Budget 2021 has several implications for employers and in this article, we take you through the key measures for introduction in 2020/2021.
- Covid Restrictions Support Scheme (CRSS) - A new scheme for businesses which closed because of Covid-19 will provide a maximum of €5,000 per week. The Government will make a payment based on 2019 average weekly turnover. The scheme is effective from 13 October until the end of March next year, with the first payments in mid-November.
- EWSS - Employment Wage Subsidy Scheme will continue after 31st March 2021, in some form.
- Commercial rate waiver extended until the end of the year.
- Extension of the Tax warehousing scheme to include repayments of Temporary Wage Subsidy Scheme funds owed by employers and preliminary tax obligations for the adversely affected self-employed. The debt warehousing provisions will be extended for a period of a year with no interest.
- Self-employed recipients of the Pandemic Unemployment Payment will be allowed to take up intermittent work without losing their benefit.
- €3.4 billion Recovery Fund
- €350 million will be spent on Brexit preparations amongst Departments and State Agencies. – including funding for Local Enterprise Offices and customs and tariff training.
- Carbon tax will be increased by €7.50 from €26 to €33.50 per tonne of CO2. Legislation will be provided to increase the tax each year by €7.50 up to 2029 and by €6.50 in 2030 to achieve €100 per tonne.
- Earned Income Credit equalised with the PAYE credit by raising it by €150 to €1,650.
- 13.5% VAT rate reduced to 9%.
- Capital Gains Tax Entrepreneur Relief, The Finance Bill will amend the ordinary share holding requirement so that an individual who has owned at least 5% of the shares for a continuous period of any three years qualifies for this relief. Previously, a person had to own at least 5% for a continuous period of 3 years in the 5 years immediately prior to the disposal.
- Plans to leverage European capital and establish an equity fund with a mandate to invest in domestic, high innovation enterprises announced.
- A Cabinet sub-committee, chaired by the Tanáiste, has been established to deliver the insurance reforms outlined in the Programme for Government.
- Planned assessment of how the Employment and Investment Incentive Scheme (EISS) can be enhanced considering the impact of the current crisis announced.
- National Economic Plan is to be published next month. This will be underpinned by a social progress indicator which considers a broader range of indicators than just economic output.
- An independent Commission on Taxation and Social Welfare to plan out the medium and long-term tax and spending planning announced. SFA believes the future of statutory sick leave, auto-enrolment pension and Capital Gains Tax will be discussed at these commissions.
View here to see the SFA's response to Budget 2021. Additional information can be found at Budget 2021.
If you have any questions on Budget 2021 please contact Elizabeth Bowen, SFA Senior Executive.