Home Knowledge Summary of Irish Tax Measures Announced in Response to the Spread of COVID-19

Summary of Irish Tax Measures Announced in Response to the Spread of COVID-19

Summary of COVID-19 Irish Tax Measures Announced

Businesses and communities are dealing with many COVID-19 related issues that are causing severe business disruption. The Irish government has been swift to introduce new measures to mitigate the effects of COVID-19 on business. No doubt further measures will be introduced in due course. Revenue has acknowledged that “tax payment difficulties are an inevitable impact of the COVID-19 pandemic” and has advised taxpayers to pay tax liabilities “if at all possible”.

SME Supports

On 13 March 2020, the Irish Revenue Commissioners (Revenue) outlined some key advice and actions taken to help SME businesses experiencing cashflow and trading difficulties arising from the impact of COVID-19.  According to Revenue, an SME is a business with turnover of less than EUR3m that is not dealt with by either Revenue’s Large Cases Division or Medium Enterprises Division.  The following measures were announced for SMEs: 

  • the application of interest on late tax payments is suspended for the January/February 2020 and March/April 2020 VAT periods and for the February 2020, March 2020 and April 2020 PAYE (employers) periods;
  • businesses experiencing temporary cash flow difficulties should continue to file tax returns on time (even where payment is not immediately possible); and
  • all Revenue debt enforcement activity is suspended until further notice.

Revenue’s advice for businesses other than SMEs experiencing temporary cash flow or trading difficulties is to contact the Collector-General’s office on +353 1 7383663 or engage directly with their branch contacts in Large Corporates Division or Medium Enterprises Division.

Reduction in Tax Debt Interest Rate 

As part of the July Stimulus package (see below) introduced on 23 July 2020, the government included provisions for a reduction in the interest rate applying to agreed repayments of all tax debt. The measures are available for all taxpayers that have declared but unpaid tax debts. They can avail of a reduced interest rate of 3% provided they contact Revenue to agree payment of these debts or have entered into an agreement to pay these debts on or before 31 October 2020. 

Additional Supports

On 2 May 2020 the government announced a suite of measures to further support small, medium and larger businesses that are negatively impacted by COVID-19. These measures include:

  • €10,000 “restart grant” for micro and small businesses based on a rates waiver/rebate from 2019 (estimated that this will cost €250m in total);
  • €2bn Pandemic Stabilisation and Recovery Fund established, within the Ireland Strategic Investment Fund (ISIF), which will make capital available to medium and large enterprises;
  • €2bn COVID-19 Credit Guarantee Scheme to support lending to SMEs for terms ranging from 3 months to 6 years, which will be below market interest rates;
  • “warehousing” of tax liabilities for a period of twelve months after recommencement of trading during which time there will be no debt enforcement action taken by Revenue (this measure has been legislated for by the Financial Provisions (Covid-19) (No.2) Act 2020). It was announced in Budget 2021 (13 October 2020) that this support will be expanded to include repayments of subsidies under the TWSS and self-employed taxpayers that have difficulty meeting their 2019 income tax balance of tax and 2020 preliminary income tax payment obligations; 
  • a commitment to local authorities to make up the rates shortfall, so that local authorities can continue to provide full services to the public; and
  • the waiving of commercial rates for a three-month period beginning on 27 March 2020 for businesses that have been forced to close due to public health requirements. This incentive has been expanded until 31 December 2020.

Tax Repayments/Refunds 

Revenue has indicated that it will continue to prioritise the approval and processing of tax repayments and refunds (primarily VAT repayments, PSWT refunds and excess R&D tax credits) to taxpayers. Where verification checks are necessary, Revenue will conduct these through their MyEnquiries service or by telephone.

Where any instalments of excess R&D tax credits are due to be paid in 2020, a request can be made to bring forward the payment date. The company’s corporation tax return for the accounting period ending in 2019 must be submitted at the time of the request.

Reduction in the Rates of VAT 

From 9 April 2020, a zero rate of VAT has applied to personal protection equipment, thermometers, hand sanitiser and respiratory equipment. This temporary measure is due to expire on 31 October 2020. 

As part of the July Stimulus package introduced on 23 July 2020, the government announced a temporary reduction in the standard rate of VAT. The standard rate of VAT will be decreased from 23% to 21% for the period from 1 September 2020 to 28 February 2021.

