The Government has announced a range of tax, loan and expenditure measures in the July Stimulus Plan to support businesses that are affected by Covid-19.
- Employment Wage Subsidy Scheme (EWSS)
This will support employers by providing a subsidy per employee. It will replace the Temporary Wage Subsidy Scheme from 01st September. The employer must be operating at less than 70% turnover between July -December compared to last year to qualify. It is due to be in place until March 2021.
- Temporary VAT reduction
VAT rate will be reduced from 23% to 21% from 01st September – 28th February 2021
- ‘Stay and Spend’ incentive
Aiming to incentivise taxpayers to spend on accommodation and/or food in Ireland. The Taxpayer must spend a minimum of €25 and submit the receipt to Revenue through a new mobile app, spend is capped at €625. Revenue will apply a credit of 20% of the amount paid, subject to a maximum amount of €125. This is due to run from 01st October – 30th April 2021
- Corporation tax loss relief for companies
Corporation Tax due to be paid over the next 18 months will be accelerated, providing liquidity supports for businesses. The maximum amount of the expected current year loss which will qualify will be 50%
- Income Tax Relief for self-employed
For self-employed individuals, who were profitable in 2019 but due to Covid-19 are now operating at a loss in 2020 will provide a new once-off tax relief of up €25,000 of 2020 losses and unused capital allowances to off-set against 2019 profits.
- Enhanced Help to Buy Scheme
Support available to first time buyers will be increased to the lesser of €30,000 (up from €20,000) or 10 per cent (up from 5 per cent) of the purchase price of the new home/self-build property. This will run until December 2020 and is effective immediately.
- Cycle to Work Scheme
Expense will be increased from €1,000 to €1,500 for e-bikes and €1,250 for bikes. Other amendments made to this scheme allows the purchase of a new bike every 4 years, reduced from every 5 years.
- Reduced interest rate
A reduced rate of 3% to be applied to repayments of tax debt for all businesses, including sole traders once agreed with Revenue
- VAT Warehousing
Businesses effected by Covid-19 can delay their payment of PAYE & VAT with no penalties
Please note this article is for information purposes and does not constitute advice. Details correct at time of publishing.