Budget 2021 Highlights
The Employment Wage Subsidy Scheme is to continue until 31 March 2021, while the Government says a similar scheme to be introduced for the remainder of the yar.
There will be a new scheme of targeted support for businesses significantly affected by Level 3 or higher restrictions. The Government will make a payment based on 2019 average weekly turnover and it will be effective from today until 31 March, with a maximum payment of €5,000 per week.
Workers can claim remote working-related tax deductions for broadband expenses and other vouched expenses wholly for their employment.
An additional €10m was announced for the Covid-19 stability fund for community and voluntary organisations, charities and social enterprises.
Further commercial rate waiver in the final quarter of 2020 at a cost of €300m.
Portions of the €1.1bn in funding for the Department of Enterprise, Trade and Employment will be used to support SMEs through local enterprise offices and Enterprise Ireland, fund research and development under the Covid products scheme and the implementation of the Credit Guarantee Scheme and the Future Growth Loan Scheme.
The planned increase in pension age to 67 will not go ahead on January 1
The living alone allowance will increase by €5 to €19 in January 2021.
The fuel allowance will increase by €3.50 per week to €28 in January 2021.
The qualified child payment will increase by €5 for over-12s and €2 for under-12s in January 2021.
In June 2021, the Carers Support Grant will be increase by €150 to €1,850 per year.
On an unspecified date in 2021, the parent's benefit will be extended by three weeks.
Self-employed people can take up intermittent work without losing their Pandemic Unemployment Payment through an earnings disregard system.
The Christmas bonus will be paid for all social welfare recipients and most PUP recipients. For this year only, the 15-month requirement will be reduced to four months.
Families with caring responsibilities will see the dependent relative tax credit increased by €70 to €245.
The green tinge in the Budget comes in the form of a carbon tax rise and VRT changes.
For drivers, the carbon tax rise means fuel prices will go up from midnight.
There will be tax breaks for green vehicles and higher VRT rates for polluting cars.
VRT relief for plug-in hybrid and electric will expire. VRT relief will be tapered for battery electric vehicles.
Nitrogen oxide surcharge bands will be adjusted to ensure higher emitting vehicles pay more.
Used vehicle imports subject to weaker emission tests will have CO2 values uplifted equivalent with the world harmonised light-duty vehicles test procedure, which will also form the basis of a new motor tax table for vehicles registered after 1 January 2021.
Excise duty on a pack of 20 cigarettes will rise by 50 cent with a pro rata increase on other tobacco products.
There is no tax increase on alcohol.
There have been no major changes to personal taxation on income.
Due to the changes in minimum wage, the ceiling of the second USC rate band will be increased from €20,484 to €20,687, while the weekly threshold for the higher rate of employers' PRSI will be increased from €394 to €398.
The SUSI grant for postgraduate study will be increased to €3,500 and the income eligibility for the grant will be adjusted. There will also be a one-off funding of €50m for extra supports for third-level students.
Housing and Homelessness
The Help-to-Buy scheme will be extended until the end of 2021, while the Residential Development Stamp Duty Refund Scheme will be extended until 31 December, 2022 with the completion time frame extended to two-and-a-half years.
An extra €500m will be directed towards capital expenditure and facilitate the construction of 9,500 social housings units in 2021. There will be a total of 12,750 units added to social housing stock when leased units are included.
There will be a total of €65m available to fund deep retrofitting of the social housing stock.
There is a current expenditure allocation of €2.4bn in 2021 to support an additional 15,000 HAP tenancies, and 800 rental accommodation scheme tenancies.
Climate and Environment
The Government says it is committed to the country becoming climate neutral by 2050.
The carbon tax will increased by €7.50 per tonne, from €26/tonne to €33.5/tonne. This will be applied on auto fuels from tonight and all other fuels from May 2021.
This tax will increase by €7.50 every year up until 2029 and by €6.50 in 2030 to achieve €100/tonne.
There will be an extension to capital allowances schemes for energy efficient equipment for a further three years.
As per the July Stimulus, the standard VAT rate reduction form 23% to 21% will run until 28 February.
A reduction in the VAT rate for the hospitality and tourism sector will come into effect from 1 November. This will reduce the rate from 13.5% to 9%.
There is an additional €55m for a tourism business support scheme and €5m for a tourism product development scheme.
€1.8bn to the Department of Agriculture will include funding for controls for agri-food imports and exports in relation to Brexit.
Consanguinity relief will be extended by three years, while the 1% stamp duty rate for farm consolidation will be extended until the end of 2022.
The farmer’s flat VAT rate addition will be from 5.4% to 5.6% from January 1.
Transport and Infrastructure
There will be a €10m provision to address challenges at Cork Airport and
In terms of an all-island economy, €500m will be provided to the new Shared Island Unit in the Department of an Taoiseach over five years for key cross border infrastructure projects.
Justice and Defence
There will be an extra €7.5m provided for an expansion of the garda fleet, the continuation of hire of vehicles and telecommunication improvements.
An additional €147m will be allocated to the justice sector in 2021, including funds for up to 620 new garda recruits and 500 staff for administration roles
Arts and Culture
The film sector will get an extra year at the peak rate for the Section 481 tax credit, while there will also be a tax credit for the digital gaming sector from January 2022.
There is additional funding of €14m for the Gaeltacht and Irish language sector with a total allocation of more than €78m.
€50m will be given in supports for the live entertainment sector and Arts Council Funding will be increased by €50m to €130m.
There is a €36m increase for Sport Ireland funding, a €7m for large scale sports infrastructure, and €2m for major sporting events.