Budget 2021 introduced a temporary reduction of VAT for tourism and hospitality items from 13.5% to 9%. This reduction will be in effect from 1 November 2020 to 31 December 2021. 

Revenue Interventions

Revenue has suspended tax audit and other compliance intervention activity on taxpayers’ premises until further notice. Where possible, Revenue will engage with businesses to finalise open interventions through MyEnquiries or by telephone. 

Relevant Contracts Tax Rates and Tax Clearance Status

The RCT rate review that was scheduled to take place in March 2020 was suspended as the process may have resulted in a subcontractor’s RCT rate increasing due to changes in their tax compliance position. 

Current tax clearance status will remain in place for all businesses over the coming months.

Filing Tax Returns

Revenue have reiterated that taxpayers (individuals and businesses) should continue to file their tax returns even if payment of the resulting liabilities, in whole or in part, is not possible. Where, due to COVID-19, key personnel that compute tax returns are unavailable, Revenue advise that the relevant return is submitted on a “best estimate” basis. Subsequent amendments can be completed on a “self-correction” basis”. They have also indicated that the application of the corporation tax surcharge (for late filing of corporation tax returns) for accounting periods ending June 2019 onwards (i.e. due by 23 March 2020 onwards) is suspended until further notice and there will be no restriction of reliefs (such as loss relief and group relief) due to the late filing.

On 17 September 2020, two further four-week extensions were announced by Revenue to the Pay & File deadline for income tax and CAT where individuals file online. The deadline for filing the 2019 self-assessed income tax return and payment of preliminary tax for 2020 is now 10 December 2020.  Beneficiaries receiving gifts or inheritances in the year ending 31 August 2020 now have until 10 December 2020 to submit a CAT return and make payment. To avail of these extensions, the pay and file must be through Revenue’s online service (ROS); otherwise the deadline is 31 October 2020.

Close Company Surcharge

Legislation provides for an additional corporation tax charge of 15% or 20% on certain undistributed income of close companies. This surcharge does not apply if such income is distributed within 18 months of the end of the accounting period in which it arose. 

Recognising that the COVID-19 crisis may require many companies to retain cash to support their business, and that such companies may decide not to make distributions at this time, on 13 May 2020  Revenue announced that if a distribution is not made within the 18 month period “in response to COVID-19 circumstances affecting the company” Revenue will, on application, extend the 18 month period for distributions by a further 9 months.  Revenue hopes that this additional time will enable the company to be better informed about the impact of the current circumstances before making a distribution. 

This measure will apply for accounting periods ending from 30 September 2018 onwards for which distributions to avoid the surcharge would be due by 31 March 2020 onwards. Revenue recommends that companies keep a contemporaneous record of the circumstances in which the application to delay making a distribution was made. 

Deferral of Stamp Duty on Credit Cards

The Minister for Finance announced on 18 March 2020 that he was deferring the annual collection of stamp duty on credit cards (i.e. EUR30 per credit card account) from 1 April 2020 to 1 July 2020.  The collection date will be changed automatically by financial institutions.  

Deferral of Payment of Local Property Tax

For property owners who opted to pay their LPT for 2020 by annual debit instruction or single debit authority payment, the payment date will automatically change from 21 March 2020 to 21 July 2020.

Real Time Foreign Tax Credit for Restricted Stock Unit Cases

The 31 March 2020 filing deadline has been suspended for cases where real time foreign tax credits were provided through the payroll. The 2019 income tax return for affected employees will revert to the standard income tax filing deadline (i.e. 31 October 2020 or 12 November 2020 for ROS filings, as appropriate) for that return. Revenue advised that the employer notification to Revenue in relation to such cases should be made as soon as possible, but no later than the applicable extended income tax filing date.

Share Schemes Filing Obligations

The filing deadline for all 2019 share scheme returns is extended from 31 March 2020 to 30 June 2020.

Exchange of Information  

Revenue have announced an extension and deferral of certain time limits for the filing, reporting and exchange of information for DAC2/CRS, FATCA and EU mandatory disclosure regime  introduced by Council Directive (EU) 2018/18/822 (DAC6). 

The deadline for the filing of DAC2 returns for the 2019 reporting period is now deferred until 30 September 2020. This new deadline will also apply for the filing of CRS and FATCA returns in line with what has already been agreed by the Global Forum on Transparency and Exchange of Information for Tax Purposes and by the United States. 

