Budget 2021

13 October 2020

Last Updated: 13 October 2020

Please note that implementation dates for announced changes have been indicated below where available. Not all changes take immediate effect.

We will endeavour to update this with any major changes or annoucements as we digest the budget this year.

Personal Taxation (from 1st January 2021)
• Dependent relative tax credit increased from €70 to €245

• USC 2% threshold adjusted for minimum wage increase (€10.20 instead of €10.10 from 1st January 2021).

• PRSI threshold has also been adjusted in respect of the minimum wage increase, from €10.10 to €10.20. (from 1st January 2021)

• No other changes to Income Tax, USC and PRSI rates with the exception of the above two changes.

Covid
• Commercial Rates for 2019 are waived for the rest of 2020.

For businesses there is a new Covid Restrictions Support Scheme, where grants will be paid to those affected by restrictions imposed from Levels 3 – 5 of the Living with Covid strategy. We wait more details on this but would need to be either closed or severely affected by Covid19 restrictions.

• Employment Wage Subsidy Scheme (EWSS) expected to be extended past March 2021.

Business Taxation & Regulation
• Earned income tax credit increased by €150 to now equal the Employee Tax Credit of €1,650

Relevant Contracts Tax and Construction Industry
• No changes noted

Indirect Taxes
• Temporary reduction in VAT rate for Tourism and Hospitality items from 13.5% to 9% until December 2021

• Increase in farms flat rate addition from 5.4% to 5.6%

Stamp duty
• Consanguinity relief extended until December 2023

Carbon Tax
• Increase in rate by €7.50 to €33.50 per tonne. Household fuels will not be affected until next May. But cost of fuel from Midnight 13th October 2020 will be in effect 2.5 cent per litre on petrol and diesel from midnight tonight.

Capital Taxes
• No changes noted

(Local) Property Tax (LPT)
• No changes noted

Miscellaneous Provisions & Announcements
• 50c on pack of 20 cigarettes.

• Illness benefit will now be paid after 3 days instead of 6 days.

• Christmas bonus to be paid to those in receipt of Pandemic Unemployment Payment (PUP) for more than 4 months

• Self employed can earn up to €480 per month without losing their PUP payment.

• Illness benefit will now be available after three days out of work instead of the current six days.

• VRT to change based on emissions

• Motor Tax band from 1st January 2021 to change to a 3rd band to be inline with emissions testing. Also noted in the speech was the changes to the cars taxed under the CO2 emissions to create a level playing field.

Summary Statistics

		Budget 2021	Budget 2020
Capital Gains Tax Rate		33%	33%

Capital Acquisitions Tax Rate		33%	33%
Income Tax Rates
	Lower	20%	20%
	Higher	40%	40%
DIRT Tax
		39% (39% – where payments made less frequently than annually)	39% (39% – where payments made less frequently than annually)
Tax Credits
	Single Person	€1.650	€1,650
	Married Couple	€3,300	€3,300
	PAYE Credit	€1,650	€1,650
	Home Carer Credit	€1,600	€1,500
	Earned Income Tax Credit	€1,650	€1,500
Rate Bands
	Single/widowed	€35,300	€35,300
	Single/widowed with dependent children	€39,300	€39,300
	Married -one income earner	€44,300	€44,300
	Married – two income earners	€70,600	€70,600
PRSI
	Contribution Ceiling	No limit	No limit
Universal Social Charge
	< €13,000	Exempt	Exempt
	€ 0 – €12,012	0.5%	0.5%
	€12,013 – €19,874		2.0%
	€12,013 – €20,687	2.0%
	€19,874 – €70,044		4.50%
	€20,687 – €70,044	4.50%
	€70,044 – €100,000	8%	8%
	Self employed income > €100,000	11%	11%
	PAYE income in excess of €100,000	8%	8%
	Age >70/medical card holders with income < €60,000 – Max rate	2.0%	2.0%

Whilst every care has been taken in the production of this budget summary, neither Royal Canal Financial Control Services nor Ronan Duffy and Co. can be held responsible for any action taken or deferred, resulting from any errors contained therein. For a more comprehensive summary please refer to the government press release.