The 2021 Budget delivered on Tuesday, October 13th by Ministers Pascal Donohue and Michael McGrath was the largest in the history of the state. It sees the establishment of the Covid Restrictions Support Scheme, a scheme that will make weekly payments to businesses impacted by Level 3 or higher restrictions.  It sees the introduction of funding for new construction projects, commercial rates waived for another quarter, an increase in the higher rates of employers’ PRSI payroll threshold, and a €3 – 5 billion fund to assist the economy face the headwinds of Brexit and Covid-19.

Contact us on 052 61 37775 or email us at [email protected] if you would like us to help you and your company.

Key Points in Budget 2021

The key points in Budget 2021, by sector, are:


· Changes to the second rate-band of USC which will increase from €20,484 to €20,687.
· No changes to income tax bands or tax rates
· The Earned Income Credit will increase from €1,500 to €1,650.
· The Dependent Relative Credit will increase from €70 to €245.

Corporation Tax

· The 12.5% rate remains unchanged.
· All Intangible assets acquired from 14th October 2020 will be within the scope of balancing charge rules.
· Exit Tax rules have been amended in the operation of interest on instalment payments.
· The KDB (Knowledge Development Box) relief extended until end of 2022.

Value Added Tax

· The 9% VAT rate for the hospitality and tourism sector will remain unchanged until December 31st, 2021.
· Farmers’ flat VAT rate increase from 5.4% to 5.6% from 1 January 2021.


· The weekly threshold for the higher rate of employers’ PRSI is to increase from €394 to €398

The Agriculture Sector

· The 1% Stamp Duty rate on farm consolidations is extended until end of 2022.
· Consanguinity relief of 1% Stamp Duty rate on the transfer of Agricultural Land between family members is extended until 31 December 2023.
· Farmers’ flat VAT rate increase from 5.4% to 5.6% from 1 January 2021.


· The Government has allocated an extra half a billion euro of capital expenditure for the building of 9,500 new social housing units in 2021.
· A fund of sixty five million euro will be made available for the deep retrofitting of social housing stock.

Climate Change Measures

· Carbon taxes of €7.50 per tonne will be applied to auto fuels from midnight tonight and all other fuels from 1st May 2021.
· VRT – the Minister spoke of the transition to new Worldwide Harmonised Light Vehicle Test Procedure (WLTP) emissions test system from 1st January 2021.
· Motor tax will remain unchanged for all cars in the engine size regime and all but the most pollutant cars in the post 2008 regime. Third table based on WLTP system from 1st January 2021.
· VRT Relief for Plug-in Hybrid Electric Vehicles and hybrids will expire.
· Accelerated Capital Allowances scheme for Energy Efficient Equipment extended for further 3 years. Categories of equipment to be updated.
· The Minister also announced an increase in VRT bands from 11 to 20 that will apply to all sales from January 2021. The new VRT table ranges from 7% to 37%, replacing the 14% to 36% range currently in place.

Capital Gains Tax and Capital Acquisitions Tax

· Capital Acquisitions Tax and Capital Gains Tax remain at 33%.
· No change in Capital Acquisitions Tax thresholds.
· CGT – Entrepreneur Relief ownership test has been amended.

COVID-19 Support Measures

· The CRSS (the Covid Restrictions Support Scheme) will provide support to businesses that have been forced to prohibit or restrict customer access due to Level 3 or higher restrictions.  The scheme will run until March 31st, 2021.  the first payments will be made to businesses by mid-November.  Payments will be calculated on the basis of 10% of the first one million euro in turnover and 5% thereafter, based on average VAT exclusive turnover for 2019.  The maximum payment available on a weekly basis will be five thousand euro. The CRSS scheme will run on a self-assessment basis.

· Self Employed can avail of Debt Warehousing provisions to defer payment of their 2019 Income Tax balance and preliminary tax for 2020.

· EWSS is expected to continue beyond March 2021 and possibly longer.
· Commercial rates have been waived for the final quarter of 2020 at a cost to the exchequer of three hundred million euro.

Contact Us

We can guide your company through the changes that are being introduced in Budget 2021.  Contact us on 052 61 37775 or you can email our managing Director, Aine Kiely O’Donnell at:  [email protected]