The government of Ireland has announced the March 2021 budget amidst the pandemic situation. The government this time majorly focused on public expenditure. Many firms in the accounting and bookkeeping business predicted their forthcoming tax seasons that are affected by the new clauses in the budget and the post-Brexit rules.
Outsourced Bookkeeping experts in Ireland also asked the government to not uplift the important government support schemes as these schemes were allowing many freelancing bookkeepers to work easing during the covid-19 pandemic situation. The Irish and the UK government considered these things and introduced some measures in the budget to support small business and contractors.
Below we have talked about some of the measures that were announced in the budget that day. Support for areas that are highly affected by the pandemic.
The Irish government will introduce the Covid Restrictions Support Scheme to offer money to some people of up to EUR5000 weekly payment. It will be for those small or medium-sized businesses that have faced tough situations due to the heavy lockdown and Brexit. This scheme will work till 31 march 2021. The payments will come as an advanced credit for tax-deductible trading costs.
The VAT of 13.5% which was applicable to the particular tourism and hospitality sector related things is going to be reduced from November 1st 2020 until 31st December 2021 to 9%. This will help the hospitality and tourism sector to save a lot of their expenses and focus more on their key development areas to improve their businesses and the overall economy.
In March 2020, the government introduced some commercial rates waiver. In the budget speech, the finance minister confirmed that he will be extending them to 31st December 2020 to financially help the qualified businesses that are genuinely affected by the pandemic situation.
- The Irish government is famous for helping corporations around the country. It is one of the countries that have a very low corporation tax trading rate. The government has again reaffirmed to make 12.5% tax.
- In the next year’s budget, the government indicated that the changing of the interest limitation rule and reverse hybrid mismatch rules foreseen by the EU Anti-tax Avoidance Directive is expected to be initiated from January 1st 2022. It happened because of the recommendation given by the Tax Strategy Group. This will be confirmed in the update that the Irish government will give soon on Ireland’s Corporation Tax Roadmap.
- The government also talked about the Capital Gains Tax Entrepreneur Relief. This permits the profits on the transfer of eligible business sites. It is reduced from 33%. The government will amend it so that a person who has not less than 5% of the normal shares for a constant time frame of 3 years will be eligible for the relief.
- Earlier, a person must have to have not less than 5% for a consecutive term of 3 years in the 5 years directly preceding the sale. The person still has to serve in the market for 3 out of the 5 years instantly before the sale of shares.
- One new policy is also introduced to counter the permissible loss that arises when bank accounts of the same holder do the exchange of foreign currency.
- A scheme named EII (Employment and Investment Incentive Scheme) has been examined and probably improved with a concentration on supporting start-ups, the incorporation of resource-saving projects and inviting capitals from different investors. This scheme used to enable people to get income tax support on investments done for EII certified qualifying companies.
- On Exit tax legislation the government will make a technical amendment to the estimation of interest on instalment payments.
People of Ireland were broadly expected that the Finance Minister will confirm that no changes will be given to Ireland’s income tax rates or bands and the same happened. The government approved the dedication to promoting a plan for remote working as well as service delivery, including the preparation of certain tax credit support for workers.
In helping the climate changes, the government increased the carbon taxes to fulfil the government’s target of zero carbon emissions by 2050. It will ultimately help the people of Ireland but affect some of the companies that emit carbon dioxide.