DAC6 came into operation on 1 July 2020. However, the 30-day time period for the reporting of information related to new reportable cross-border arrangements will now commence on 1 January 2021. For any reportable cross-border arrangements made between 1 July 2020 and 31 December 2020, the 30-day reporting period also commences on 1 January 2021. For reportable cross-border arrangements the first step of which was implemented in the “lookback reporting period” (i.e. between 25 June 2018 and 30 June 2020) the new reporting deadline is 28 February 2021. The new reporting deadline for periodic reporting of “marketable arrangements” is 30 April 2021.  

Special Assignee Relief Program (SARP)

The 90-day employer filing obligation is extended for a further 60 days.  Revenue believes that this extension should provide sufficient time for employers to file the required return.

Trans-Border Worker Relief

If employees are required to work from home in Ireland, due to COVID-19, such days spent working at home in Ireland will not preclude an individual from being entitled to claim this relief, provided all other conditions of the relief are met. 

PAYE Dispensation Applications

Due to the current restrictions on travel, Revenue will not “strictly” enforce the 30-day notification requirement for PAYE dispensations applicable to short term business travellers from countries with which Ireland has a double taxation treaty who are going to spend in excess of 60 work days in Ireland in a tax year.

Foreign Employment – Operation of PAYE

Revenue will not seek to enforce Irish payroll obligations for foreign employers in “genuine” cases where an employee was working abroad for a foreign entity prior to COVID-19 but relocates temporarily to Ireland during the COVID-19 period and performs duties for his or her foreign employer while in Ireland.

PAYE Exclusion Order – Irish Contract of Employment

The tax position of employees working abroad for a foreign employer under an Irish contract of employment, where a PAYE exclusion order is in place, will not be adversely impacted if the employee works for more than 30 days in Ireland due to COVID-19.

Residence Rules – Force Majeure Circumstances 

Whether an individual is considered tax resident in Ireland in a particular tax year depends on the number of days (or part of a day) spent in Ireland in that tax year (or preceding tax year). 

Revenue’s existing position is that in circumstances where an individual is prevented from leaving Ireland on their intended day of departure due to “extraordinary natural occurrences” or an exceptional third party failure or action, none of which could reasonably have been foreseen and avoided, the individual will not be regarded as being present in Ireland for tax residence purposes for the day after the intended day of departure, provided the individual is unavoidably present in Ireland on that day due only to force majeure circumstances.

Revenue has clarified that where a departure from Ireland is prevented due to COVID-19, Revenue will consider this force majeure for the purposes of establishing an individual’s tax residence position. 

E-Working and Tax

Revenue has updated its “e-Working and Tax” manual.  Details can be accessed at E-Working and Tax

As part of Budget 2021, it was announced that e-workers will be able to claim income tax relief for the cost of broadband in their homes. Revenue will accept a claim of 30% of the cost of broadband for the days worked from home. An income tax return must be filed to avail of the relief.

Corporation Tax and Presence in Ireland or Outside Ireland Resulting from Covid Related Travel Restrictions

Where an individual is present in Ireland (or in another jurisdiction and would otherwise have been present in Ireland) and that presence is shown to result from travel restrictions related to COVID-19, Revenue will be prepared to disregard such presence in Ireland, for corporation tax purposes, for the company where the individual is an employee, director, service provider or agent. Revenue stresses that the individual and the company should maintain a record of the facts and circumstances of the “bona fide” relevant presence in Ireland, or outside Ireland, for production to Revenue if evidence of such presence is requested.

Pharmaceutical Products, Medical and Personal Protection Equipment 

As a temporary concession, Revenue will allow the application of the zero rate of VAT to the supply to the Health Service Executive, hospitals and other health care settings of personal protection and specified medical equipment for use in the treatment of patients with COVID-19. 

Goods imported from outside the EU which are used to combat the effects of COVID-19 will be relieved from customs duty and import VAT from 30 January 2020 to 31 October 2020.   

Critical pharmaceutical products and medicines will be given a Customs “green routing” to facilitate uninterrupted importation and supply.

Charities VAT Compensation Scheme 

The Charities VAT Compensation Scheme was introduced to reduce the VAT burden on charities and partially compensate for VAT paid in the day to day running of the charity. In response to the impact of COVID-19, the closing date for submission of claims under the VAT Compensation Scheme was extended this year, from 30 June 2020 to 31 August 2020. This is a temporary measure and applies to claims submitted in respect of eligible VAT paid by charities in 2019.

