and Spend tax credit is capped at €125 per person (therefore €250 for jointly assessed couples). As the scheme works by giving you 20% back, you would need to have spent a total of €625 to obtain the maximum tax credit of €125.
If you spend less than €625 you will get 20% back on whatever is the lower value. For example:
- A €100 spend will qualify for a €20 tax credit
- A €300 spend will qualify for a €60 tax credit
Any expenditure above the €625 maximum is not eligible for further tax credits.
Can I claim the Stay and Spend Tax Credit for 2020 and 2021?
The Stay and Spend Tax Credit is a one-off tax credit. The maximum total €125 tax credit is available over both the 2020 and 2021 tax years. It is not €125 per tax year.
How do I claim this tax credit?
Umbrella Company Directors
If you are an Umbrella Company Director, you can simply include the Stay and Spend Tax Credit in your Income Returns for 2020 and/or 2021, as applicable.
PAYE Umbrella Contractor
If you use a PAYE Umbrella Contractor (i.e. you are not a Director) you can apply for the Stay and Spend Tax Credit by submitting a Form 12 via your Revenue online account “myAccount”. The earliest that this can be done is 1st January 2021 for expenditure incurred between 1st Oct 2020 and 31st Dec 2020. Once a Form 12 is completed, Revenue will review any refund due and make payment to your bank account. Or if you are required to submit an Income Tax Return due to other income sources that you have, you would instead include your Stay and Spend Tax Credit on your income tax return in a similar manner to Umbrella Company Directors. Don’t forget to update your Revenue “myAccount” with your bank details if you haven’t already done so.
Do I need to keep or submit receipts?
All claims for the Stay and Spend Tax Credit must be supported with proof of qualifying expenditure incurred. This means keeping and submitting your receipts. Be aware that receipts must show the name of the business and an itemised breakdown of what was purchased.
Revenue recommends the best way to submit proof of expenditure is to take a picture of the receipt and submit it through Revenue’s new Receipts Tracker App as you go along. Any receipts submitted using this app will be automatically pulled into your Form 11 or Form 12 at a later stage when making your claim, so it is the handiest way to keep track of them and ensure no receipts are lost or overlooked.
Expert Advice from Fenero – We’re Here to Help
We are on hand to help and advise as always. If you have any queries on the above – or anything else contracting or tax related – please do not hesitate to get in touch with the team on hello@fenero.ie or 01-6877400.
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