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Eurofound's EU PolicyWatch collates information on the responses of government and social partners to the COVID-19 crisis, the war in Ukraine, rising inflation, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.

Factsheet for measure IE-2020-40/1414 – measures in Ireland

New tax credit introduced to encourage spending in hospitality sector

Country Ireland , applies nationwide
Time period Temporary, 01 October 2020 – 30 April 2021
Context COVID-19
Type Legislations or other statutory regulations
Category Promoting the economic, labour market and social recovery
– Support for spending, stimulus packages
Author Roisin Farelly (IRN Publishing) and Eurofound
Measure added 09 November 2020 (updated 25 March 2021)

Background information

The new stay and spend tax credit was introduced as part of the Government's July 2020 jobs stimulus plan. It aims to encourage spending on accommodation and food services in Ireland. These sectors have had a major impact from Covid-19 due to restrictions on opening and reduced footfall and turnover.

Content of measure

The scheme allows people to claim a certain amount of tax back on accommodation, food and non-alcoholic drink bought between 1 October 2020 and 30 April 2021.

The minimum spend is €25 per transaction and a copy of the receipt must be submitted with the claim.

The maximum tax credit available under the scheme is €125 per person or €250 for a couple who are joint assessed.

Taxpayers seeking to avail of the scheme can register by downloading an app - Revenue Receipts Tracker - and providing their name and PPS number. They must also have an income tax or USC liability against which the tax credit can be set. Qualifying people who don’t have a smart phone will also be able to make claim online or by post.

Use of measure

The Revenue estimates that up to 2.7 million taxpayers could qualify for the Stay and Spend tax credit. This represents expenditure of up to €1.7 billion on qualifying holiday accommodation and food and drink between 1 October 2020 and 30 April 2021.

The Irish Independent reported in January 2021 that there has been a low take up of the scheme. According to the paper, figures show that up to January 18, 4,441 claims for tax relief under the scheme were included in 2020 income tax returns, relating to €1.5m of qualifying expenditure that was submitted on Revenue's receipts tracker app. This entitles those who used the scheme to total tax relief of €305,430. Finance Minister Paschal Donohoe said that, up to last Monday, 43,196 receipts had been uploaded to the app recording expenditure of €6.8m - with a potential tax relief of €1.36m if all such expenditure is claimed and qualifies under the scheme.

Target groups

Workers Businesses Citizens
Does not apply to workers Sector specific set of companies
Applies to all citizens

Actors and funding

Actors Funding
National government
National funds

Social partners

Social partners' role in designing the measure and form of involvement:

Trade unions Employers' organisations
Role Informed Informed
Form Not applicable Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

  • No involvement
  • Main level of involvement: Unknown

Involvement

The social partners were consulted prior to the July stimulus plan and Budget 2021.

Views and reactions

Employers have welcomed the scheme and called for additional supports for the sectors.

Sectors and occupations

    • Economic area Sector (NACE level 2)
      I - Accommodation And Food Service Activities I55 Accommodation
      I56 Food and beverage service activities
    • Occupation (ISCO level 2)
      Hospitality, retail and other services managers

Sources

Citation

Eurofound (2020), New tax credit introduced to encourage spending in hospitality sector, measure IE-2020-40/1414 (measures in Ireland), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/IE-2020-40_1414.html

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Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process.