Relief from Excise Duty for the Manufacture of Hand Sanitiser Products

Alcohol products tax will not apply to alcohol used in the production of a range of medicinal and other products such as hand sanitisers. 

Pandemic Unemployment Payment 

The Pandemic Unemployment Payment (PUP) was introduced for those made unemployed by the COVID-19 pandemic and was initially paid at a flat rate of €350 per week. From 29 June 2020, two rates of payment applied based on the amount earned by the individual from the previous employment. For those who earned less than €200 per week, the payment has changed to €203 per week. For those who earned €200 or more per week, the payment did not change and remained at €350 per week

The PUP was extended to 1 April 2021 by the July Stimulus package announced by the government on 23 July 2020. The amounts payable under the PUP were set to reduce over several stages. On the 15 September 2020 the scheme was extended to allow for new entrants until the end of 2020. Furthermore, Budget 2021 expanded the scope of PUP so that self-employed workers are now be able to earn a gross amount of €480 a month before losing their PUP.

From 17 September 2020

From 17 September 2020 until 15 October 2020 there were three PUP rates. Those earning over €300 per week before the pandemic received a new top rate of €300 (reduced from €350). Those earning between €200 and €300 prior to the pandemic received €250 (unchanged from €250). Those earning less than €200 prior to the pandemic will continue to receive €203 (the current rate of jobseeker’s benefit).

From 16 October 2020

On 19 October, it was announced that from 16 October 2020 until 31 January 2021, there will be four PUP rates:

  • €203 per week for those who earned less than €200 a week;
  • €250 per week for those who earned between €200 and €299.99 a week
  • €300 per week for those who earned between €300 and €399.99 a week; and
  • a maximum payment of €350 per week for those who earned €400 or more a week.

From 1 February 2021 
From 1 February 2021 PUP will consist of two rates. Those earning between €200 and €300 prior to the pandemic will receive €203 (the current rate of jobseeker’s benefit). Those earning over €300 per week prior to the pandemic will receive €250. 

From 1 April 2021 
The PUP will be closed from 1 April 2021 and remaining recipients must apply for jobseeker’s benefit. 

Redundancy Provisions 

On 4 August 2020, the government extended the suspension of redundancy provisions arising as a result of COVID-19 until 17 September 2020. This suspension relates to redundancy entitlements following temporary lay-offs and short-term work due to the pandemic. On 15 September 2020, these provisions were extended until 30 November 2020.

COVID-19 Credit Guarantee Scheme

On the 14 July 2020, the government announced a €2bn COVID-19 credit guarantee scheme which will provide low cost loans to businesses impacted by COVID-19. 

The Credit Guarantee (Amendment) Act 2020, which underpins the scheme and removes the previous portfolio cap, was commenced on 11th August 2020. 

This scheme is the largest credit guarantee scheme for businesses in Irish history. It is intended to ensure that SMEs, primary producers and small mid-cap companies can access liquidity to keep their businesses operating, as the economy continues to reopen. It is available for a wide range of products including overdrafts, term loans and working capital facilities.’

Social Protection Measures

COVID-19 Temporary Wage Subsidy Scheme

The Irish government announced new measures on 24 March 2020 and 15 April 2020 to provide financial support to Irish workers affected by the COVID-19 crisis.  This temporary wage subsidy scheme (TWSS) applied to all employers from all sectors (other than the public service and non-commercial semi-state sector) whose business activities were being adversely impacted by the COVID-19 pandemic. In addition, employers must have retained their employees on the payroll and must have been able to demonstrate a minimum of a 25% decline in expected turnover / customer orders for quarter 2, 2020 (when compared with prior comparable periods) and be unable to pay normal wages and normal outgoings fully.  Application for the scheme was based on self-assessment principles and a qualifying employer must have declared that it was significantly negatively impacted by the COVID-19 crisis.  Employers should retain their evidence/basis for entering the wage subsidy scheme as verification checks may be carried out by Revenue in the future.  Revenue indicated in  published guidelines that an employer hit by a significant decline in business but with strong cash reserves, that was not required to fund debt, would still qualify for the wage subsidy scheme but the government would expect such employer to continue to pay a “significant proportion” of the employees’ wages.  

The scheme enabled employees, whose employers were affected by the pandemic, to receive significant supports directly from their employer and was to run for 12 weeks from 26 March 2020. On 23 June 2020 Revenue announced an extension of the scheme to August 2020.  

