We told you briefly about the July Stimulus package, announced by the government, in our previous blog post. Today we will look at some more of the details of the package.
Income Tax Relief
We would particularly welcome the introduction of income tax relief for the self-employed in respect of 2020 losses. We would see this loss relief as a first step to ensuring the self-employed get the same recognition and supports as corporates. The value of this measure in assisting self-employed individuals to weather the economic downturn is clear and should be retained as part of the tax regime for self-employed individuals going forward.
Stay and Spend
With travel outside Ireland being very uncertain at the moment, the government have announced a Stay and Spend incentive. There will be €125 tax credit for those spending over €625 on accommodation, food and non-alcoholic drinks between October 2020 and April 2021.The €625 is per person so that will be doubled for married couples, meaning that you’ll be able to reclaim €125 or €250 at the end of the year.
A temporary reduction of the rate of VAT will come into effect from September, for 6 months. Although the lower VAT rate of 13.5% remains unchanged, the standard rate of 23% will be reduced to 21%.
Additional credit supports have been announced as part of the July Jobs Stimulus Plan. The accessibility to, and practical deployment of these funds over the coming months will help in supporting Irish businesses through this recovery.
Wage Subsidy Scheme
The Stimulus Plan also provides for a new Employment Wage Subsidy Scheme (EWSS) which will apply from July 31st until the end of March 2021. It will run concurrently with the Temporary Wage Subsidy Scheme (TWSS) until 31 August at which stage the TWSS will cease.
Under the EWSS, eligible employers will receive a per-head subsidy on a flat rate basis. It is expected that the employer will receive a maximum of €203 per week for employees earning over €203 per week and €150 per week for those earning below that level.
We will let you know any further developments as we hear of them.