Dear Members and Colleagues,
An eventful week for SMEs nationwide with further COVID-19 restrictions introduced and the budget for 2021 announced. ISME broadly welcomed the budget in which there are a number of measures designed to keep businesses and their employees going. It is essential that these measures are introduced because of the scale of damage endured by thousands of businesses in Ireland. The two assumptions of no vaccine in the short term and a no-deal Brexit are the correct ones to build the budget around, with supports announced well into 2021. It was positive to see the significant spend on health, and hope that some of this can be invested urgently by the introduction of a fit for purpose testing regime, that will assist in keeping the virus at the lower Phase 1 and Phase 2 levels keeping business open and giving more businesses a chance at recovery.
The support measures introduced in the wider hospitality sector along with a reduction in VAT to 9% are to be broadly welcomed, although at this stage, they are small consolation for many in the sector. We believe the temporary reduction in the 23% vat rate should be made permanent. The increase in the earned income credit to €1,650 is a long-overdue but welcome adjustment, which brings the self-employed tax credit in line with the PAYE sector.
Information on key tax measures introduced can be found here. Further business supports announced in the budget are as follows.
- A modified Dividend Withholding Tax regime will be introduced from 1 January 2021
- A new COVID Restrictions Support Scheme (CRSS) has been set up, aimed at businesses impacted by Covid-19 restrictions. Qualifying businesses can apply to Revenue for a cash payment. The maximum weekly payment will be €5,000. The scheme is aimed at those in the accommodation, food and arts, recreation and entertainment sectors. If the Government decides to move to a higher level of restrictions then other sectors may qualify. The scheme will run from 13 October until 31 March 2021. More information on the scheme can be found here.
- There are some minor adjustments to the Capital Gains Tax regime. entrepreneurs should find it easier to qualify for the Entrepreneur Relief, which gives a reduced rate of CGT of 10% compared with a normal rate of 33% on gains from the disposal of business assets. Previously, you had to own at least 5 per cent of a company for a continuous period of 3 years, in the 5 years immediately prior to the disposal, in order to qualify for this relief. Now however, you must have just owned at least 5% for a “continuous period of any 3 years.
- Intangible assets acquired after 13 October 2020 will now be fully within the scope of balancing charge rules
- We also welcome the changes to the EWSS and that there is no longer a cliff edge at the end of March 2021 – instead it will continue onto the end of December 2021.
- There was a commitment made to increase capital expenditure to €10bn in
- Carbon Tax will increase by €7.50 per tonne every year to give €100 per tonne charge by 2030.
In non-budget news we are looking forward to hosting our Virtual Brexit Discussion sponsored by Skillnet Ireland next Tuesday the 20th. Hosting the event is Newstalk’s Vincent Wall and joining him is a panel of Brexit Experts. Further information about the panel can be read here. The event is now fully booked but you can register to join the waiting list by emailing firstname.lastname@example.org.
ISME Group Life Cover administered by Halligan Insurance is now open will remain open two more week. The plan provides peace of mind for your employees should the worst occur. Find out more about the scheme via the Members Area of the ISME website here.
Our Wellness partner, Laya healthcare will host a virtual conference on October 20th with a focus on mental health in the workplace. Now in its third year, this event is ideal for HR leaders and HR professionals concerned with culture, wellbeing, resilience and engagement within their teams. Find out more about the event here.
Those of you who have been in contact with the ISME Team will see we have added the following message to our signatures: WASH HANDS | MASK UP | MAINTAIN SOCIAL DISTANCE | FOLLOW THE FRAMEWORK. Its is more important than ever to keep COVID out of our communities so we can stay open and trading. Where possible encourage remote working, we have tips here and FAQs on the subject here.
Stay safe, and like always remember you are not alone,