To address certain “anomalies” in the scheme as introduced, the Minister of Finance announced on 15 April 2020 further changes to the scheme which would apply to those earning less than €500 per week (approx. €31,000 per annum) as well as those earning in excess of €586 per week (€38,000 per annum).  See details below. These changes meant that from 4 May 2020, more employees would receive a subsidy of €350 per week, and those with previous net pay below €412 per week would receive a greater level of subsidy.   

The scheme was also extended to employees who were in receipt of Illness or other benefits paid by the Department of Employment Affairs & Social Protection (DEASP). Employers received appropriate subsidy payments for affected employees from 12 June 2020. The changes apply applied retrospectively to 26 March 2020 for relevant employees.

On 23 June 2020, Revenue implemented a change to the scheme to accommodate apprentices returning to work who were on an apprenticeship education and training programme run by SOLAS and were not on their main employer’s payroll in February 2020. 

Some key features of the scheme included:

  • it applied to employees who were on the employer’s payroll as at 29 February 2020 and for whom a payroll submission has already been made to Revenue in the period from 1 February 2020 to 15 March 2020;
  • on 24 April 2020 Revenue announced that certain employers who had not fulfilled their PAYE reporting obligations for February 2020 by 15 March 2020 would be allowed to access the scheme provided (i) the employees were included on the employer’s payroll on 29 February 2020, (ii) the February 2020 payroll submission was submitted to Revenue before 1 April 2020, and (iii) payroll submissions for all previous months were submitted to Revenue before 15 March 2020;
  • subsidy payments up to the relevant thresholds were to be refunded by the Irish government to employers via the payroll process;
  • employers were to be refunded up to a maximum of €410 per week for each qualifying employee (for employees earning less than or equal to €586 per week net) via the payroll process;
  • employers were to be refunded up to a maximum of €350 per week for each qualifying employee (for employees earning over €586 per week net and less than or equal to €960 per week net) via the payroll process;
  • in April 2020, the scheme moved to a subsidy payment based on 70% of the weekly average take home pay for each employee up to a maximum of €410;
  • income tax and USC were not be applied to the subsidy payment through the payroll;
  • employee PRSI did not apply to the subsidy or any top up payment by the employer;
  • employers PRSI did not apply to the subsidy and employers PRSI was reduced from 10.5% to 0.5% on any top-up payment, and
  • from 26 March 2020, employers or their tax agents could apply to operate the scheme through ROS. Further details of the scheme can be found here

From 4 May 2020, the scheme moved into the “Operational Phase” with the following enhanced features:

  • for employees with net pay less than €586 per week (€38,000 p.a.) with previous average net pay:
    • up to €412 per week (equivalent to almost €24,400 p.a.), the subsidy increased from 70% to 85% of their previous net weekly pay, and
    • between €412 and €500 per week (equivalent to €24,400 p.a. to €31,000 p.a.), the subsidy was up to €350 per week*
  • where an employer wished to pay a greater level of top-up – above the outstanding 15% of previous pay – (for employees with net pay less than €412 per week) in order to bring the employee’s pay to €350 per week, then tapering would not be applied to the subsidy*
  • for employees with previous net pay in excess of €586 per week (equivalent to €38,000 p.a.), a tiered approach applied, but the maximum subsidy payable remained €350 per week.  The tiered approach considered both the amount paid by the employer and the level of reduction in pay borne by that employee to ensure that no employee would be better off under the scheme*
  • the scheme was made available to support employees where the average net pre-COVID 19 salary was greater than €76,000 p.a. and their gross post-COVID-19 salary fell below €76,000. The tiered arrangement applicable to gross incomes in excess of €38,000 p.a. applied in such circumstances*

*these measures were announced by the Minister on 15 April 2020 and applied for payroll with a pay date on or after 4 May 2020 and received by Revenue on or after that date (i.e. no back-dating of increased subsidy applied)

Exiting the Scheme 

On 23 June 2020 Revenue announced that employers who ceased to meet the eligibility criteria or no longer wished to avail of the TWSS should stop returning J9 PRSI Class payroll submissions to Revenue. Employers should have also informed Revenue via MyEnquiries of their intention to exit the scheme and ensure the employee J9 PRSI Class submissions (J9 submissions) are reverted, on future payroll submissions for each employee, to their normal pre-COVID-19 PRSI class. Those employers who have stopped participating in the scheme were included in the reconciliation phase of the scheme and will be included in the list of scheme participants published at the end of the scheme. 

