With the backdrop of a pandemic impacting businesses in an unprecedented way and Brexit looming on the horizon and the 2021 budget was always going to be a fine balancing act.

There are no real surprises in the taxation measures. Income tax measures are virtually unchanged and some corporation tax benefits have been extended, rather than improved. A welcome addition is the VAT reduction for the hospitality sector and an easing of the restrictions for the Capital Gains Tax Entrepreneurs’ relief.

There are also a number of supports for businesses that will be a vital stimulus for those most impacted by COVID measures.

Headlines of the budget include:

Taxation

  • Minor adjustment to USC rates and a welcome increase in the earned income tax credit, but no major changes to income tax.

  • Extension of Corporation Tax reliefs for the Knowledge Development Box and Film Relief

  • Revised balancing charge rules with effect from 14 October 2020 for intangible assets.

  • Easing of restriction on ownership tests for Revised Entrepreneur’s Relief (CGT)

  • Extension of the help to buy scheme

  • Reduction in VAT rate from 13.5% to 9% for the Tourism and Hospitality sector.

  • Climate change addressed through additional carbon charges.

Covid Supports include

  • Introduction of a Covid Restrictions Support Scheme, available to businesses impacted by Level 3 restrictions and above. Payments will be calculated on the basis of 10 per cent of the first €1 million in turnover and 5 per cent thereafter, based on average VAT exclusive turnover for 2019. It will be subject to a maximum weekly payment of €5,000.

  • The Employment Wage Subsidy Scheme (EWSS) will also continue during 2021.

  • €50 million worth of funding is to be made available for the commercial entertainment sector

  • The Arts Council has had its budget increased to €130 million euro to provide support for individual artists, freelance workers, festivals and organisations.

For more detail on the budget, check out our budget booklet available via the link below.

Download our Budget 2021 summary