The minister, in his delivery of the budget 2021, mentioned a number of initiatives for business supports in 2021 and the ongoing COVID-19 pandemic.
Employment Wage Subsidy Scheme (EWSS)
The present wage subsidy scheme is to be in operation until 31 March 2021 but the Minister announced on Budget day that a similar type of scheme will be needed until the end of 2021 to provide businesses with certainty. The form that scheme will take will be decided when there is a clearer view of the economic conditions in the country.
Covid-19 Pandemic Unemployment Payment (COVID-PUP)
There was no change to the rates of payment of the COVID-PUP however, self-employed workers will be able to earn up to €480 per month (gross) and retain their COVID-PUP entitlement.
COVID Restrictions Support Scheme (CRSS)
A compensation scheme called the COVID restrictions Support Scheme (CRSS) will provide support for businesses whose trade has been significantly or temporarily closed as a result of public health restrictions. The scheme will be available when Level 3 or higher restrictions are in place. Payments will be based on the business’s 2019 average weekly turnover, subject to a maximum weekly payment of €5,000 and will be administered by Revenue.
Accommodation, food and the arts, recreation and entertainment sectors currently impacted by Level 3 restrictions qualify. Where the Government decide to move to a higher level of restriction, other sectors may qualify.
Payments will be calculated on the basis of 10 percent of the first €1 million in turnover and 5 percent, thereafter, based on average VAT exclusive turnover for 2019. The maximum weekly payment available under the scheme is €5,000.
VAT Rate reduction
The VAT rate will be reduced from 13.5% to 9% for the tourism and hospitality sector. This VAT rate change will apply from 01 November 2020 until the 31 December 2021.
Commercial Rates Waiver
The waiver of commercial rates, currently in place, has been extended to Quarter 4, 020 to support eligible businesses impacted by the COVID-19 pandemic.
Warehousing of Income Tax Liabilities
It was announced that the tax debt warehousing scheme which is currently available to corporate taxpayers will be extended to self-employed individuals. For these self-employed individuals, the scheme will cover the balance of income tax payable for 2019 and the preliminary income tax liability for 2020. Both of these liabilities would normally be payable by 31 October 2020 (or the extended deadline is applicable to those who pay and file VIA ROS which is the 10 December 2020)
Under this scheme, taxpayers will be allowed to defer payment of their income tax liabilities for up to a year without statutory interest applying. Therefore, a 3% rate of interest will apply to outstanding liabilities, but no surcharges should arise.
Earned Income Credit
The Earned Income Tax Credit for the self-employed and Proprietary Directors will increase by €150 to €1,650 from 2021 onwards. This brings it in line with the PAYE Tax Credit.
The Minister reminded taxpayers of the current regime whereby employers can pay their employees €3.20 per day without a benefit-in-kind charge arising or alternatively, the employee can claim a tax deduction for utility expenses, such as light and heat. In his speech, the Minister confirmed that such employees may include the cost of broadband for 2020, details of which will be set out in updated Revenue guidance.