The 2021 Budget was announced yesterday, the 13th October 2020, by Finance Minister Paschal Donohue. The first budget of the three-party coalition government, which was drafted in the midst of great uncertainty.
With Covid-19 and Brexit rightly dominating this year’s Budget, the focus was on ‘Building a Stronger Ireland’ and sustaining Irish Business for the next 12-24 months.
So how will this affect your business? Key take-aways include:
- No change to personal tax credits for employees or the standard rate band entry level into the higher rate of income tax, due to a focus on saving jobs and protecting lives.
- Increase in tax credits for small business owners and self-employed people from €1,500 to €1,650.
- Increase in the ceiling for the second USC rate from €20,484 to €20,687.
- Reduction in the VAT rate for the Hospitality and Tourism Sector from 13.5% to 9%, with effect from the 1 November 2020.
- A small increase in the farmers flat rate addition to 5.6% from 1 January 2021.
- No change to the 12.5% rate of Corporation Tax.
- Stamp Duty consanguinity relief extended for another 3 years, reducing Stamp Duty on land transfers between family members to 1%.