New Employment Wage Subsidy Scheme 

As part of the July Stimulus package announced on 23 July 2020, the government introduced the new Employment Wage Subsidy Scheme (EWSS). The TWSS ended on 31 August 2020 and was replaced by the EWSS. The EWSS is a payroll subsidy scheme that applies from 1 September 2020 to 31 March 2021. Based on statement made by the Minister for Finance on 13 October 2020, it is likely a similar scheme will be introduced from 31 March 2021.

To qualify for the EWSS the employer must establish they are operating at no more than 70% turnover/customer orders for the period 1 July to 31 December 2020 compared to the same period last year. The EWSS was to have a pay rate of €203 or €151.50 gross per week depending on the gross pay of qualifying employees. Proprietary directors and certain connected persons are not considered qualifying employees.

It was announced on 19 October 2020 that the subsidy rates would increase for pay dates on or after 20 October 2020. The EWSS now has pay rates of €203, €250, €300 and €350 depending on the gross pay of qualifying employees. These rates are now comparable to the PUP. Where gross weekly pay is greater than €1,462 or less than €151.50 no subsidy will apply. These rates will apply up to 31 January 2020.

July Stimulus Measures  

On 23 July 2020 the government announced the July Stimulus package which introduced many measures to aid economy recovery following the COVID-19 pandemic. The package contains €1bn in tax measures, €500m in capital expenditure and €4bn in new current spending. The following measures were introduced by the July Stimulus package:

  • Stay and Spend Incentive 
    A tax credit was brought in to encourage tourism within Ireland. This tax credit was introduced to help the accommodation and food sector, the purpose of which is encourage taxpayers to support domestic providers of accommodation and food during the off-season.

    Revenue will provide an income tax credit of €125 per taxpayer, or up to €250 for a jointly assessed married couple. The taxpayer may submit receipts up to a cap of €625 total. A taxpayer must spend a minimum of €25 on qualifying expenditure and submit the receipt to Revenue using a mobile app. This incentive is confined to expenditure in the period from 1 October 2020 to 30 April 2021.

  • Corporate Tax Loss Relief
    The stimulus plan will provide additional liquidity supports for businesses through enhanced corporate tax loss relief. Repayments of corporation tax that would otherwise become due over the next 18 months will be accelerated. This will provide a cash-flow support to previously profitable companies experiencing losses due to the COVID-19 pandemic.

    The maximum amount of the expected current year loss which will qualify for early carry-back will be 50%. The balance will qualify for carry-back under the normal rules in due course.

  • Income Tax Relief 
    The stimulus plan introduced a new once-off income tax relief measures for self-employed individuals to provide liquidity. Section 10 of the Financial Provisions (Covid-19) (No. 2) Act 2020 legislated for the temporary income tax measures to assist self-employed individuals who have been adversely impacted by the COVID-19 restrictions.

    The aim of these measures is to benefit self-employed individuals who were profitable in 2019 but are loss making in 2020 as a result of public health measures. It is estimated that this will result in a liquidity boost of €150 million in 2020 for those affected.

    The measures will give individuals carrying on a trade or profession as sole traders or members of partnerships a cash-flow boost from the early utilisation of up to €25,000 worth of 2020 losses (and certain unused capital allowances) off-set against 2019 profits.

    The measures also include an additional option for farmers to step out of income averaging for the 2020 tax year.

  • Help to Buy Scheme
    On 13 October 2020, it was announced during the Budget 2021 speech that the enhanced Help to Buy Scheme will be extended from 31 December 2020 to 31 December 2021. The enhanced support has been effective since 23 July 2020 and will apply to applicants who sign a contract for the purchase of a new house or who have yet to make the first draw down of the mortgage in the case of a self-build. 

    The scheme aims to stimulate demand from first time buyers for new houses, to encourage house completions and to assist first time buyers accumulate a deposit for a new home. Support available to first time buyers will increase to the lesser of

    • €30,000 (up from €20,000); or
    • the amount of income tax and DIRT paid for the 4 previous years; or
    • 10 per cent (up from 5 per cent) of the purchase price of the new home/ or self-build property. 

