Budget 2021 was designed to deal with the twin threats to businesses of a no deal Brexit and the ongoing Covid 19 pandemic.

Given the significant challenges faced by businesses due to these two issues the budget focused on supports to businesses rather than any big changes in taxes.

Supports for businesses

The main supports announced for businesses were:

  • Covid 19 Restrictions support scheme. Under this scheme businesses may qualify for cash supports of up to €5,000 per week. Full details of this scheme have not yet been announced but it is likely this support will be repayable by the business by way of reduced deductible expenses in future years.
  • Reduction on VAT rate for hospitality and tourism section from 13.5% to 9%. This new rate applies from the 1st November 2020.
  • Extension of tax warehousing scheme to include repayments under the Temporary Wage Subsidy Scheme and preliminary income tax for 2020.
  • Extension of the employment wage subsidy from current end date of March 2021.
  • Self employed earning up to €480 per month can qualify for the Pandemic Unemployment Payment
  • Commercial rates payment holiday extended for remainder of 2020.


Tax changes

The main tax changes announced in the budget were:

  • Increase in earned income tax credit from €1,500 to €1,650 in 2021.
  • Help to buy scheme extended for a further 12 months.
  • Stamp duty refund scheme extended and qualifying period extended from 2 years to 2 ½ years.
  • €203 increase to the 2% USC rate band from €20,484 to €20,687 in 2021.
  • €4 increase in the weekly threshold for the higher rate of employer’s PRSI from €394 to €398 in 2021.
  • Extension of accelerated capital allowances for energy efficient equipment by 3 years and a review of current qualifying equipment.
  • Knowledge Development Box (KDB) relief to be extended for a further 2 years.

Full details of some of the schemes remain to be published. The Finance Bill setting out the full the full details is due to be published within the next two weeks.

If you have any queries on any of the announcements in the budget or wish to discuss any issues facing your business please contact us today.