Yesterday, the Government announced details of Budget 2021, the largest in the history of the State. So first, let’s look at what comes into effect today…
Carbon Tax
This has been increased from today by €7.50 per tonne of CO2 emitted. This will apply to petrol and diesel from today, 14th October 2020. This will not apply to home heating fuels.
Cigarettes
A packet of cigarettes has increased by 50c from today, 14th October 2020.
Weekly rebates for Closed Businesses due to Covid
A new scheme was announced and will be in effect from today. Where a business has been forced to close due to Level 3 or higher Covid restrictions in place, may be eligible to claim up to €5,000. This will be based on their average 2019 weekly turnover and paid in conjunction with The Employment Wage Subsidy Scheme.
VAT
A reduced VAT rate of 9%, down from 13.5% will come into effect for the hospitality and tourism sectors from 1st November 2020.
From January 2021, these are the main areas addressed by Government in the Budget for 2021;
Earned Income Tax Credit
This will increase by €150 to €1,650 for the self-employed and Proprietary Directors
Dependent Relative Credit
This tax credit will increase by €175 to €245 from January 2021.
USC
The 2% USC band will be increased from €20,484 to €20,687
Living Alone & Fuel Allowance
This has been increased by €5 per week to €19 per week along with the fuel allowance increased by €3.50
Child Benefit
For children under 12, this has been increased by €2 and for over 12, an increase of €5 will apply
The Government is also putting in place a Recovery Fund for businesses of €3.4 billion in light of the threat posed by Brexit.
No change to DIRT, exit tax, Capital Gains Tax or Capital Acquisitions Tax rates or band were announced. Other taxation and pension changes not announced may be introduced later in the Finance Bill 2020.
Why not read some of our previous blogs here