    Conditions that need to be met to avail of this scheme include:

    • joint buyers must both be first time buyers;
    • the property must be the first time buyer’s home as the scheme does not include investment properties;
    • a mortgage of at least 70% of the price of the property must be taken out;
    • properties must cost €500,000 or less;
    • the property must be resided in for 5 years; and
    • those claiming the relief must be fully tax compliant for the previous 4 years.
  • Cycle to Work Scheme
    The stimulus plan changed the Cycle to Work Scheme to increase the allowable expenditure. For ‘ebikes’, expenditure will be increased from €1,000 to €1,500 and in respect of bicycles expenditure will be increased to €1,250. The current scheme allows for purchase of a new bicycle every 5 years, the stimulus plan will reduce this to 4 years. All other parameters of the scheme will remain the same.

Measures for Businesses

  • Restart Grant
    The Restart Grant for enterprises will be expanded by €300m, which will bring the total funding to €550 million. A broader base of SMEs are now eligible for grant funding and those who have availed of the Restart Grant may receive further funding. Under the Restart Grant the maximum payment will now be €25,000, increased from €10,000. The minimum payment will be €4,000, increased from €2,000.
  • Credit Guarantee Scheme 
    The Credit Guarantee Scheme was introduced. The scheme is worth €2bn and established an 80% guarantee for credit products ranging from €10,000 to €1m for a term of up to 6 years.
  • Commercial Rates Waiver  
    The initial waiver of commercial rates for six months ending September 2020 at a cost of €600m has been extended by Budget 2021 to the end of 2020, at an additional cost of €300m.
  • Liquidity and Enterprise Investment Measures 
    Liquidity and enterprise investment measures worth €55m will be implemented to support small and micro companies through additional resources for MicroFinance Ireland and the Local Enterprise Offices. These measures include reduced interest rates on lending for micro and small businesses.

    Funding for the seed and venture capital sector through Enterprise Ireland will be increased by €10m. The Covid Life Sciences Products Scheme will have a €25m investment to aid research, development and production of medicinal products in Ireland which will be used in the fight against COVID-19. The first phase of the new Green Enterprise Fund will receive €10m to support green research, development and innovation, capital investment, and capital building. 

  • Brexit Measures  
    A €20m Brexit fund will be established to put in place staff, software and IT systems required for new customs arrangements from 1 January 2021. These measures are to help SMEs involved in exporting to and importing from the UK.
  • Business Loans 
    The European Investment Bank Group’s Future Growth scheme will be extended to €500 million. This will enable businesses with 499 employees or fewer to invest at competitive rates for longer-term investments. The Enterprise Ireland €180 million Sustaining Enterprise Fund scheme will be expanded to include direct grant support to viable businesses.
  • Tourism 
    A Restart Fund of €10 million into the tourism sector is being introduced. Additionally, a Performance Support Scheme for the culture sector of €10 million is being introduced.
  • Online Retail Scheme  
    Enterprise Ireland’s €5.5m Online Retail Scheme will assist businesses establish their online presence. Additionally, the local enterprise offices are expanding the €20m Online Trading Voucher Scheme to assist online retail.
  • Labour Market 
    Employment incentives for businesses to hire apprentices and young people has been introduced in a €200m plan aimed at assisting the proper functioning of the labour market.
  • Film Relief
    Recognising that the film industry has been particularly hard hit by COVID-19, the section 481 TCA 1997 film tax credit has been extended by a year, at the rate of 5%, until 31 December 2021. The rate will reduce to 3% in 2022 and then to 2% in 2023, which will be the final year of the scheme.
  • Covid Restrictions Support Scheme 
    Budget 2021 introduced the Covid Restrictions Support Scheme (CRSS). The CRSS is aimed at businesses that have had to reduce or cancel their operations as a result of COVID-19 restrictions. Applications can be made to Revenue for a cash payment, representing an advance credit for trading expenses that are deductible for income and/or corporation tax purposes (ACTE) for the period of impacting restrictions from 13 October 2020.

    The payments are calculated on the basis of 10% of the first €1m in turnover and 5% thereafter, based on average turnover for 2019. The maximum weekly payment is €5,000.

    The CRSS will generally apply at Level 3 COVID-19 restrictions or higher and is to run from 13 October 2020 to 31 March 2021.

How Can We Help You?

Our partners, associates and our support teams are available as usual to support your business. We also have a specific COVID-19 Hub on our website to help you with all aspects of your business. 

Please contact Brian Duffy or your usual William Fry contact if you wish to discuss any tax issue.