What’s in Budget 2021 for Businesses?
Minister for Finance Paschal Donohoe unveiled Budget 2021 yesterday afternoon.
The main points from the Budget for Businesses are as follows:
- Covid-19 support: a new financial support scheme will be introduced for businesses affected by Level 3 or higher restrictions. The Government will make Covid-19 payments to qualifying businesses based on weekly turnover (up to maximum of €5,000 per week), representing an advance credit on deductible trading expenses. It applies up to March 2021.
- VAT: for a limited period (ending on 31st December 2020) the VAT rate for the hospitality and tourism sector will decrease from 13.5% to 9%.
- Self-employed: Income Tax Credit for the self-employed will increase from €1,500 to €1,650
- Commercial Rates: the waiving of commercial rates is extended until the end of 2020 to support businesses impacted by Covid-19.
- Corporation Tax: confirmation that there is no change to the corporation tax rate of 12.5%.
- Preliminary Tax: the tax debt warehousing scheme for qualifying SMEs affected by Covid-19 is expanded to include self-assessment income tax returns for 2019 and preliminary tax due for 2020. If income for 2021 remains at least 25% below that for 2019, then the balance due for the 2020 tax liability and 2021 preliminary tax due can also be warehoused.
The deferred payment is subject to 0% interest for 12 months. After 12-months, a reduced interest rate of 3% per annum will apply and no surcharge will apply.
*Please note that this Budget summary is merely a guide and should not be used as a substitute for professional advice taking into account your individual circumstances.
